CVSCVS Health
- Employees
- 300,000
- Headquarters
- Woonsocket, RI
- CEO
- J. David Joyner
- Next results
- around Feb 9, 2027
9 paragraphs in Risk Factors of the 10-K filed Feb 10, 2026 with nothing like them in the 10-K filed Feb 12, 2025. Quoted exactly. Paragraphs that were only edited are under 10-K change.
Compared with the Risk Factors in the latest 10-K of the other 59 Health care companies: a paragraph with at least half its words the same at another company is called similar, and the companies are listed under it. A paragraph most of them have is marked boilerplate. No line means no other company has one like it. This counts text; it does not say how serious a risk is.
•We may face increased regulatory risks related to our vertical integration strategy, such as legislation prohibiting state licensure of pharmacies affiliated with a PBM.
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•Our Health Care Benefits segment’s operating results and competitiveness is heavily impacted, in the case of Medicaid programs, by the sufficiency of the rates the states determine are actuarially sound based on experience from previous years. Such rate levels may not be representative of actual experience, and insufficient rates will negatively impact our revenues and operating results.
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•Direct-to-consumer (“DTC”) sales of prescription drugs by pharmaceutical companies is a growing trend in the United States. By implementing DTC sales platforms, pharmaceutical companies can advertise, or sell, their own branded drugs directly to patients, bypassing traditional distribution channels and intermediaries, including pharmacies and PBMs. DTC platforms may also increase demand for expensive, brand-name drugs that may not provide significant clinical benefit over more cost-effective alternatives. As a result, the DTC trend may increase overall health care costs for consumers and adversely impact the performance of the Company’s Pharmacy & Consumer Wellness and Health Services segments.
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•In April 2025, CMS issued its final notice detailing final 2026 Medicare Advantage payment rates. Based on CMS’ notice, Medicare Advantage rates resulted in an expected average increase in revenue for the Medicare Advantage industry of 7.16%, which includes a risk score trend increase of 2.10%. Risk scores vary among Medicare Advantage plans depending
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•State Medicaid agencies regularly audit, and state officials regularly investigate, the Company’s performance across all areas of its contractual obligations to the state to determine compliance and quality of services. The Company may be subject to, among other penalties, significant fines, sanctions, corrective actions, and enrollment freezes depending on the findings of these audits and reviews. The Company’s ongoing performance and compliance with program requirements can impact our ability to expand and retain Medicaid business. State Medicaid agencies are also increasingly using the audit process to challenge the legality of PBM practices, such as guaranteed effective rate reconciliations with retail pharmacies and transmission fees.
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•The “Working Families Tax Cut Act,” formerly the “One Big Beautiful Bill Act,” of 2025 makes changes to Medicaid eligibility rules and financing which will lead to reduced eligibility for Medicaid beneficiaries, particularly expansion populations, and reduced state funding, which will impact Medicaid benefits and payment rates. Given these changes, states that have not already done so are unlikely to consider Medicaid expansion.
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our control, including general economic conditions, continuing government efforts to contain health care costs and budgetary constraints at the federal or applicable state or local level and general political issues and priorities.
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There can be no assurance that we have been able to, or will be able to, adequately prevent, detect, and/or remediate such data security incidents.
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1 more
The use of AI and related technology may also increase exposure to reputational, cybersecurity, data privacy, legal, regulatory and operational risks as AI technology rapidly evolves along with public opinion concerning the use of AI and the associated legal and regulatory framework. These risks include, but are not limited to, heightened exposure to cybersecurity incidents or the misuse of data during the integration of AI models and large data sets; increased potential liability and costs associated with complying with rapidly emerging regulatory frameworks; costs and competitive disadvantages associated with the failure to properly integrate AI into existing operations; and reputational harm caused by actual or perceived failures in the performance of AI or AI-related technology.
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New in the latest 10-Q
30 paragraphs in the 10-Q filed Nov 4, 2026 with nothing like them in the 10-Q filed Aug 5, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.
Financial statements and notes
On September 22, 2025, Omnicare, LLC (“Omnicare”), a wholly-owned indirect subsidiary of CVS Health Corporation, and certain of Omnicare’s subsidiary entities (collectively, the “Omnicare Entities”) voluntarily initiated Chapter 11 proceedings under the U.S. Bankruptcy Code. As a result of the initiation of Chapter 11 proceedings, the Company determined that it no longer retained control of the Omnicare Entities and deconsolidated the subsidiaries on September 22, 2025. The Omnicare Entities conduct long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and ancillary services to long-term care facilities and other care settings. Prior to deconsolidation, the financial results of the Omnicare Entities were not material and were included in the Pharmacy & Consumer Wellness segment. As a result of the deconsolidation, the Company recorded a gain on deconsolidation of subsidiary of $ 483 million. Subsequent to deconsolidation, the Company’s retained investment related to its equity ownership of the Omnicare Entities had both a carrying value and a fair value of $ 0.
