STAT NEWS
CVS Health is one of the largest companies in the U.S. It serves the health care needs of hundreds of millions of Americans annually, has a hand in nearly every part of the drug supply chain, and has more than $400 billion in annual revenue.
So when it announced last Wednesday that it will split into two entities, the news made waves.
Here’s the thing: Much of the media coverage frames this move as CVS unwinding its vertical integration in response to ongoing regulatory pressure. That is not what is happening here.
Look at what CVS is signaling to do. One company, CVS Pharmacy, will take the roughly 9,000 retail stores, the mail-order pharmacy, and the MinuteClinics.
The other, potentially keeping the CVS Health name, will hold Aetna; Caremark, the pharmaceutical benefits manager (PBM); CVS Specialty, which is their dispensing pharmacy for medications that treat complex, rare, or chronic health conditions; and Cordavis, the company’s biosimilar manufacturing subsidiary.
And that is what we should be paying attention to. When specialty drug spend represents roughly half or more of pharmacy spend for the average employer, and biosimilar share continues to grow, having the production of medication and access controlled by one entity is problematic for reasons I’ll explain.
Said differently, keeping the PBM and specialty pharmacy together, along with a manufacturing subsidiary, does not unwind the issues with vertical integration that matter most, it preserves them.
In recent months, we have seen tectonic shifts in federal regulatory action that will impact the future of health care and health benefits:
The Transparency in Coverage rule aims to bring health care prices into the open through machine- and human-readable formats, helping employers and consumers better understand their care costs.
The Department of Labor’s final Improving Transparency into Pharmacy Benefit Manager Fee Disclosure rule requires PBMs and other vendors to a plan to clearly report their direct and indirect compensation, including any rebates and other fees associated with dispensing prescription drugs and providing care to plan members.
The requirements in the Consolidated Appropriations Act of 2026 also align or overlap with the new DOL rule.
Taken together, this regulatory push promotes the sharing of price and plan data in ways that tip the balance of power to buyers — patients and America’s employers who provide health benefits to most of the insured population. The goal is for patients and plan fiduciaries to make more informed health care-related purchasing decisions, which is a very reasonable and sensible effort.
Read more here.