CVS Health is preparing to split into two separate companies by spinning off its retail pharmacy network of 9,000 drugstores. The move partially unwinds CVS's $78 billion acquisition of health insurer Aetna in 2018. Under the proposed plan, Aetna and pharmacy benefit manager Caremark would remain combined. The corporate restructuring comes amid intense political pressure and legislative bans against co-owning PBMs and retail drugstores, alongside shifting financial dynamics under Chief Executive Officer David Joyner.
Proposed CVS breakup structure
- ▪CVS Health's planned retail pharmacy spin-off would unwind CVS Health's $78 billion acquisition of health insurer Aetna completed in 2018
- ▪CVS Health is planning to split into two separate companies by spinning off its retail pharmacy chain of about 9,000 drugstores into a separate publicly listed company
- ▪Under CVS Health's proposed breakup plans, health insurer Aetna and pharmacy benefit manager Caremark would remain combined under one corporate entity
Legal efforts to restrict PBM co-ownership
- ▪Tennessee passed the Fair Rx Act to ban companies from co-owning pharmacy benefit managers and retail pharmacies starting in 2028, leading CVS Health and Cigna to file a lawsuit against the Fair Rx Act
- ▪U.S. Senators Elizabeth Warren and Josh Hawley reintroduced bipartisan federal legislation to prohibit co-ownership of pharmacy benefit managers and retail pharmacies
- ▪An Arkansas judge temporarily blocked a state law introduced in April 2025, pending further legal review
Leadership changes and financial performance
- ▪Activist hedge fund Glenview Capital acquired a 1 percent stake in CVS Health in September 2024, leading to the departure of former CEO Karen Lynch and the addition of four board members
- ▪CVS Health's market capitalization reached approximately $117 billion by November 3, 2026, recovering from a 10-year low in December 2024 under Chief Executive Officer David Joyner
Morningstar analysis of CVS structure
- ▪Morningstar analyst Julie Utterback stated that spinning off CVS Health's retail business carries financial risks including lost corporate synergies and new standup costs
- ▪Morningstar analyst Julie Utterback stated that CVS Health faces greater vertical integration exposure than industry peers because it co-owns pharmacy benefit manager Caremark and a retail pharmacy chain
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