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In July 2026, CVS Health Corporation entered into agreements with the DOJ and the Unsecured Creditors’ Committee, which were approved by the Bankruptcy Court in August 2026. The effectiveness of the agreements remains subject to the closing of the sale of Omnicare’s assets, among other conditions. These agreements provide that the DOJ will receive a minimum of $ 440 million from Omnicare and CVS Health Corporation. CVS Health Corporation will pay $ 130 million to the DOJ within two weeks of the agreements’ effective date, at which point CVS Health Corporation’s and Omnicare’s appeals will be
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dismissed. Omnicare will transfer to the DOJ any proceeds from the sale or liquidation of assets in its estate that remain after payment of all senior claims. In the event that the DOJ does not receive at least $ 310 million in payments from Omnicare by March 15, 2028, CVS Health Corporation will guarantee the DOJ’s collection of any remaining portion of the $ 310 million by March 31, 2028.
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As of September 30, 2026, the Company determined that the sale of Omnicare’s assets is probable of occurring in the fourth quarter of 2026, and accordingly recorded an estimated contingent guarantee liability of $ 193 million during the three and nine months ended September 30, 2026. The liability reflects the Company’s estimated obligation to ensure that the DOJ receives a minimum of $ 440 million from Omnicare and CVS Health Corporation in accordance with the agreements.
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auditing methodology is subject to pending litigation, so the Company is not able to determine the methodology, and potential extrapolation, that would be used for future audits.
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The Company faces litigation and is subject to investigations concerning practices that relate to billing government payors.
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(7) During the three and nine months ended September 30, 2026, the Omnicare guarantee relates to an estimated contingent guarantee liability recorded in connection with agreements to resolve certain litigation and Chapter 11 bankruptcy matters involving Omnicare. Following bankruptcy court approval of the agreements in August 2026 and the determination that the sale of Omnicare’s assets is probable of occurring in the fourth quarter of 2026, the Company recorded an estimated contingent guarantee liability in the third quarter of 2026. The Omnicare guarantee is reflected in operating expenses within the Corporate/Other Segment.
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(8) During the three and nine months ended September 30, 2025, the goodwill impairment charge relates to the Health Care Delivery reporting unit within the Health Services segment.
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(10) During the three and nine months ended September 30, 2025, the opioid litigation charge relates to a change in the Company’s accrual related to ongoing opioid litigation matters.
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(14) During the three and nine months ended September 30, 2025, the gain on deconsolidation of subsidiary relates to Omnicare, a wholly-owned indirect subsidiary of CVS Health Corporation, and certain of its subsidiary entities. In September 2025, the Omnicare Entities voluntarily initiated Chapter 11 proceedings under the U.S. Bankruptcy Code, at which time the Company determined that it no longer retained control of the Omnicare Entities and deconsolidated the subsidiaries.
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Risk Factors
On November 4, 2026, CVS Health announced its intention to separate into two independent, publicly traded companies in a transaction that is intended to be tax-free to CVS Health and its shareholders for U.S. federal income tax purposes. The planned separation will create two companies: a healthcare solutions company comprising Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, and a retail pharmacy and community healthcare company comprising retail pharmacy, mail pharmacy, MinuteClinic (including virtual care), and the Health100 technology services business. The healthcare solutions company, in the interim, will be referred to as CVS Health. The retail pharmacy and community healthcare company will be named CVS Pharmacy. The separation is expected to be completed in the first half of 2028, subject to customary conditions, including, among others, final approval by the CVS Health Board of Directors, effectiveness of a Form 10 registration statement filed with the SEC and receipt of customary confirmation that the separation is expected to be tax-free to CVS Health and its shareholders.
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Financial statements and notes
CVS Health’s Intention to Separate into Two Independent, Publicly Traded Companies
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Risk Factors
On November 4, 2026, CVS Health announced its intention to separate into two independent, publicly traded companies in a transaction that is intended to be tax-free to CVS Health and its shareholders for U.S. federal income tax purposes. The planned separation will create two companies: a healthcare solutions company comprising Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, and a retail pharmacy and community healthcare company comprising retail pharmacy, mail pharmacy, MinuteClinic (including virtual care), and the Health100 technology services business. The healthcare solutions company, in the interim, will be referred to as CVS Health. The retail pharmacy and community healthcare company will be named CVS Pharmacy. The separation is expected to be completed in the first half of 2028, subject to customary conditions, including, among others, final approval by the CVS Health Board of Directors, effectiveness of a Form 10 registration statement filed with the SEC and receipt of customary confirmation that the separation is expected to be tax-free to CVS Health and its shareholders.
