CVS Health will split off its pharmacy chain from its health insurance and benefits businesses, the company announced Wednesday, ending an era in which healthcare companies grew into vast conglomerates, the Guardian reported. The separation is planned for early 2028.
Under the plan, 9,000 pharmacies, in-store clinics and the company’s mail-order prescription business will be placed in a separate company called CVS Pharmacy. A second company will keep the CVS Health name and house the insurer Aetna, the pharmacy benefits manager Caremark, and businesses that provide home visits and primary care to older people.
The company has faced pressure from lawmakers and regulators who argue that large healthcare conglomerates, including CVS Health, UnitedHealth Group and Cigna, have become too dominant, leading to higher medical costs. The three companies control roughly 80 percent of the market, and CVS Health generated more than $400 billion in revenue last year. Arkansas and Tennessee have passed laws aimed at preventing such companies from managing prescription benefits while also running retail and mail-order pharmacies.
David Joyner, CVS’s chief executive and chair, will run the healthcare solutions business. “Our history is defined by proactively evolving to stay ahead of what’s next in healthcare, and in today’s environment, that means delivering more affordability, greater access and a simpler experience,” Joyner said in a statement. The announcement marks a turnaround from the company’s earlier opposition to breakup legislation, which a spokesman said would “open the door to private equity stripping the entire U.S. healthcare system for parts.”
