CVS Health to split into two separate publicly traded companies

The new corporate structure

CVS Health will split into two separate publicly traded companies, reversing decades of deal-making that turned the organization into one of the largest healthcare conglomerates in the country. One entity will retain the name CVS Health, while the other entity will operate as CVS Pharmacy. Both of these new publicly traded companies will still have CVS in their names. The CVS Health business will include the Caremark pharmacy benefit manager, the Aetna health insurer, the specialty pharmacy, and the various companies that provide primary care and home visits to older adults. This reorganization unravels the decades of deals that turned CVS into a massive healthcare conglomerate. The split separates the retail pharmacy business from the insurance and management arms, creating two distinct entities with different business models.

Profit concerns regarding medication dispensing

The split does not resolve criticisms regarding how the company manages medication costs and pharmacy benefits. Because high-cost drugs from the specialty pharmacy will remain intertwined with the Caremark pharmacy benefit manager and Aetna, critics believe companies like CVS profit excessively from prescription drug dispensing. The CVS Health division will keep the specialty pharmacy alongside the Caremark pharmacy benefit manager and Aetna, which means high-cost drugs from the specialty pharmacy remain tied to one of the country’s largest PBMs and insurers. This arrangement maintains the close relationship between drug dispensing and insurance coverage that has drawn scrutiny. The reorganization separates the retail storefronts from the insurance side, yet the CVS Health segment preserves the connection between drug management and the sale of high-priced medications. The decision to keep the specialty pharmacy in the same company as the pharmacy benefit manager and the insurer ensures that the high-cost drug business remains combined with the insurance and management divisions. The specialty pharmacy, the Caremark pharmacy benefit manager, and Aetna will all remain under the single CVS Health corporate umbrella.