CVS Health will split Aetna and Caremark from its 9,000 drugstores by 2028

CVS Health said on Wednesday that it plans to split into two public companies, separating its roughly 9,000 retail pharmacies from its Aetna health insurance business and its CVS Caremark pharmacy benefit manager (PBM). The company expects to finish the separation in the first half of 2028, according to the announcement¹ it filed with the Securities and Exchange Commission (SEC).

Caremark manages pharmacy benefits for about 87 million plan members, and the company's insurance products serve an estimated 37 million people, according to the announcement. Under one roof, Aetna could pay for a member's care, Caremark could decide which drugs the plan covers and what pharmacies are paid to fill them, and a CVS store could fill the prescription.

The announcement does not say how Caremark and the new pharmacy company will contract with each other after the split, or whether anything will change in what plans and members pay for drugs. It says patients and clients will keep receiving their medicines and benefits without interruption.

What goes where

The company keeping the CVS Health name for now will hold Aetna, Caremark, the CVS Specialty pharmacy, the Oak Street Health primary care clinics and the Signify Health in-home care business. A new company, CVS Pharmacy, will take the stores, the mail-order pharmacy, the MinuteClinic walk-in clinics and a technology business called Health100. David Joyner, CVS Health's chairman and chief executive, will lead the insurance and PBM company. Prem Shah, now group president, will run CVS Pharmacy.

The split still needs final approval from the board, an effective registration statement with the SEC and confirmation that it will be tax-free. CVS shareholders would own shares in both companies.

Joyner told The Wall Street Journal that regulation did not drive the decision, Reuters reported³. Reuters also noted that some states want to limit which businesses one health company can own, and that a Federal Trade Commission settlement this summer restricts how Caremark does business with other pharmacies.

The quarter behind it

CVS reported third-quarter results the same morning. Aetna spent 91.3% of its premiums on members' medical care, down from 92.8% a year earlier, and its adjusted operating income rose to $912 million from $314 million, according to the earnings release². The company credited better results in its government business. Aetna's commercial premium revenue fell 16.9% to $6.5 billion, partly because it left the individual exchange market in 2026, and its fully insured commercial membership fell to about 2.6 million from about 3.5 million a year earlier.

Revenue in the segment that includes Caremark rose 9.5% to $54.0 billion. The release credited the mix of drugs dispensed and price increases on brand-name drugs, partly offset by what it called "continued pharmacy client price improvements," meaning better terms for the employers and health plans that hire the PBM. Revenue at the pharmacies fell 2.0% to $35.5 billion, which the company tied to regulatory price cuts on certain drugs, new generic drugs and pressure on what pharmacies are paid. CVS raised its 2026 forecast for adjusted earnings to at least $8.20 a share, from $7.90 to $8.10.

How it got here

CVS completed its purchase of Aetna in November 2018, in a deal it valued at $78 billion including debt, and said at the time that the combined company would help people get healthier while lowering what they pay for care, according to its 2018 announcement⁴. Caremark became part of CVS nearly 20 years ago, Reuters noted.

What comes next

CVS still has to file the registration statement for the new company and name the rest of each company's leaders and board members. The terms the two companies set with each other, starting with what Caremark pays CVS Pharmacy to fill its members' prescriptions, will show whether the split changes anything for the employers, plans and patients on the other side of those prices.