CVS Health announced plans to split into two publicly traded companies by the first half of 2028, marking a significant shift in its corporate strategy. The move will separate the company’s retail pharmacy business—including roughly 9,000 locations—from its insurance, pharmacy benefit management (PBM), and healthcare services operations.
The newly formed entities will operate under distinct names: CVS Health will retain the insurance, PBM, and healthcare services divisions, including Aetna, CVS Caremark, and Signify Health. The second company, CVS Pharmacy, will oversee the retail pharmacy and MinuteClinic locations. Existing shareholders will hold shares in both entities after the split.
The decision follows a comprehensive strategic review by CVS’s board of directors and reflects the company’s improved financial performance. CVS reported third-quarter revenue of $108.4 billion, a 5.4% increase year over year, and raised its full-year 2026 adjusted earnings per share guidance to at least $8.20. Shares of CVS dropped more than 10% following the announcement, despite the company’s recent stock gains under CEO David Joyner, who took the helm in October 2024.
Rationale for the Split
CVS cited the stability and profitability of its retail pharmacy business as a key factor in the decision. The company noted that its pharmacy operations have become more consistently profitable compared to previous years, while its insurance unit, Aetna, has improved performance despite challenges in Medicare Advantage plans. Analysts have suggested that separating the businesses could allow investors to better recognize the value of each unit independently.
Leadership and Timeline
The insurance and PBM company will be led by CEO David Joyner, while CVS Pharmacy will be helmed by Prem Shah, currently group president of CVS Health. Additional leadership appointments and board members will be announced later. The separation is expected to be completed by the first half of 2028, reversing the company’s 2018 acquisition of Aetna, which created a vertically integrated healthcare conglomerate.
Financial and Operational Impact
The retail pharmacy business generated $37.66 billion in sales in 2025, while the insurance unit reported $36.29 billion in revenue. The split aims to improve consumer engagement, affordability, and care coordination, according to Joyner. The company has pursued cost cuts, store closures, and leadership changes as part of its turnaround strategy, which has contributed to its recent financial performance improvements.