The Ledger

CVS Health plans to break itself in two, ending the decade-old bet that a pharmacy chain, an insurer and a drug-benefit manager belong under one roof. In a CVS Health press release and an 8-K filing, the company said it will separate into two public companies by the first half of 2028. One keeps the CVS Health name and holds Aetna, the CVS Caremark pharmacy benefit manager, CVS Specialty, Oak Street Health and Signify Health, led by current Chairman and Chief Executive Officer David Joyner. The other, CVS Pharmacy, takes about 9,000 pharmacies, mail pharmacy, MinuteClinic and the Health100 technology business, led by Prem Shah, now a group president. The transaction is intended to be tax-free, and shareholders would own both companies. Who it hits: pharmacy benefit rivals, retail pharmacy landlords, and every payer contract that treats CVS as one counterparty. So what: the release gives no revenue, earnings or debt figures for either company, only an expectation of investment-grade ratings, so the economics of the split are not yet public. Closing still needs final board approval, an effective Form 10 registration with the Securities and Exchange Commission, and confirmation of the tax-free treatment. Confidence: High on the structure and timing, which come from the company’s own release; Low on how the two companies split debt and earnings.

CVS raised its 2026 outlook the same day, with adjusted earnings per share guidance now at least $8.20. The third quarter 2026 results release shows revenue of $108.4 billion, up 5.4 percent, and adjusted earnings per share of $2.09 against $1.60 a year ago. The medical benefit ratio, the share of premiums spent on care, in the Health Care Benefits segment fell to 91.3 percent from 92.8 percent, and adjusted operating income there rose to $912 million from $314 million. Medical membership was 26.1 million, down from 26.7 million a year earlier and flat from June 30. Full-year guidance moved from $7.90 to $8.10 to at least $8.20 for adjusted earnings per share, and cash flow from operations from at least $11.5 billion to at least $15.5 billion. Who it hits: insurers and operators comparing margin recovery in Medicare Advantage and the individual market. So what: the insurer segment is improving on price and cost control while membership shrinks, which is a margin story, not a growth story. Confidence: High; figures are from the company release.

Medicare’s standalone drug plan premiums are on track to rise 50 percent in 2027, from $34 to $51 a month, if enrollees stay put. The Kaiser Family Foundation (KFF) analysis, Medicare Part D Premiums and Cost Sharing in 2027, published October 30, finds 10.4 million of 13.6 million non-subsidized stand-alone plan enrollees, 76 percent, would pay more, including 4.1 million now in zero-premium plans that no longer exist. About 2.4 million would see increases above $50 a month. KFF ties the jump to the end of the Premium Stabilization Demonstration, which had given plan sponsors extra subsidies and capped monthly increases at $50 for 2026. The 2027 range runs from about $6.50 for Centene’s Wellcare Value Script Rx to about $204.50 for UnitedHealth’s AARP Medicare Rx Preferred. Who it hits: stand-alone plan sponsors, pharmacies and seniors choosing plans before open enrollment closes December 7. So what: KFF expects the actual average to land below $51 as people switch, and notes the Centers for Medicare & Medicaid Services projected a far smaller rise, so the gap between those projections is the number to watch. Confidence: High on KFF’s figures; Med on where the final average lands.

MultiCare, a Washington system, closed its affiliation with Oregon’s Samaritan Health Services, with a $700 million investment pledge over ten years. Per Healthcare Dive, supplemental reporting that cites MultiCare’s completion announcement; we could not open the primary release this run. MultiCare, which ran 13 hospitals before the deal, takes on Samaritan’s five hospitals and clinics. Samaritan keeps its name and local leadership, and its chief executive Marty Cahill also leads a MultiCare division. The closing slipped about a month from an October 1 target while regulators cleared remaining pieces, including those tied to Samaritan’s health plans. Who it hits: Oregon coast and Willamette Valley payers and employers, and independent systems weighing a capital-for-control swap. So what: the stated driver is financial stability amid rising costs, lower reimbursement and workforce shortages, the same capital-lifeline logic behind other nonprofit tie-ups this year. Confidence: Med; trade press only, primary release not read.

Option Care Health posted third-quarter revenue of $1.49 billion and withdrew its guidance because it is being sold. The third quarter results release (a GlobeNewswire syndication) shows net revenue up 4.1 percent to $1,493.5 million, net income of $57.4 million and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $124.6 million, up 4.3 percent. The home infusion company will not hold an earnings call. The pending buyer group is Clayton, Dubilier & Rice and McKesson, which in an October 6 McKesson release set a price of $32.05 per share, about $5.8 billion in enterprise value, with Clayton, Dubilier & Rice holding about 51 percent and McKesson investing about $1.4 billion for about 49 percent. Closing is expected in the first half of 2027. Who it hits: infusion competitors and payers contracting for home infusion. So what: steady mid-single-digit growth is the operating baseline the new owners are buying. Confidence: High.

THE DEAL SHEET

No other new transactions confirmed to a primary source in the last 24 hours. Option Care Health (announced October 6) and Surgery Partners (announced October 25-27, per Healthcare Dive) are pending deals, not new ones.