What CVS’ pharmacy-and-insurance split could mean for shoppers

CVS’ decision to separate its retail pharmacy business from its insurance and pharmacy-benefits operations has prompted hopes that consumers may eventually see some relief from rising health-care costs.

Experts told The Post that the breakup of one of the nation’s largest health-care conglomerates could reduce prices on certain services, although the impact is far from guaranteed.

“It is potentially a good thing, however, it will depend on how the regulators enforce the separation,” said Doug Hoey, CEO of the National Community Pharmacists Association.

Roughly a quarter of Americans have their prescriptions managed by CVS, while about 10% get insurance services directly from the company.

Under the new structure, CVS Health will keep Aetna, its insurance arm, and Caremark, its pharmacy benefits manager, together. CVS Pharmacy, including the company’s 9,000 retail locations and mail-order operations, will be placed in a separate company. The split is expected to take effect by early 2028.

Could CVS pharmacy prices fall?

The change in CVS’ supply chain could create more room for competition and may discourage Caremark from using its position to maximize profits from CVS pharmacies, which could translate into lower drug costs for some customers.

“Caremark pays its affiliated CVS retail pharmacies, which results in higher premiums in cost sharing for patients,” Emma Freer, a senior healthcare fellow at the American Economic Liberties Project, told The Post. “So because they’re spinning off their retail pharmacies under this proposal, it would foreclose that particular avenue for that type of gaming.”

CVS said in a statement that there has always been a firewall between the two businesses and that they do not influence each other.

Dr. Mariana Socal, a Johns Hopkins professor who studies the pharmaceutical market, said she does not expect prices to decline because she does not believe the separation truly detaches Caremark from CVS.

“There is no change,” she said.

Which drugs could be most affected?

CVS Health will keep its specialty pharmacy services in-house. That business typically handles prescriptions for cancer treatments, multiple sclerosis medications, hormonal therapies and weight-loss drugs, all of which tend to be more expensive.

Freer, Hoey and Socal all said the restructuring could actually push specialty drug prices higher.

“The specialty pharmacy may use this new well to help replace some of those profits and revenue that might be dried up with these new regulations,” Hoey said.

Will Aetna premiums go down?

Socal also does not expect insurance premiums to fall, arguing that any real cost relief would have required separating Caremark from Aetna instead.

CVS agreed to buy Aetna in 2017 for $69 billion, at a time when regulators were already taking a closer look at ties between insurers and pharmacy-benefit managers.

That scrutiny has only intensified. The Department of Labor finalized a rule last week requiring pharmacy-benefits managers to share cost data and payments with drugmakers.

What could happen before 2028?

CVS Health CEO David Joyner said on CNBC that the move was driven in part by growing scrutiny from lawmakers over health-care conglomerates and the way they profit from controlling large parts of the supply chain.

“Companies need to navigate the regulatory environment, and we are setting ourselves up for success,” he said.

Hoey said the question of whether the split will benefit consumers ultimately rests with regulators.