11/3/2026
CVS Health to Break Up $117 Billion Healthcare Empire
Financial Times (11/03/26) Barnes, Oliver
CVS Health (NYSE: CVS) is plotting a break-up of its $117 billion healthcare empire, separating its retail pharmacy chain from its insurance business in what would be one of the largest corporate splits of all time. The move would unwind CVS's $78 billion acquisition of health insurance company Aetna in 2018, which created a vertically integrated healthcare conglomerate spanning an insurer, a pharmacy benefit manager and a retail pharmacy. Under plans being discussed, CVS would spin off its retail pharmacy division, whose 9,000 drugstores are projected to generate a third of the group's $417 billion in revenue this year, as a separate listed company, according to people familiar with the matter. The break-up would come as the industry faces intense political pressure challenging combined ownership of PBMs, which manage drug prescription benefits on behalf of insurers, employers and pharmacies. The company could announce the move as early as its third-quarter results this week, the people said. Insurer Aetna and Caremark, CVS's PBM, would remain together under one corporate entity as part of the plans under consideration, they added. The structure and timeline of the break-up were still in flux and could yet change, the people warned. CVS did not immediately respond to a request for comment. Shares in CVS have bounced back under the leadership of David Joyner, who started as chief executive in October 2024, driven by a turnaround at its Aetna insurance unit. Its stock sank to a 10-year low in December 2024. CVS's market value stood at $116.9 billion at Tuesday's close, more than double where it was trading at its nadir. CVS is fighting states' legislation to ban companies from owning PBMs and pharmacies. Lawmakers in Arkansas and Tennessee were the first two states to introduce such measures. Earlier this year, Tennessee's state legislature passed the Fair Rx Act banning ownership of pharmacies by companies which run both a PBM and insurer. CVS and its rival Cigna have sued to try to block the measure, which is set to take effect in 2028. In Arkansas, a judge blocked the law, introduced in April last year, pending further review. These changes have gained widescale support from both sides of the aisle in Washington. In the U.S. Senate, Democrat Elizabeth Warren and Republican Josh Hawley recently reintroduced bipartisan legislation to prohibit PBM and pharmacy co-ownership. CVS has led the charge as the wider health insurance industry emerges from a period of financial strain. Cost controls have boosted margins at the health insurance unit just as the U.S. government also increased payment rates for Medicare insurance plans. Even CVS's name-brand drugstores, a laggard of the wider business, benefited from a jump in profits and revenues in the first half of the year. In September 2024, CVS's struggles drew the attention of hedge fund Glenview Capital, which took a 1% stake in the business, prompting the removal of Karen Lynch as chief executive and the addition of four directors to the board. Glenview's founder Larry Robbins left CVS's board this August after the hedge fund began trimming its stake. Joyner praised Robbins' contribution to the company during a "period of transition for the business" upon his stepping down. Under Lynch, CVS went on acquisition spree, striking an $8 billion deal to buy care service provider Signify Health and a $10.6 billion takeover of primary care clinic Oak Street Health in 2023. These brands would be housed under the same corporate entity as Caremark and Aetna, the people added.
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