CVS Health to split into insurer-PBM and pharmacy companies by first half of 2028

CVS Health said on 4 November 2026 that it plans to separate into two independent listed companies, splitting its insurance, benefits and care businesses from its retail pharmacy chain, with completion expected in the first half of 2028¹. The board took the decision after a strategic review, and the company published third-quarter results the same morning showing revenue of $108.4 billion, up 5.4%¹².

How the split is drawn

The healthcare solutions company will keep the CVS Health name for now and take Aetna, the CVS Caremark pharmacy benefit manager, CVS Specialty, Oak Street Health and Signify Health¹. David Joyner, chairman and chief executive of the group, will run it¹. The second company, CVS Pharmacy, will hold about 9,000 stores, mail pharmacy, MinuteClinic including virtual care, and the Health100 technology services business, under Prem Shah, now group president¹.

Shareholders will own shares in both companies, and CVS Health intends the separation to be tax-free for US federal income tax purposes¹. The company expects each business to carry a solid investment grade rating and to pay a dividend¹. Goldman Sachs is lead financial and strategic adviser, with Consello also advising and Wachtell, Lipton, Rosen & Katz as legal counsel¹.

The quarter behind the announcement was stronger than a year ago. Adjusted EPS rose to $2.09 from $1.60, and the company lifted full-year adjusted EPS guidance to at least $8.20 and operating cash flow guidance to at least $15.5 billion, from at least $11.5 billion². The gains came mainly from Health Care Benefits, where the medical benefit ratio fell to 91.3% from 92.8%². Health Services revenue grew 9.5%, while Pharmacy & Consumer Wellness revenue slipped to $35,498 million from $36,214 million².

What it means for the market

The split unwinds the vertically integrated model of insurer, benefit manager and pharmacy under one roof. The benefits company keeps the PBM and specialty pharmacy alongside Aetna, so the payer and PBM link stays intact¹. CVS Pharmacy, as a standalone chain, says it will seek a wider set of partnerships with payers, pharmacy benefit managers and manufacturers¹. For rival PBMs, insurers and drugmakers, that opens a large dispensing network that has until now sat inside a competitor.

For health-tech vendors and investors, the most relevant asset is Health100. CVS Health says the business will deliver "AI-native products and services" aimed at affordability, access and experience, and that both companies remain committed to it¹. Health100 will sit with the pharmacy company, not with the payer and PBM business, and its mobile app earned CARIN Code of Conduct accreditation from DirectTrust in the quarter¹². The releases do not say how the two companies will share Health100's products after the split or whether Aetna will remain a customer, so the commercial terms between the two are still unknown¹.

The scale is large on both sides. As of 30 September 2026 the group had a PBM with about 87 million plan members and served an estimated 37 million people through health insurance products¹. Health Care Benefits medical membership stood at 26.1 million².

Caveats

The separation depends on final board approval, an effective Form 10 registration with the US Securities and Exchange Commission and confirmation of the tax-free treatment¹. CVS Health will run as one company until then and has not yet named the remaining leaders or board members of either business¹. On the trading outlook, the company kept a cautious view for the rest of 2026, citing elevated cost trends and possible macro headwinds². Completion is targeted for the first half of 2028¹.