CVS plans to separate its retail pharmacy business from its Aetna insurance unit and Caremark pharmacy benefit management business, reversing its strategy of integrating the operations. According to Sina Finance, a small group of executives conducted a months-long strategic review that led to a plan to combine Aetna and Caremark in a new company, while about 9,000 retail pharmacies would form a separate business.

CVS CEO David Joyner, who had publicly rejected a split when he took the role in 2024, said Wednesday the move would better position both companies for growth and make it easier for them to work with outside businesses. The board supports the plan. CVS aims to adapt to changes in the health care industry as regulators and lawmakers increase scrutiny of integrated health care companies. Some states have passed laws requiring pharmacies and pharmacy benefit managers to separate; a Tennessee law is due to take effect in mid-2028, after CVS plans to complete the separation.

Despite reporting earnings above analysts’ expectations, CVS shares fell more than 12% on Wednesday, their biggest one-day decline since January, and the company lost more than $14 billion in market value. Investors questioned the outlook for a standalone pharmacy business and whether the separation would erode financial advantages. Last year, the Aetna-inclusive health benefits segment generated $143 billion in revenue, the pharmacy segment $139 billion, and the segment containing Caremark $190 billion.