CVS will split into two companies, undoing its Aetna merger; shares fall more than 12%
CNBC's report explains the breakup, who runs each half, and why pharmacy benefit managers are under pressure in Washington and the states.
CVS Health said on Wednesday, November 4, that it plans to split into two publicly traded companies by the first half of 2028, separating its roughly 9,000 retail pharmacies from its Aetna insurance business and its Caremark pharmacy benefit manager. It reverses the $78 billion Aetna deal of 2018 and, CNBC notes, would be one of the largest corporate breakups on record.
The insurer and PBM company would keep the CVS Health name under CEO David Joyner, who told CNBC the move comes 'out of a position of strength.' The drugstore company would be called CVS Pharmacy, led by Prem Shah. Shareholders would own stock in both. CVS also beat third-quarter estimates, with sales of $108.40 billion.
Shares closed more than 12% lower. CNBC reports that PBMs face bipartisan scrutiny, and that Tennessee and Arkansas have passed laws banning co-ownership of PBMs and pharmacies, which CVS and others are challenging in court.
-
Pharmacy benefit management
After exploring CVS to split off drugstore business, to understand the middlemen at the center of this split, read Pharmacy benefit management.
Wikipedia explains pharmacy benefit managers as third-party administrators of prescription drug programs for health plans, employers, Medicare Part D and government employee plans.
Wikipedia · Swim · 30 min
0