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CVS plans to spin off its pharmacy network by 2028

CVS Health plans to split into two publicly traded companies in the first half of 2028. About 9,000 pharmacies would form the core of CVS Pharmacy, while insurance and pharmacy benefit management would remain together. Existing shareholders would own both businesses, with completion dependent on board, securities and tax conditions.

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Overhead view of a retail pharmacy dispensing counter, where an anonymous pharmacist sorts medicine bottles beside pill counting trays.

A pharmacy company of its own

CVS Health plans to separate its pharmacy operations from its insurance and healthcare services businesses, creating two independently traded public companies.[1], [2]

The pharmacy company would be named CVS Pharmacy. It would include about 9,000 retail pharmacies, mail pharmacy, MinuteClinic and the Health100 technology services business. Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health would stay together in the healthcare solutions company, provisionally called CVS Health.[1]

Ownership and leadership

Existing shareholders are intended to own shares in both companies. David Joyner would remain chairman and chief executive of the healthcare solutions business, while group president Prem Shah would become CVS Pharmacy’s chief executive. Management wants the pharmacy business to pursue broader partnerships with insurers, pharmacy benefit managers and manufacturers.[1]

Completion remains conditional

CVS targets the first half of 2028 for completion. Final board approval, an effective securities registration and confirmation of the intended US federal tax treatment are required. The group will continue operating in its current form until then. Management expects investment grade credit ratings for both businesses, but has not yet disclosed their separate debt allocations or cash flow figures.[1]

For more information on this topic, you can read the related columns.

References

  1. News sourceCVS HealthCVS Health plans to separate its pharmacy business into a public company↩1↩2↩3↩4
  2. News sourceSTAT / Boston GlobeCVS Health plans to split its pharmacy network from its insurance and healthcare services operations.↩
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