CVS Health Announces Major Plan to Split Its Business

CVS Health, one of the largest healthcare companies in the United States, has announced a major change to its business structure. The company, which is worth $117 billion, plans to split its operations into two separate businesses. This decision marks the end of a period where healthcare companies grew into massive conglomerates—large groups of companies that own many different types of businesses. According to The Guardian Business, this change is expected to be completed by early 2028.

Under the new plan, the first company will be called CVS Pharmacy. It will include the company’s 9,000 retail stores, in-store clinics, and mail-order prescription services. The second company will keep the name CVS Health. This part of the business will manage the insurance provider Aetna and a large pharmacy benefits manager called Caremark. It will also include services that provide home visits and primary care for older people. David Joyner, the current chief executive and chair of CVS, will lead this healthcare solutions business.

This announcement follows years of rapid growth for CVS Health. The company began expanding into almost every part of the healthcare system in 2018, when it completed a $70 billion deal to buy Aetna. Other large healthcare rivals, such as UnitedHealth Group and Cigna, followed similar strategies. By bringing insurance, pharmacy benefits, and retail services under one roof, these companies hoped to control more of the market. However, The Guardian Business reports that these three companies now control about 80% of the market, which has led to significant concern among government officials.

Lawmakers and regulators have put increasing pressure on these healthcare giants. Many argue that these companies have become too dominant, which has led to higher medical costs for patients. In response, some states have already taken action. For example, Arkansas and Tennessee have passed laws to prevent companies from managing prescription benefits while also running retail and mail-order pharmacies. Other states are currently considering similar rules to limit the power of these large corporations.

At the federal level, there is also a push for change. Senators Josh Hawley and Elizabeth Warren have introduced a bill that proposes an antitrust crackdown—a set of government actions designed to stop companies from becoming monopolies that control too much of an industry. Senator Hawley stated that this legislation is a major step toward making healthcare more transparent and affordable for every American. The Guardian Business noted that this political pushback against healthcare giants has been a significant factor in the company's decision.

This move represents a major change in strategy for CVS Health. Previously, the company strongly opposed legislative efforts to break up its business. A company spokesman had even warned that such a breakup could allow private equity firms to strip the healthcare system for parts. However, the company has faced challenges in meeting the growth expectations of its investors. In late 2024, the company's share price fell to $44, although it has since recovered.

In a statement regarding the split, David Joyner explained that the company’s history is defined by changing to stay ahead of the future. He noted that in today’s environment, the company needs to deliver more affordability, better access, and a simpler experience for patients. By separating the pharmacy chain from the insurance and benefits business, CVS Health hopes to address these needs more effectively.

As the company prepares for this transition, the healthcare industry is watching closely. The move reflects a broader national debate about the size and influence of large healthcare corporations. Whether this split will lead to lower prices and better service for the public remains to be seen, but it is clear that the era of the massive healthcare conglomerate is facing new challenges. For now, CVS Health is moving forward with its plan to reshape its future in the American healthcare system.