WOONSOCKET, R.I. — CVS Health plans to separate into two independent publicly traded companies, a move the healthcare giant says will sharpen strategic focus and create greater value for patients, customers and shareholders.
The company announced Wednesday that following a strategic review by its board of directors, it intends to divide its operations into two businesses: a healthcare solutions company centered on insurance, pharmacy benefits and care delivery, and a retail pharmacy company built around its nationwide store network and community healthcare services.
Geoff Walden
The healthcare solutions company will include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. CVS Health Chairman and CEO David Joyner will lead the business following the separation.
The second company, which will operate as CVS Pharmacy, will consist of approximately 9,000 retail pharmacy locations, mail pharmacy operations, MinuteClinic services, including virtual care, and the company's Health100 technology services business. Current CVS Health Group President Prem Shah is expected to serve as CEO of CVS Pharmacy.
The transaction is expected to be completed during the first half of 2028 and is intended to be tax-free to CVS Health and its shareholders.
"Our history is defined by proactively evolving to stay ahead of what's next in healthcare," Joyner said in a statement. "From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability and care coordination."
According to CVS Health, the separation will allow each company to operate with its own strategic priorities, capital allocation plans and leadership teams while maintaining a commitment to improving healthcare affordability, access and simplicity.
The healthcare solutions company will continue combining health insurance, pharmacy benefit management, specialty pharmacy and value-based care assets to lower costs and improve outcomes for members and patients. Meanwhile, CVS Pharmacy will focus on expanding community healthcare services and leveraging its position as one of the country's most frequently accessed healthcare touchpoints.
Company leaders emphasized that technology and artificial intelligence will remain central to both organizations' growth strategies. Health100, CVS Health's recently launched technology platform, is expected to play a significant role in developing AI-native solutions aimed at addressing healthcare affordability, access and patient experience challenges.
CVS Health said the separation will not affect service for customers, patients, clients or members, who will continue receiving healthcare, pharmacy and insurance services without interruption throughout the transition.
Upon completion of the transaction, existing CVS Health shareholders will own stock in both companies. The company expects each business to maintain an investment-grade credit profile, generate strong free cash flow and support dividend programs.
The separation remains subject to approval by CVS Health's board, regulatory filings and other customary conditions. Until the transaction closes, CVS Health will continue operating as a single organization and pursue its existing financial and strategic objectives.
