CVS Health plans to spin off its 9,000-store pharmacy chain, unwinding its 2018 Aetna mega-deal

CVS Health is planning to break itself apart — spinning off its chain of roughly 9,000 retail pharmacies into a separate publicly traded company and keeping its Aetna insurance unit and Caremark pharmacy benefit manager together, according to people familiar with the matter. An announcement could come as early as this week, when the company reports third-quarter earnings.

The move would effectively unwind CVS's landmark $78 billion acquisition of health insurer Aetna in 2018, which created a vertically integrated conglomerate spanning insurance, drug-benefits management, and retail pharmacy. The combined company's market value stood at $116.9 billion at Tuesday's close.

Under the structure being discussed, the retail pharmacy division — projected to generate roughly a third of CVS's $417 billion in revenue this year — would be spun off as a standalone listed company. Aetna, Caremark, and related healthcare businesses including Oak Street Health and Signify Health would remain under one entity, according to reports citing people familiar with the matter.

The split is being shaped in large part by a mounting political and legal campaign against companies that simultaneously own an insurer, a pharmacy benefit manager, and a retail pharmacy. PBMs — which manage prescription drug benefits on behalf of insurers, employers, and pharmacies — have drawn bipartisan fire in Washington and in state capitals.

Tennessee's legislature passed the Fair Rx Act, banning such combined ownership, with the law set to take effect in 2028. CVS and rival Cigna have sued to block it. In Arkansas, a judge blocked a similar law pending further review. At the federal level, Democratic Senator Elizabeth Warren and Republican Senator Josh Hawley recently reintroduced bipartisan legislation to prohibit PBM and pharmacy co-ownership.

CVS's stock had fallen to a ten-year low in December 2024, drawing in activist hedge fund Glenview Capital, which took a roughly 1 percent stake and prompted the removal of then-CEO Karen Lynch and the addition of four new board directors. David Joyner took over as chief executive in October 2024. Since then, cost controls have improved margins at Aetna, and the US government raised payment rates for Medicare insurance plans. CVS's market value has more than doubled from its low point.

Glenview founder Larry Robbins left CVS's board in August after the hedge fund began trimming its stake. Joyner credited Robbins with contributing during a period of transition for the business.

The acquisitions that built CVS into its current form came in rapid succession: the $78 billion Aetna deal closed in 2018, followed under former CEO Karen Lynch by an $8 billion purchase of care-services provider Signify Health and a $10.6 billion takeover of primary care clinic chain Oak Street Health, both in 2023. Those brands would stay with the insurance and PBM side of the business under the break-up plans being considered.

People familiar with the matter cautioned that the structure and timeline of the break-up remain in flux and could still change. CVS did not immediately respond to requests for comment.

Why it matters — A break-up of CVS would be one of the largest corporate splits in US history and would reshape how tens of millions of Americans access prescriptions, insurance, and primary care — while signalling that the vertically integrated healthcare model built over the past decade may be unravelling under political and financial pressure.

Reported by yahoo.com, finance.yahoo.com, rmb.reuters.com, bloomberg.com