CVS Health confirmed in February 2025 that it would separate its PBM operations (Caremark) from its retail pharmacy and insurance (Aetna) businesses into three independent companies. The move, driven by activist investor pressure from Glenview Capital, ends the vertical integration experiment that began with the $69 billion Aetna acquisition in 2018.
For formulary strategists, the implications are immediate. Caremark currently manages formularies for roughly 110 million lives. Without the retail pharmacy network to steer prescriptions and without Aetna as a captive client, Caremark will need to compete on rebate negotiation performance and clinical program outcomes alone.
The split also raises questions about Caremark's specialty pharmacy operations. Specialty drugs account for 55% of total drug spend but only 2% of prescriptions. CVS Specialty, currently integrated with the PBM, generates estimated margins of 8-12% on specialty dispensing. Whether that operation stays with the PBM or the retail entity will determine competitive positioning against Express Scripts and OptumRx.
Plan sponsors should prepare for rebate renegotiations. The historical Caremark value proposition bundled retail network discounts, specialty dispensing margins, and PBM rebates into a single total-value calculation. Unbundled, each component must stand on its own economics.
