Largest US Pharmacy Chain Splits In Two, Separates Selling Drugs And Insurance
America's leading healthcare company announced it is branching off into two independent, publicly traded companies, following a strategic review by the CVS Health Board of Directors.
America’s leading healthcare company announced it is branching off into two independent, publicly traded companies, following a strategic review by the CVS Health Board of Directors.
CVS Pharmacy announced Wednesday it would be splitting into two distinct companies, dividing the healthcare conglomerate’s $117 billion in what some stock market analysts are calling “a defensive move against regulation,” a Reuters report found.
A representative from CVS Health Communications did not immediately respond to the DCNF request for comment.
“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 told Reuters on Wednesday.
Chief Financial Officer Brian Newman, said that CVS’s pharmacy benefit Business would face challenges next year from government discount drug pricing program as well as a “less robust selling season” with customers and declining membership in health plans on a third quarter earnings call with the company’s chief quarterly advisors the outlet reported.
The decision for the company split came at the same-time the Centers for Medicare & Medicaid Services (CMS) announced it is slashing 340B payment rates for a federal drug discount program to broaden site-neutral policies in 2027, according to a final rule