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CVS plans to separate pharmacy business from insurance operations
CVS Health plans to separate its retail pharmacy and prescription businesses from its health insurance and benefits operations, dividing one of America’s largest healthcare companies into two. The move comes amid growing scrutiny of large healthcare conglomerates, which critics say have too much market power and contribute to higher medical costs.
The new CVS Pharmacy will include about 9,000 pharmacies, in-store clinics and mail-order prescriptions. CVS Health will retain insurer Aetna, pharmacy benefits manager Caremark and other care businesses; the split is planned for early 2028. The company, valued at $117bn, reported more than $400bn in revenue last year, while CVS, UnitedHealth Group and Cigna together control roughly 80% of the market.
In short
- CVS plans to split its pharmacy and insurance businesses.
- The separation is expected in early 2028.
- Regulators and lawmakers are scrutinising healthcare conglomerates.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Separating the businesses could make each operation more focused and easier for investors, regulators and customers to assess. It may also reduce concerns that a company owning an insurer, pharmacy benefits manager and pharmacy chain can favour its own services, while allowing the retail pharmacy business to respond more directly to local needs.
The case against
The businesses may be more effective together: combining pharmacies, clinics, prescription services and insurance can help coordinate care and manage costs. A split could disrupt those links, add administrative expense and leave each company with less scale to negotiate prices or invest, without necessarily changing the wider concentration of the healthcare market.
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Originally published by The Guardian as “CVS Health to split pharmacy chain from health insurance”.