WOONSOCKET, Rhode Island: CVS Health announced plans on November 4 to dismantle the healthcare conglomerate it spent two decades building, separating its retail pharmacy chain from its insurance and pharmacy-benefit operations in a major corporate restructuring expected to be completed in the first half of 2028.

The breakup of the $117 billion business will leave CVS Pharmacy operating independently of Aetna, Caremark and other healthcare services. Shareholders will own stakes in both companies after the separation.

CVS shares fell 13 percent in afternoon trading, putting the company on track to lose nearly $15 billion in market value, despite stronger-than-expected third-quarter earnings.

The company reported quarterly adjusted profit of $2.09 per share, exceeding analysts' average estimate of $1.65, according to LSEG data. It also raised its 2026 adjusted earnings forecast to at least $8.20 per share.

For 2027, CVS forecast adjusted earnings of at least $8.65 per share, above analysts' estimates of $8.53. However, investors expressed concerns about the outlook and the unexpected restructuring.

"I think investors are taking a step back to ask themselves why they should lean into a story that is seeing an earnings hiccup in 2027, which is a year when all other peers are seeing accelerating earnings growth," said Kevin Gade, chief operating officer at Bahl & Gaynor.

Chief Financial Officer Brian Newman pointed to challenges facing the pharmacy-benefit business next year, including a government discount drug pricing program, a "less robust selling season" and declining health plan membership.

"CVS shares are weak today despite very strong Q3 operating results because the announced split of the company came as a surprise, and is perceived as happening as a defensive move against regulation rather than an offensive move," UBS analyst Kevin Caliendo said.

The decision comes amid mounting scrutiny of healthcare companies that combine insurance, pharmacy-benefit management and retail pharmacy operations. Critics argue that such arrangements create conflicts of interest and contribute to rising US healthcare spending.

"Vertical integration at the (managed care organizations) has been coming under fire by regulators and customers alike in recent years. CVS has the most exposure to vertical integration in the industry," Morningstar analyst Julie Utterback said, adding that "management probably thought that it was a better time to move somewhat preemptively rather than wait for a legal or legislative decision that forced their hand."

Under the proposed structure, CVS Health will retain Aetna, Caremark, specialty pharmacies and healthcare services businesses Oak Street Health and Signify Health. Chief Executive David Joyner will continue leading that company.

Prem Shah, who currently oversees pharmacy-related businesses and healthcare delivery, will become CEO of CVS Pharmacy. The standalone company will include the retail pharmacy chain, MinuteClinics, mail-order pharmacies and the Health100 consumer platform.

The separation will return CVS to operating as an independent pharmacy chain for the first time since its acquisition of Caremark in 2006. The company subsequently expanded through several acquisitions, including its $78 billion purchase of Aetna in 2018.

Joyner said improvements across the company's 9,000 pharmacies, Caremark and Aetna over the past two years had made the restructuring possible.

"The businesses are running really well," Joyner said in an interview. "We've been afforded the opportunity to make different decisions than we, than I could have two years ago."

CVS has faced pressure from rising medical costs across government and commercial insurance plans, alongside competition from Amazon and other online pharmacies. Increased prescription deliveries have also reduced visits to physical stores.

The company said it remained cautious about the rest of 2026 because of elevated medical costs and other challenges.