One company will house Aetna and Caremark and the other CVS’ 9,000 retail pharmacies. CVS is “effectively acknowledging that bigger isn’t always better,” one analyst said.
CVS Health plans to split into two companies — one housing its insurance arm Aetna and pharmacy benefit manager Caremark, and one with its 9,000 retail pharmacies — in one of the largest corporate breakups in history.
The split, rumored in media reports Tuesday and confirmed by executives Wednesday, comes a decade after the $78 billion merger that combined CVS with Aetna and is an indictment of the vertical integration strategy that’s defined the healthcare industry for years.
Separating the businesses will make the respective teams more agile and competitive, CVS CEO David Joyner said on a call with investors Wednesday morning. CVS expects the split to be completed in the first half of 2028.
It’s a stunning reversal of strategy for CVS, which has spent the last two decades integrating — acquiring Caremark in 2007, Aetna in 2018 and a handful of medical groups, including Oak Street Health and Signify Health, since.
The split “unwinds a central piece of the premise” behind CVS’ acquisitions: “that a pharmacy, PBM, insurer, and care-delivery organization could coordinate more of the healthcare journey and create economies of scale,” Arielle Trzcinski, principal analyst at Forrester, said in an email. “Now, CVS Health is effectively acknowledging that bigger isn’t always better.”
America is souring on the behemoth conglomerates that control how they access healthcare and how much they pay.
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