When a company splits itself in two, Wall Street usually sees value. Billionaire and Cost Plus Drugs co-founder Mark Cuban sees a magic trick.
Cuban isn't buying CVS Health's (CVS) plan to break itself up, and he's urging Congress not to buy it either.
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“That's pretty funny,” Cuban wrote in a post on X on Wednesday in response to a CNBC interview of CVS CEO David Joyner. “He is a genius financial engineer. The split is great for shareholders. Changes nothing for patients or anyone who pays for insurance or care.”
“He is posturing to be able to say 'See, we broke up our company.' Don't fall for it,” he continued, tagging Sens. Josh Hawley (R-Mo.) and Elizabeth Warren (D-Mass.).
Then came the call to action.
“We need to pass the bill now more than ever,” Cuban added, referring to the Break Up Big Medicine Act introduced by the pair of senators.
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One Company Becomes Two… Sort of.
CVS announced last week that it plans to separate into two independent, publicly traded companies, with the split expected in the first half of 2028.
The company keeping the CVS Health name will hold Aetna, CVS Caremark, CVS Specialty, Oak Street Health, and Signify Health. Chairman and CEO David Joyner will lead it.
The other company, CVS Pharmacy, gets the roughly 9,000 retail drugstores, the mail pharmacy, MinuteClinic, and the Health100 technology business. Group President Prem Shah will be its CEO.
Current shareholders will own a piece of both.
The move unwinds nearly two decades of deal-making, including CVS's 2007 Caremark acquisition and its 2018 purchase of Aetna.
The Comment That Lit the Fuse
What set Cuban off was Joyner's own explanation.
Joyner said on CNBC's “Squawk on the Street” that the Break Up Big Medicine bill from Warren and Hawley was one reason for the breakup, according to Matt Stoller of the American Economic Liberties Project, who flagged the remarks on X.
Joyner framed the split as a choice, not a retreat.
“We're doing it out of a position of strength,” Joyner said on CNBC.
In the company's announcement, he said CVS plans “to create two focused companies to improve consumer engagement, affordability, and care coordination.”
Why Cuban Says the Pieces Still Fit Together
Warren and Hawley introduced the Break Up Big Medicine Act in February. It would bar companies from owning health care providers while also owning a health insurer, a pharmacy benefit manager, or a drug or medical device wholesaler. Companies would get one year to come into compliance.
That's where Cuban's math comes in. The company keeping the CVS Health name would still house an insurer in Aetna, a pharmacy benefit manager in Caremark, a specialty pharmacy, and Oak Street Health's primary care clinics under one roof.
That's the exact kind of combination the bill targets. The drugstores are leaving, but the insurer, the pharmacy benefit manager, and the clinics are staying together.
Pharmacy benefit managers like Caremark negotiate drug deals for health plans and help decide which medications get covered. The three largest manage about 80% of prescription drug claims, according to the senators.
Warren made the same point on X the same day.
“CVS sees the writing on the wall: Americans want to break up the giant corporations dominating health care,” Warren wrote. “But this CEO is not fooling us—this lets CVS continue to own a massive conglomerate and rip people off. We must break up these monopolies and put patients over profits.”
The Billionaire With a Pharmacy In the Fight
Cuban isn't just yelling from the bleachers. Cost Plus Drugs, which launched in 2022, sells generic medications at the manufacturer's cost plus a 15% markup, a $5 pharmacy labor fee, and shipping.
He has been pushing the bill for months. In an earlier exchange with Sen. Ted Cruz (R-Texas), Cuban wrote that “The best place to cut spending is by removing the HealthCare middlemen that are Too Big To Care, which is exactly what the Break Up Big Medicine Bill does.”
Cutting a pizza into two boxes doesn't make it any less pizza. Cuban's argument is that until the insurer, the pharmacy benefit manager, and the clinics answer to different owners, CVS's breakup is a rearrangement, not a remedy, and he wants lawmakers to say so long before 2028.
On the date of publication, Caleb Naysmith did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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