CVS to Split Off Drugstore Business, Ending Its Bigger-Is-Better Era

CVS Health plans to divide itself into two companies in the first half of 2028, reversing years of expansion into a broad health care conglomerate. The new CVS Pharmacy will include about 9,000 retail drugstores, in-store clinics and a mail-order prescription operation. The remaining CVS Health will keep Aetna, the insurer, and Caremark, the pharmacy benefit manager, as well as businesses offering home visits and primary care for older adults. With more than $400 billion in revenue last year, CVS ranked among the largest public companies in the United States.

The breakup comes amid growing political and regulatory criticism of companies that combine insurance, pharmacy-benefit management and pharmacy operations. Critics argue that these overlapping businesses create conflicts of interest, let companies steer patients to their own services, weaken competition and raise costs. Several states have passed or proposed laws restricting such combinations. CVS’s move also reflects the limits of its growth strategy: its 2018 merger with Aetna helped create a company spanning much of the health care system, but the expansion did not satisfy investors’ expectations, and its market value sank to a decade low in 2024 before recovering. Meanwhile, the retail pharmacy business faces shifting consumer habits and industry strain, while investors have regarded Caremark as a more valuable part of the portfolio.