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Financial statements and notes
Change Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
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• During the three months ended September 30, 2025, the gain on deconsolidation of subsidiary relates to Omnicare, a wholly-owned indirect subsidiary of CVS Health Corporation, and certain of its subsidiary entities (collectively, the “Omnicare Entities”). See Note 1 ‘‘Significant Accounting Policies’’ to the unaudited condensed consolidated financial statements for further information on the deconsolidation of the Omnicare Entities.
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• During the nine months ended September 30, 2025, the gain on deconsolidation of subsidiary relates to Omnicare and certain of its subsidiary entities.
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(4) During the three and nine months ended September 30, 2026, the Omnicare guarantee relates to an estimated contingent guarantee liability recorded in connection with agreements to resolve certain litigation and Chapter 11 bankruptcy matters involving Omnicare. Following bankruptcy court approval of the agreements in August 2026 and the determination that the sale of Omnicare’s assets is probable of occurring in the fourth quarter of 2026, the Company recorded an estimated contingent guarantee liability in the third quarter of 2026. The Omnicare guarantee is reflected in operating expenses within the Corporate/Other Segment.
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(5) During the three and nine months ended September 30, 2025, the goodwill impairment charge relates to the Health Care Delivery reporting unit within the Health Services segment.
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(7) During the three and nine months ended September 30, 2025, the opioid litigation charge relates to a change in the Company’s accrual related to ongoing opioid litigation matters.
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Change Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
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The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) ties a portion of each Medicare Advantage plan’s reimbursement to the plan’s “star ratings.” Plans must have a star rating of four or higher (out of five) to qualify for bonus payments. CMS released the Company’s 2027 star ratings in October 2026. The Company’s 2027 star ratings will be used to determine which of the Company’s Medicare Advantage plans have
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ratings of four stars or higher and qualify for bonus payments in 2028. Based on the Company’s membership as of September 2026, more than 69% of the Company’s Medicare Advantage members were in plans with 2027 star ratings of at least 4.0 stars, compared to more than 81% of the Company’s Medicare Advantage members being in plans with 2026 star ratings of at least 4.0 stars based on the Company’s membership as of September 2025.
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Change Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
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• During the three months ended September 30, 2025, the Company recorded a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit within the Health Services segment.
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• During the nine months ended September 30, 2025, the Company recorded a $5.7 billion goodwill impairment charge related to the Health Care Delivery reporting unit within the Health Services segment.
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Change Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
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Change Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended
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Risk Factors
CVS Health is subject to risks related to its intention to separate into two independent, publicly traded companies.
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On November 4, 2026, CVS Health announced its intention to separate into two independent, publicly traded companies in a transaction that is intended to be tax-free to CVS Health and its shareholders for U.S. federal income tax purposes. The planned separation will create two companies: a healthcare solutions company comprising Aetna, CVS Caremark, CVS Specialty, Oak Street Health and Signify Health, and a retail pharmacy and community healthcare company comprising retail pharmacy, mail pharmacy, MinuteClinic (including virtual care), and the Health100 technology services business. The healthcare solutions company, in the interim, will be referred to as CVS Health. The retail pharmacy and community healthcare company will be named CVS Pharmacy. The separation is expected to be completed in the first half of 2028, subject to customary conditions, including, among others, final approval by the CVS Health Board of Directors, effectiveness of a Form 10 registration statement filed with the SEC and receipt of customary confirmation that the separation is expected to be tax-free to CVS Health and its shareholders.
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Executing the proposed separation will require significant time and attention from CVS Health’s senior management and employees, which could disrupt CVS Health’s ongoing business and adversely affect financial results and results of operations. The proposed separation is also complex, and completion of the proposed separation and the timing of its completion will be subject to a number of factors and conditions, including the readiness of the new company to operate as an independent public company and finalization of the capital structure of the new company. Unanticipated developments could delay, prevent or otherwise adversely affect the proposed separation, including, but not limited to, disruptions in general or financial market conditions, material adverse changes in business or industry conditions, the possibility that closing conditions for the separation may not be satisfied or waived, the risk that any consents or approvals required in connection with the separation may not be received, the possibility that the separation may not qualify for the expected tax treatment, and the risk that the separation may be more difficult, time-consuming or costly than expected. There can be no assurances that CVS Health will be able to complete the proposed separation on the terms or on the timeline that was announced, if at all, or that dis-synergy costs, costs of restructuring transactions and other costs incurred in connection with the separation will not exceed CVS Health’s estimates. In addition, if the separation is completed, the Company may not be able to achieve the anticipated benefits that are expected to result from the separation within the expected time frame or at all.
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