CVS Plans a Drugstore Spinoff. Will Your Pharmacy Still Be in Network?

The question at the pharmacy counter is usually pretty simple. Can I fill my prescription here, and how much will it cost?

CVS Health announced Wednesday that it wants to spin off its drugstores. The company told investors which business would go with the stores and which would stay behind. For someone picking up a refill on the way home from work, the announcement leaves the most useful question open.

Will my plan still cover a prescription filled here?

CVS is aiming for the first half of 2028, assuming the deal clears its remaining conditions. About 9,000 retail pharmacies, the mail pharmacy, and MinuteClinic would go into the new CVS Pharmacy company; Aetna, the health insurer, would stay with CVS Caremark, which manages prescription benefits, and CVS Specialty, which dispenses specialty drugs.

Even the pharmacies would land on different sides of the split, depending on what kind of pharmacy they are.

A pharmacy benefit manager helps set up the network your drug plan uses. The pharmacy is where somebody checks the prescription, fills it, and tells you what you owe. The network determines where you can use your benefit and can affect what you pay. Medicare explains that a Part D plan can offer lower copays at preferred pharmacies within its network.

So two stores can both take your plan, and one can still cost you more for the same refill.

A CVS store could stay in an Aetna plan’s network after the split if the relevant contracts provide for it. The transaction announcement gives patients no plan-by-plan answer about network participation or preferred status. A pharmacy’s name over the door can stay exactly the same while its place in a plan changes. For the person who has used the same counter for years, preferred status can matter as much as whether the store takes the insurance card at all.

There’s also a reason to watch what stays together. Federal Trade Commission staff have raised concerns about PBMs steering prescriptions to affiliated pharmacies. CVS’s proposal would separate the retail chain from Caremark, while leaving CVS Specialty under the same roof as Caremark and Aetna. Someone who fills a routine prescription at a local store and gets a specialty drug through a separate pharmacy could have two very different questions about the same deal.

CVS says the two companies can make care simpler and more affordable. I’ll take that promise more seriously when a patient can get a straight answer before the next refill. Which nearby stores will be in network? Which will have the lower copay? Will the plan send a clear notice if a patient needs to use a different pharmacy? 

From CVS Health:

Upon separation, David Joyner, currently Chairman and CEO of CVS Health, will be the Chairman and CEO of the healthcare solutions company, and Prem Shah, currently Group President of CVS Health, will be the CEO of CVS Pharmacy. Additional leadership positions and Board members will be announced at a later date.

“Our history is defined by proactively evolving to stay ahead of what’s next in healthcare, and in today’s environment, that means delivering more affordability, greater access, and a simpler experience,” said Joyner. “Over the last two years, we have made meaningful progress: we built a world-class leadership team, strengthened our financials, revitalized operations across the enterprise, and drove total shareholder return. 

From a position of strength, and a focus on the long term, we plan to create two focused companies to improve consumer engagement, affordability, and care coordination.”

An investor can read the filing and see where MinuteClinic goes. A patient should be able to look up a pharmacy’s address and get an answer just as easily.

I keep coming back to the person at the counter. Someone has made time to pick up a prescription, handed over an insurance card, and is waiting for a price. If CVS wants to show that two companies can serve that person better than one, it can start by making sure the answer is easy to find at home, before the patient makes the trip. 

I’ll judge the split by how well it works for the person who needs the medicine.

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