CVS Health is dismantling the vertically integrated healthcare empire it spent years building, betting that two focused companies will perform better than one sprawling conglomerate. The reversal comes as the company faces investor skepticism, weak pharmacy economics and growing scrutiny of pharmacy-benefit managers.

Under the plan, CVS will separate roughly 9,000 retail pharmacies, MinuteClinics and mail-order operations into CVS Pharmacy. A second publicly traded company will retain Aetna, Caremark, specialty pharmacy and healthcare businesses including Oak Street Health and Signify Health. The split is expected by the first half of 2028, with existing shareholders receiving stakes in both companies.¹

CVS and its supporters frame the move as a sign of renewed strength rather than distress. The retail pharmacy business has become more stable after competitors including Walgreens and Rite Aid closed stores, while CVS’s CostVantage reimbursement model has helped steady margins. The company also cites eight straight quarters of earnings beats, cost reductions and an improved outlook under CEO David Joyner. “From a position of strength,” Joyner said, CVS intends to create companies with a “focused strategic agenda.”²

Analysts, however, see a more complicated calculation. Retail pharmacy remains a low-margin, slow-growth business, while Caremark and Aetna may be worth more if investors can assess them separately. Shares fell roughly 10% to 12% after the announcement, suggesting that markets remain unconvinced the breakup alone will solve CVS’s operating problems.¹

The split also coincides with bipartisan criticism of PBMs, whose pricing practices and ownership of pharmacies have drawn legal and legislative challenges. Arkansas and Tennessee have moved to restrict such combinations, while federal lawmakers including Elizabeth Warren and Josh Hawley have proposed broader antitrust action. Critics argue healthcare giants have become too dominant; Arkansas legislator Jeremiah Moore called the system “crony capitalism.”³

CVS insists regulation did not drive the decision and says commercial agreements can preserve cooperation between the two companies. The central test, therefore, is whether those synergies survive without common ownership—or whether the breakup merely exposes the costs of integration that CVS once marketed as its greatest advantage.