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CVS Health runs pharmacies, a pharmacy benefits manager, and a health insurance company.
CVS Health is really three big businesses wearing one name. First, it runs thousands of CVS Pharmacy stores, where people pick up prescriptions, buy snacks, and get vaccines — that's the retail segment. Second, it owns Caremark, a pharmacy benefits manager, or PBM, which is the middleman that negotiates drug prices between drugmakers, insurers, and pharmacies. Third, it owns Aetna, a major health insurer that covers millions of people through employers, Medicare, and government programs. It serves basically everyone: patients, employers, doctors, and the government. Most revenue comes from the insurance and PBM sides, with retail making up a smaller slice.
Think of it as a company that not only sells you medicine but also decides what your insurance pays for it and how much the pharmacy gets. That full loop is the whole strategy. Aetna brings in premiums, Caremark manages drug costs, and the stores are the front door where customers actually show up. Recent years have been bumpy — drug pricing rules, pressure on pharmacy reimbursement, and rising medical costs have squeezed profits. CVS has been cutting costs, closing some stores, and leaning harder into clinics and specialty pharmacy to grow.
Historically, CVS started in 1963 as a small health and beauty shop in Massachusetts, then grew into a pharmacy giant. The big turning points were buying Caremark in 2007, which made it a PBM, and buying Aetna in 2018 for about $69 billion, which made it an insurer. Today it uses its cash to pay down debt from those deals, pay a dividend, and invest in its clinic and digital health push. The bet is simple: if you own the store, the drug middleman, and the insurance card, you keep more of every healthcare dollar.
Saved answer · last researched 11 Oct 2026