CVS Health to Split Pharmacy Chain From Insurance Arm by Early 2028

CVS Health, valued at $117 billion, will split its 9,000-store pharmacy chain from its health insurance and benefits businesses, ending the era of US healthcare conglomerates that assembled insurers, pharmacies and drug middlemen under one roof.

The company announced the breakup on Wednesday. One business, named CVS Pharmacy, will take the retail pharmacies, in-store clinics and the mail-order prescription operation. A second company keeps the CVS Health name and houses Aetna, the major insurer, alongside Caremark, the pharmacy benefits manager, plus businesses providing home visits and primary care to older people.

David Joyner, CVS's chief executive and chair, will run the healthcare solutions business. In a statement, Joyner framed the move as continuity rather than retreat: "Our history is defined by proactively evolving to stay ahead of what's next in healthcare, and in today's environment, that means delivering more affordability, greater access and a simpler experience."

That is a promise, not yet a result — and the split is not scheduled to complete until early 2028, leaving roughly three years for regulators, legislators and investors to test it.

Why is CVS breaking up now?

The decision follows sustained pressure from lawmakers and regulators concerned that healthcare giants — CVS Health, UnitedHealth Group and Cigna — have grown too dominant and driven medical costs higher. Together, the three companies control roughly 80% of the market. CVS alone generated more than $400 billion in revenue last year.

Several states have already moved from rhetoric to legislation. Arkansas and Tennessee have passed laws aimed at stopping these companies from both managing prescription benefits and running retail and mail-order pharmacies. Other states have proposed similar restrictions.

Arkansas state representative Jeremiah Moore, a Republican who sponsored his state's bill, told Politico last week: "The average American citizen is really tired of being pushed around and bullied, whether it be from the government or a monopolistic company."

Moore went further: "For far too long, they've taken advantage of these sick people, and it's what I consider to be crony capitalism. They're bending the rules to benefit their own bottom line."

At the federal level, Missouri Republican senator Josh Hawley and Massachusetts senator Elizabeth Warren have introduced a bill proposing an antitrust crackdown. Hawley has described the legislation as "a major step toward restoring transparency and making health care more affordable for every American."

What changed at CVS?

The breakup marks a stark reversal. CVS Health previously opposed legislative efforts to break up the healthcare giant, with a company spokesman warning such moves would "open the door to private equity stripping the entire U.S. healthcare system for parts."

That argument has now been set aside by the same company's leadership, which says the split will deliver affordability and access. The spokesman's warning about private equity, notably, does not appear in the breakup announcement.

The conglomerate structure was built through acquisitions that pushed CVS into nearly every corner of the healthcare system. The pivotal move came in 2018, when CVS and Aetna merged in a $70 billion deal. Rivals UnitedHealth and Cigna followed the same template, harnessing an insurer, pharmacy benefits and a mail-order business within a single operation.

Did the conglomerate model deliver?

By the market's verdict, no. CVS Health failed to meet investors' expectations for growth. In late 2024, its share price fell to $44, though it has since rebounded.

The conglomerate logic promised cost synergies and integrated care. Instead, CVS absorbed political scrutiny, legislative attacks in state capitols, a federal antitrust bill with bipartisan sponsors, and a share price that at one point lost more than half its value from the peak conglomerate-era valuation. A $400 billion revenue machine, it turned out, was easier to build than to grow.

The company has not detailed the financial structure of the split, the leadership of the standalone pharmacy business, or how Caremark's contracts with the retail arm will be untangled. Those omissions will dominate the next three years.

What happens next?

The breakup is planned for early 2028. Between now and then, CVS must answer the questions it has so far left unaddressed: who runs CVS Pharmacy, how the two companies will trade with each other, and whether state laws forcing vertical separation will spread beyond Arkansas and Tennessee.

For UnitedHealth and Cigna, the move sets a precedent. If CVS can argue that separation delivers what Joyner calls "a simpler experience," lawmakers will ask why the other two giants controlling most of the remaining market cannot do the same.