By Chris Isidore, CNN
(CNN) — CVS Health said Wednesday it is splitting into two companies, marking one of the largest shakeups in the healthcare industry. It’s a major reversal of the mergers that brought together the nation’s largest drugstore retailer along with health insurance giant Aetna and pharmacy benefit manager Caremark.
The breakup unwinds a strategy that began in 2007, when CVS merged with Caremark, which handles prescription benefits available to people with health insurance. In 2018, CVS acquired Aetna for $69 billion.
“We’re basically taking what I believe is one great company and making it two,” said CVS CEO David Joyner in a statement Wednesday.
The company split will have little impact on the way people shop at CVS – the company didn’t announce any closures as part of the news.
And it won’t affect what you pay for prescriptions. Pharmacy benefit management businesses work on the backend, negotiating directly with drugmakers on the cost of prescription drugs and thus what customers pay. But CVS’s drugstores and Caremark insurance operate separately. Splitting into two companies won’t change how they function.
Shares of CVS Health, which had been up about 15% so far this year, fell 10% in early trading after initially ticking up in premarket trading. Shareholders will get shares of both companies in a tax-free transaction expected to close in early 2028, according to the company.
CVS also reported higher third-quarter earnings and revenue Wednesday, due primarily to better results from its Health Care Benefits segment. The company also raised its earnings guidance for the rest of this year.
CVS has 9,000 locations across the United States, 800 of which operate “MinuteClinics” staffed by nurse practitioners and physician assistants. It has 30,000 pharmacists and 200,000 employees in its stores, the company said during an earnings call Wednesday.
The-CNN-Wire
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