CVS To Split Up Pharmacy and Health Benefits Businesses

CVS Health has announced plans to split off its drugstores into a separate, standalone company.

According to a November 4 release, CVS will create two businesses with the split: One for its healthcare operations — which will include Aetna, CVS Caremark, Oak Street Health and Signify Health — and another that will be made of its 9,000 pharmacies, as well as its mail pharmacy, virtual care clinic, and Health100 technology services business.

This comes as CVS has faced pressure from states over concerns that its status as both a manager of pharmacy benefits and an operator of retail pharmacies creates a conflict of interest, allowing it to steer patients toward its own drugstores, and pay competing pharmacies less for filling the same prescriptions. In just the last two years, both Arkansas and Tennessee have passed laws aimed at preventing pharmacy benefit managers from also owning or operating pharmacies in their states. CVS has long claimed that splitting off its pharmacies would force it to close drugstores, and raise costs for consumers.

Speaking to CNBC on November 4, CVS Health CEO David Joyner acknowledged that political and regulatory pressure factored into the decision to separate the company’s healthcare and pharmacy businesses. Joyner went on to assert that the move will allow CVS to “innovate and move faster.”

The split is expected to take effect in the first half of 2028. Joyner will remain chairman and CEO of the healthcare business, while CVS Health group president Prem Shah will lead the new pharmacy company, which will be named CVS Pharmacy.