From explosive quarterly profit to a new AI-powered care platform, CVS Health has spent the past several months reshaping how it makes money and how regulators, competitors and patients see it.
Profit triples
CVS Health’s second-quarter earnings offered the clearest sign yet that its multiyear turnaround is taking hold.
The company reported net income of nearly $3 billion for the quarter ended June 30, about triple the $1 billion it earned in the same period last year, according to its Aug. 5 earnings report. Revenue climbed 7.3% year over year to $106.1 billion.
Aetna led the rebound, with the payer posting an adjusted operating income of $2.4 billion, up 85.5% from a year earlier, as its medical loss ratio improved to 87.4% from 89.9%. Total membership held steady at 26 million, though that’s down from 26.7 million a year earlier.
The health services division, which includes Caremark and Oak Street Health, grew revenue 11.5% to $51.8 billion. Pharmacy and consumer wellness revenue rose 0.7% to $33.8 billion.
Buoyed by the results, CVS Health raised its full-year adjusted earnings-per-share guidance to a range of $7.90 to $8.10, up from its earlier forecast of $7.30 to $7.50.
AI ‘front door’ takes shape
In March, CVS Health teamed up with Google Cloud to build an AI-powered platform called Health100, a new subsidiary meant to give consumers a single digital front door into their care, regardless of where they get it or who covers them.
The platform runs on agentic AI to power real-time, “always on” interactions, connecting patients to pharmacist-led care management and pulling data from multiple sources into one view. Google Cloud is supplying the underlying infrastructure, including its Gemini AI models, Cloud Healthcare API and BigQuery, with HIPAA-compliant data governance built in.
CVS Health has pitched Health100 as an open ecosystem that other health technology companies can build on top of, with plans to eventually fold in biometric data from wearable devices. The company said the platform is expected to launch sometime this year.
Prior authorization overhaul
Aetna made its own headlines in April, announcing it had standardized 88% of its prior authorization volume — exceeding the industry’s own commitments — and that more than 95% of eligible requests are now approved within 24 hours.
The insurer said 83% of authorizations are processed in real time, already surpassing a goal AHIP, the industry’s top trade group, set for 2027. Aetna also said it has eliminated more than 1 million provider phone calls through automation and now requires prior authorization for fewer medical services than any other major health plan.
“Prior authorization should enable care, not delay it,” Aetna President Steve Nelson said. “We’re modernizing the process with speed, transparency and clinical judgment.”
Aetna also became the first national payer to combine medical and pharmacy prior authorization decisions into a single, condition-specific review, and it expanded bundled authorization programs for musculoskeletal care after rolling out similar bundles for cancer treatment.
Regulatory heat mounts
CVS Health’s pharmacy benefit manager, Caremark, has drawn fresh scrutiny from federal and state regulators over the past two months.
The FTC announced a settlement with Caremark and its Zinc Health Services subsidiary July 14, resolving allegations that the PBM used anticompetitive rebating practices to inflate insulin list prices and drive up patients’ out-of-pocket costs. The deal is expected to generate up to $8.5 billion in consumer savings over 10 years, plus another $4.5 billion from rebates passed through at the point of sale, according to the FTC. Caremark also agreed to stop favoring higher-priced drugs over lower-cost alternatives and to delink its fees from list prices. The FTC reached a similar settlement with Express Scripts in February; its case against Optum Rx remains pending.
Then, on June 23, Florida Attorney General James Uthmeier opened a separate investigation into whether CVS and Caremark steer patients toward CVS-owned pharmacies, reimburse those stores more generously than competitors for the same prescriptions and burden independent pharmacies with onerous audits. CVS operates about 800 pharmacies in Florida and had until July 28 to respond to the state’s civil investigative demand.
“Florida families and seniors deserve access to affordable medication and real pharmacy choices — not a system rigged by one giant corporation that may favor its own stores and squeeze out competitors,” Mr. Uthmeier said.
CVS Health has said it will cooperate with the Florida probe but pushed back on the underlying premise, arguing that drugmakers, not PBMs, set medication prices.
More layoffs
Aetna’s turnaround hasn’t come without job cuts. The Hartford Business Journal reported that the insurer began laying off 313 remote employees in April, including 17 based near its Hartford, Conn., headquarters, citing operational changes to its small-group insurance business. The cuts, finalized by the end of July, mark the seventh round of layoffs at Aetna since October 2024 and bring the two-year total to more than 1,000 employees.
Store strategy reverses course
After years of net store closures, CVS Health said it plans to open roughly 60 stores in 2026 while closing only a few dozen, its first period of net growth in years. Nearly 20 of the new locations are smaller, pharmacy-only formats under 5,000 square feet that trim front-of-store retail in favor of clinical services. The first opened in Chicago on March 30.
The shift follows the company’s own research. Its 2025 “Rx Report” found 80% of patients prefer face-to-face pharmacy interactions and 84% see pharmacies as credible sources of healthcare information.
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