Largest US Pharmacy Chain Breaks In Half
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Two companies planned
CVS Health would include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. CVS Pharmacy would encompass about 9,000 pharmacies, mail pharmacy, MinuteClinic virtual care and Health100 technology services, according to the company’s Wednesday release.
Business pressures mount
Chief Financial Officer Brian Newman said the pharmacy benefit business could face challenges next year from a government drug discount pricing program. He also cited a less robust selling season and declining membership in health plans during a third-quarter earnings call.
The announcement coincided with a Centers for Medicare & Medicaid Services final rule that cuts 340B payment rates in 2027 as part of efforts to broaden site-neutral policies. Reuters reported that some stock market analysts viewed the split as a defensive move against regulation.
Shares fall after announcement
CVS shares closed down 12.5% at $79.96 on Wednesday, reducing the company’s market value by nearly $15 billion, Reuters reported. A CVS Health spokesperson directed the Daily Caller News Foundation to the company’s Wednesday press release. In the release, an unnamed speaker said the company planned to create two focused businesses to improve consumer engagement, affordability and care coordination.
Key points
- CVS plans to form two independent, publicly traded companies after a board review.
- The healthcare business would include Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health.
- The retail company would include about 9,000 pharmacies and related services.
- CVS shares fell 12.5% to $79.96, wiping nearly $15 billion from its market value.