CVS Health to split its pharmacy chain from its insurance business, with the break-up planned for early 2028
CVS Health, the largest healthcare conglomerate in the United States, valued at $117bn, has announced plans to split off its pharmacy chain from its health insurance and benefits businesses, ending an era in which healthcare companies grew into massive conglomerates.
Under the announcement made on Wednesday, the company's 9,000 pharmacies, in-store clinics and mail-order prescription business will be split off into a business named CVS Pharmacy.
A second company will keep the CVS Health name and house the major insurer Aetna and the pharmacy benefits manager Caremark, along with businesses that provide home visits and primary care to older people.
CVS Health, UnitedHealth Group and Cigna together control roughly 80 percent of that market, the report said, and CVS Health alone generated over $400bn in revenue last year.
The company has come under pressure from lawmakers and regulators over concerns that the healthcare giants have become too dominant, leading to higher medical costs, and the split was announced against that backdrop.
Arkansas and Tennessee have already passed laws aimed at preventing the companies from managing prescription benefits while also running retail and mail-order pharmacies, and other states have proposed similar restrictions.
Arkansas state representative Jeremiah Moore, a Republican who sponsored his state's bill, told Politico last week that the average American citizen is tired of being pushed around by the government or a monopolistic company, and he described the practice as crony capitalism.
At the federal level, a bill introduced by Missouri Republican senator Josh Hawley and Massachusetts senator Elizabeth Warren proposes an antitrust crackdown, which Hawley has described as a major step toward restoring transparency and making healthcare more affordable for every American.
David Joyner, CVS's chief executive and chair, will run the healthcare solutions business. In a statement he said the company's history is defined by proactively evolving, and that the aim now is delivering more affordability, greater access and a simpler experience.
CVS Health had earlier opposed legislative efforts to break up the company, with a spokesman saying a break-up would open the door to private equity stripping the entire US healthcare system for parts, so the announcement marks a stark turnaround.
The expansion began in 2018, when CVS and Aetna merged in a $70bn deal. Rivals UnitedHealth and Cigna also brought an insurer, pharmacy benefits and a mail-order business under one operation.
CVS Health did not, however, meet investors' expectations for growth. In late 2024 its share price fell to $44, though it has since rebounded. The break-up is planned for early 2028.
