CVS Health (CVS): What This Company Actually Does

How CVS makes money

CVS Health collects insurance premiums from employers and the government through Aetna, pays out members' medical and pharmacy claims, and then earns money a second time when those same members fill their prescriptions at a CVS-owned pharmacy. This "closed loop" is possible only because CVS owns all three pieces — an insurer (Aetna), a pharmacy-benefit manager (Caremark), and a retail pharmacy chain (CVS Pharmacy) — under one corporate roof.

FY2025 segment revenue before eliminations: Health Care Benefits $143.4B, Health Services (Caremark) $190.4B, Pharmacy & Consumer Wellness $139.4B. Because the three segments transact with each other over the same customers and prescriptions, consolidated revenue ($402.1B) is calculated by removing $71.6B in intersegment eliminations from the segment total. Source: 10-K FY2025, p.67.

Where the revenue comes from

Source: 10-K FY2025, p.67. Consolidated revenue ($402.1B) reflects this total minus intersegment eliminations and Corporate/Other adjustments.

Geographic revenue isn't separately disclosed — CVS is almost entirely a U.S. domestic business, which limits currency-related risk, though the 10-K does note some limited international operations in certain risk disclosures.

Source: 10-K FY2025, p.48 (international operations risk language).

Customers and competitors

• UnitedHealth Group — the most direct rival, combining insurance (UnitedHealthcare) with a PBM and care-delivery business (Optum); larger in scale than CVS.
• Walgreens Boots Alliance — a similarly sized pharmacy chain, but without a large in-house insurer or PBM, so it lacks CVS's "get paid twice" structure.
• The Cigna Group — competes directly with Caremark through its Express Scripts PBM, but doesn't operate a retail pharmacy chain like CVS does.

Source: 10-K FY2025, p.4 (customer concentration); web search, Hudson Labs "CVS Top Peers 2026."

The metric that matters most in this sector

Revenue and profit alone don't reveal whether CVS's insurance business is actually being run well. The Medical Benefit Ratio (MBR — the share of premiums paid out as medical costs) shows insurance discipline, while pharmacy same-store sales growth shows whether existing stores are genuinely seeing more prescription activity.

MBR jumped from 84.0% (2022) to 92.5% (2024) before easing slightly to 91.2% (2025) — that two-year spike is the direct cause of the insurance segment's adjusted operating income collapsing from $5,577M (2023) to $307M (2024). 1H FY2026 MBR improved further to 86.0%, per the 10-Q. Meanwhile, most of the pharmacy same-store sales growth comes from drug-price inflation and a growing mix of expensive drugs (like GLP-1s), not necessarily more prescriptions being filled — so the headline growth rate can overstate genuine foot traffic.

Source: 10-K FY2021 p.76, FY2022 p.78, FY2023 p.83, FY2024 p.78, FY2025 p.70 (MBR); 10-K FY2021-2025 MD&A pharmacy segment discussion (same-store sales); 10-Q Q2 FY2026 (1H2026 MBR).

Leadership and ownership

CEO J. David Joyner has served as CEO and President since October 17, 2024, and became Chairman as of January 1, 2026. He is not a founder — an internal promotion who began his career at Aetna in 1986 and has spent roughly 40 years across Caremark and CVS Health. Activist hedge fund Glenview Capital's founder, Larry Robbins, joined the board following a board shakeup after 2024's poor results. Combined insider ownership is under 1% of shares outstanding.

Source: DEF 14A 2026, p.14 (CEO), p.111 (insider ownership), p.112 (5%+ shareholders).

Capital returns

CVS hasn't missed a quarterly dividend since its 1996 IPO — but the quarterly payment, raised from $0.605 (2023) to $0.665 (2024), has stayed frozen at $0.665 through 2025 and into 1H FY2026. Buybacks tell a starker story: $2,012M (2023) and $3,023M (2024) fell to exactly $0 in 2025, and 2026 guidance explicitly states "no share buybacks planned this year" — the company is clearly prioritizing debt paydown and balance-sheet repair over shareholder returns for now.

Source: 10-K FY2025, p.59 (dividends), p.95 (dividend/buyback cash flows); 10-Q Q2 FY2026, guidance commentary.

How this company could fail

• A medical-cost forecasting failure that already happened once — MBR spiked from 84.0% (2022) to 92.5% (2024), and the insurance segment's adjusted operating income fell nearly 94% in a single year. If CVS can't accurately predict how much care its members will use, collecting premiums doesn't translate into profit no matter how much is collected.
• Recurring impairment risk in the Oak Street Health primary-care business — Q3 2025 saw a $5.7 billion goodwill impairment in the Health Care Delivery business (Oak Street Health and related clinics), driven by Medicare Advantage utilization pressure and lower-than-expected CMS rate increases. Further unfavorable policy could trigger additional writedowns.
• Large litigation and regulatory exposure — a $5.8B opioid-litigation reserve in 2022, plus roughly $1.2B in separate legacy litigation costs in 2025. In U.S. healthcare, losing a major government or state lawsuit can hit results in the billions in a single stroke.

Source: 10-K FY2025, p.65, p.86; 10-K FY2022, p.73, p.85 (opioid litigation reserve).

Five-year financials

Source: 10-K FY2021 p.105, 107, 108; FY2022 p.105, 107, 108; FY2025 p.92, 94, 95 (income statement, balance sheet, cash flow statement).

What we still don't know

• Whether the MBR improvement to 86.0% in Q2 FY2026 continues through the back half of the year can't be confirmed from this data alone — it requires checking the next earnings calls.
• Exactly when the Health Care Delivery business (Oak Street Health and related clinics) turns profitable isn't specified in the filings.
• When buybacks will resume, or what debt-paydown milestone would need to be hit before the dividend rises again — the company hasn't given a specific timeline for either.