CVS Health intends to split into two distinct companies, the healthcare giant confirmed in a Nov. 4 news release.
One company, which will be called CVS Health in the interim, will include health insurer Aetna, pharmacy benefit manager CVS Caremark, CVS Specialty, primary care centers Oak Street Health and health evaluations business Signify Health. The other company will focus on CVS’ 9,000 retail pharmacies, mail pharmacy, MinuteClinic and technology services business Health100. The latter company will go by CVS Pharmacy.
The companies will have more targeted strategic agendas, independent capital structures, greater agility and simplified structures, the release said.
The companies will be independent from one another and publicly traded. CVS expects the transition to be completed in the first half of 2028. The separation intends to be tax-free to CVS and its shareholders, who will own shares in both companies, for federal income tax purposes. Until the separation finalizes, CVS will still operate as it currently does and work toward financial targets.
“Now is the time because we are not doing anything out of a distressed decision,” CVS Health’s current CEO and chairman, David Joyner, said on a Nov. 4 earnings call.
Upon the separation, Mr. Joyner will become the healthcare solutions company’s chairman and CEO. Prem Shah, the current group president of CVS Health, will become CEO of CVS Pharmacy. Other leaders will be announced later, the release said.
“The market continues to evolve and change, and as a company, we need to continue to evolve with it,” Mr. Joyner said. Along with commercial agreements between the companies, Health100 will also serve as “connective tissue.”
The split unwinds some of the integrated model CVS built with its 2018 Aetna acquisition, along with earlier acquisitions.
“The breakup gives each company an opportunity to sharpen its value proposition,” Forrester’s principal analyst, Arielle Trzcinski, said in a statement shared with Becker’s. “However, if the split creates more handoffs, disconnected data or fragmented experiences, consumers will bear the cost of that complexity.”
The decision comes amid vertical integration challenges from lawmakers. Sens. Elizabeth Warren, D-Mass., and Josh Hawley, R-Mo., introduced the Break Up Big Medicine Act in February, since receiving support from Mark Cuban. The bill would block a health insurer or pharmacy benefit manager from also owning a medical provider or management services organization. CVS leaders have said the separation does not stem from regulatory issues, according to media reports.
CVS also reported third-quarter earnings Nov. 4, bringing in nearly $2.2 billion in net profit for the period, up from a $4 billion net loss in third-quarter 2025. Total revenue was $108.4 billion, a 5.4% year-over-year increase.
The company boosted its full-year guidance, with the GAAP diluted earnings per share guidance going to at least $6.98 from a range of $6.84 to $7.04, and adjusted earnings per share to at least $8.20 from a range of $7.90 to $8.10.
The recent results no longer include the $5.7 billion goodwill impairment charge CVS recorded in third-quarter 2025.
Aetna
Quarterly revenue grew 2.4% year over year to $36.9 billion. This was driven by government business, partly offset by the exit from individual exchange plans.
Adjusted operating income was up from $314 million to $912 million. The medical loss ratio in the health benefits business was 91.3% versus 92.8% during the same period in 2025.
Total medical membership stood at 26.1 million, including 18.4 million commercial, 4.2 million Medicare Advantage, 1.2 million Medicare supplement and 2.3 million Medicaid members. Total membership was down from 26.7 million in third-quarter 2025.
Health services
Revenue grew 9.5% year over year to $54 billion, with adjusted operating income increasing 2.7% from third-quarter 2025 to $2.1 billion. The business processed 481.7 million pharmacy claims on a 30-day equivalent basis during the third quarter.
Pharmacy and consumer wellness
Revenue was down to $35.5 billion, a 2% drop from the comparable quarter in 2025. The company attributed this to regulatory-related price reductions, generic introductions and reimbursement pressure. Adjusted operating income was up 10.6% at $1.6 billion.
CVS filled 470 million prescriptions on a 30-day equivalent basis during the third quarter.
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