CVS Health Split: Company to Separate Pharmacy From Aetna by 2028

CVS Health said on Wednesday, 4 November, that it plans to split into two independent listed companies, separating its retail pharmacy chain from its Aetna insurance and Caremark businesses. The CVS Health split is expected to be completed in the first half of 2028.

The announcement came alongside third-quarter results that beat Wall Street estimates and a higher full-year outlook. Even so, the shares fell more than 12% on Wednesday, erasing nearly $15 billion in market value, Reuters reported.

How the CVS Health split will work

The board took the decision after a comprehensive strategic review, the company said in a statement. The separation is intended to be tax-free to CVS Health and its shareholders, who will own shares in both companies once it is complete.

The healthcare solutions company, which will be called CVS Health in the interim, will include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. David Joyner, currently Chairman and CEO of CVS Health, will lead it as Chairman and CEO.

The second company, CVS Pharmacy, will hold about 9,000 pharmacies, the mail pharmacy, MinuteClinic (including virtual care) and the Health100 technology services business. Prem Shah, currently Group President of CVS Health, will become its CEO. Other leadership roles and board members will be announced later.

Completion depends on final board approval, an effective Form 10 registration statement with the Securities and Exchange Commission (SEC), and confirmation of tax-free treatment. CVS said it expects both companies to carry a solid investment-grade rating and pay an attractive dividend.

“Our history is defined by proactively evolving to stay ahead of what’s next in healthcare,” Joyner said in the statement, adding that the plan creates two focused companies to improve consumer engagement, affordability and care coordination. Goldman Sachs is the lead financial and strategic adviser on the transaction, with Consello also advising and Wachtell, Lipton, Rosen & Katz acting as legal counsel.

CVS Q3 results beat estimates

Total revenue for the quarter ended 30 September rose 5.4% to $108.4 billion, according to the company’s earnings release filed with the SEC. Adjusted operating income climbed 21.2% to $4.19 billion, and operating income was $3.57 billion against an operating loss of $3.2 billion a year earlier.

Adjusted earnings per share came in at $2.09, up from $1.60 a year ago and well ahead of the LSEG consensus of $1.65, Reuters reported. GAAP diluted EPS was $1.68, compared with a loss of $3.13 per share in the third quarter of 2025.

The medical benefit ratio in the Health Care Benefits segment, which includes Aetna, improved to 91.3% from 92.8%. Health Services revenue rose 9.5% to $53.96 billion, while Health Care Benefits grew 2.4% to $36.86 billion. Pharmacy and Consumer Wellness revenue slipped 2% to $35.50 billion.

CVS raised its 2026 adjusted EPS guidance to at least $8.20 from a range of $7.90 to $8.10. It now expects cash flow from operations of at least $15.5 billion, up from at least $11.5 billion earlier, having already generated $15.3 billion in the first nine months.

Why investors sold the news

For 2027, CVS guided to adjusted EPS of at least $8.65, slightly above the analysts’ estimate of $8.53, according to Reuters. Chief Financial Officer Brian Newman flagged headwinds next year, including pressure on the pharmacy benefits business from a government drug-discount programme, a less robust selling season and lower health-plan membership.

UBS analyst Kevin Caliendo said the shares fell despite strong quarterly results because the split was “perceived as happening as a defensive move against regulation rather than an offensive move.”

The CVS Health split unwinds two decades of deal-making. CVS combined with Caremark in a deal announced in 2006 and bought Aetna in 2018, building a model that joined insurance, pharmacy benefits and retail pharmacy under one roof. Pharmacy benefit managers have since faced growing regulatory scrutiny in the US.

For business leaders, the move marks a significant reversal of vertical integration in US healthcare. It follows the restructuring of rival Walgreens, which sold Boots and was acquired by Sycamore Partners, Reuters noted.

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CVS said customers, patients and clients will continue to receive their medicines, care and benefits without interruption. The next milestones after the CVS Health split announcement are the Form 10 filing, further leadership appointments and final board approval. For more on large US companies, see our latest business news.