From CNBC · Annika Kim Constantino · · 1m 50s
CVS to split into two companies by 2028
CVS Health plans to reverse its $78 billion Aetna acquisition by splitting into separate pharmacy and insurance companies, undoing a decade-old strategy.
In brief
CVS Health plans to reverse its $78 billion Aetna acquisition by splitting into separate pharmacy and insurance companies, undoing a decade-old strategy. CVS Health will split into two public companies by the first half of twenty twenty-eight, separating its roughly nine thousand retail pharmacies from its insurance…
CVS announces historic breakup
CVS Health plans to split into two separate public companies by the first half of twenty twenty-eight in what would be one of the largest corporate splits in history.
Reversing the Aetna deal
The split would reverse CVS's massive seventy-eight billion dollar acquisition of insurer Aetna and dismantle the vertically integrated healthcare conglomerate it created in twenty eighteen.
What gets separated
CVS will separate its roughly nine thousand retail pharmacies from its insurance business and pharmacy benefit manager Caremark, one of the nation's three largest PBMs.
Two companies, two leaders
The insurance and PBM company will retain the CVS Health name and be run by CEO David Joyner. The pharmacy company will be called CVS Pharmacy and led by Prem Shah, currently group president.
Strong performance before split
CVS shares have jumped roughly seventy percent since Joyner took the helm in October twenty twenty-four, bringing the company's market value to one hundred seventeen billion dollars.
What each company will contain
The insurance and PBM company will include primary care business Oak Street Health, home-visit provider Signify Health and the specialty drug business alongside Caremark.
Regulatory pressure mounts
Pharmacy benefit managers face mounting bipartisan scrutiny over opaque pricing, growing market power and conflicts of interest. Congress enacted PBM reforms in February and states restrict PBM pharmacy ownership.
CEO's vision for the split
From a position of strength, CVS aims to create two focused companies to improve consumer engagement, affordability and care coordination, Joyner said in the announcement.
“From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination.”
The headline
CVS Health will split into two public companies by the first half of twenty twenty-eight, separating its roughly nine thousand retail pharmacies from its insurance and pharmacy benefit manager business.
