In an interview with Fox News Digital, Douglas Hoey of the National Community Pharmacists Association said that splitting CVS Pharmacy from its insurance and Pharmacy Benefits Manager businesses could improve competition and reduce costs. CVS Health on Tuesday announced plans to split its growing conglomerate into separate health insurance and pharmacy businesses, a move that one industry expert welcomed as a potential way to reduce costs for millions of Americans. The separation is expected to be completed in the first half of 2028, creating two independent publicly traded companies. The healthcare solutions company, which will temporarily retain the CVS Health name, will include its pharmacy benefit manager (PBM) insurance plans and its subsidiaries, including Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health. CVS Pharmacy, the company’s retail division, will include approximately 9,000 stores, its mail-order pharmacy business, MinuteClinic and technology services unit Health100. CVS PHARMACY REACHES $315 MILLION SETTLEMENT WITH DEPARTMENT OF JUSTICE OVER PRESCRIPTIONS OF CONTROLLED SUBSTANCES CVS Pharmacy, the company’s retail division, will include approximately 9,000 stores. (Joe Raedle/Getty Images, File / Getty Images) Existing CVS Health investors will receive shares of both companies tax-free, according to the Woonsocket, Rhode Island-based company. The announcement shook investors, sending CVS shares down nearly 13% on Tuesday to levels not seen since the spring. For independent pharmacies, however, the breakup could create a more level playing field against the retail pharmacy giant. 79.96 -11.45 -12.53% An industry expert representing thousands of independent pharmacies told FOX Business that the move could restore competition to the market, improve patient access to medications and potentially reduce prescription drug costs if “CVS becomes a true partner to other pharmacies.” “We think it’s going to be good for competition, good for patients, lower prices, good for small businesses to be able to compete against these conglomerates,” Douglas Hoey of the National Community Pharmacists Association (NCPA) said. CVS OFFERS NEW PHARMACY OPTION FOR PET OWNERS A customer stands at the delivery counter inside a CVS Pharmacy store. (Joe Raedle/Getty Images, File/Getty Images) As a standalone entity, CVS’s retail pharmacy business could see more store closings, Hoey added, pointing to the company’s history of closing about 10% of its locations in the past five years due to poor performance. “With the company splitting up to become CVS Pharmacy, I assume they will look even more closely at underperforming stores and want to close them,” Hoey said. “The good news for patients is that most of the time.” CVS are located near other pharmacies. …And then when one closes, there’s usually another option, whether it’s an independent chain or another one that patients can choose from.” Hoey added that the split could help level the playing field in the pharmacy market, arguing that CVS’s competitive practices have contributed to the closure of independent pharmacies. Today, he said, only about a third of pharmacies nationwide are independently owned. MANAGERS of an exam room for CVS MinuteClinic patients in South Portland, Maine (Gabe Souza/Portland Press Herald via Getty Images, File/Getty Images)”Independent pharmacies have closed. Rite Aid has filed for bankruptcy. Walgreens is no longer a publicly traded company. They were taken off the stock market because they were bought by private equity,” Hoey said. “CVS is not just a competitor, they decide how much their competitors are paid. They also get to decide where patients can go to get their medications,” Hoey said. Splitting the company would mean CVS would not decide “who is the judge, jury and executioner for all the other pharmacies?” Hoey said. CVS may have sought the separation for two main reasons, Hoey said. The move could unlock value for shareholders by separating its slower-growing, lower-margin retail pharmacy business from its faster-growing, more profitable health care divisions. On Tuesday, CVS said the Restructuring would allow the company to “evolve into two companies with greater focus and more value for stakeholders.” A CVS pharmacist prepares vaccines at a store in Huntington Park, California (Christina House/Los Angeles Times via Getty Images, File/Getty Images) 2026, Arkansas and Tennessee, for example, passed laws prohibiting PBMs from owning retail pharmacies, citing potential conflicts of interest, yet both measures face ongoing federal legal challenges “CVS decides how much other pharmacies are paid. They also decide where patients can go to get their prescriptions,” Hoey said. “In some cases, they pay themselves more than they pay other pharmacies.” However, in its legal challenge to the Tennessee law, CVS argued that PBMs operating in the state already comply with existing requirements that they “reimburse unaffiliated pharmacies at the same or higher rate as affiliated pharmacies, and prohibit PBMs from directing patients to affiliated pharmacies instead of pharmacies.” unaffiliated.” As a standalone entity, CVS’s retail pharmacy business could face more store closings, Hoey says (Paul Weaver/SOPA Images/LightRocket via Getty Images, File/Getty Images). The NCPA added that while the split is a positive development, investors will still hold shares in both companies, which could give shareholders an incentive for the two companies to favor each other. “We need more information about how they are going to be regulated,” Hoey said. Hoey said that means Its highly lucrative specialty mail-order operations, which handle high-cost drugs for cancer, multiple sclerosis and rheumatoid arthritis, as well as GLP-1 drugs like Ozempic, will remain part of the pharmacy PBM and insurance business, but we’ll see how it goes. CVS did not immediately respond to FOX Business’ request for comment.
