CVS Health (CVS) 10-K risk factor changes: FY2023 vs FY2022

- We must maintain and improve our relationships with our [added: retail and specialty pharmacy] customers and increase the demand for our products and services.

- If our compliance or other systems and processes fail or are deemed inadequate, we may suffer brand and reputational harm and become subject to [added: contractual damages,] regulatory actions and/or litigation.

- Our litigation and regulatory risk profiles are changing as we offer new products and services and expand in business areas beyond our historical [removed: core businesses.][added: businesses, and we may face increased regulatory risks related to our vertical integration strategy.]

- We face unique regulatory and other challenges in our [added: PBM,] Public Exchange, Medicare and Medicaid businesses.

- We may not be able to obtain adequate premium rate increases in our Insured Health Care Benefits products, MBRs and operating [removed: results] [added: results,] which could magnify the adverse impact of increases in health care and other benefit costs and of ACA assessments, fees and taxes.

- Failure to meet customer and investor expectations, including with respect to environmental, social and governance [added: (“ESG”)] goals, may harm our brand and reputation, our ability to retain and grow our customer base and membership.

We can provide no assurance that we or our vendors will be able to [removed: contain] [added: contain,] detect or prevent [removed: incident.][added: incidents.]

- Product liability, product [removed: recall] [added: recall, professional liability] or personal injury issues could damage our reputation.

We may not be able to accurately forecast health care and other benefit costs, [added: including as a result of pandemics or disease outbreaks,] which could adversely affect our Health Care Benefits segment’s operating results.

Premiums for our Insured Health Care Benefits products, which comprised [removed: 93%] [added: 94%] of our Health Care Benefits revenues for [removed: 2022,] [added: 2023,] are priced in advance based on our forecasts of health care and other benefit costs during a fixed premium period, which is generally twelve months.

During periods when health care and other benefit costs, utilization and/or medical costs trends experience significant volatility and medical claim submission patterns are changing [removed: rapidly] [added: rapidly,] as [removed: a result of COVID-19,] [added: they did during the COVID-19 pandemic,] accurately detecting, forecasting, managing, reserving and pricing for our (and our self-insured customers’) medical cost trends and incurred and future health care and other benefits costs is more challenging.

There can be no assurance regarding the accuracy of the health care or other benefit cost projections reflected in our pricing, and whether our health care and other benefit costs [removed: (including COVID-19 related testing and vaccination and post-acute care skilled nursing facility and behavioral health costs)] will be affected by [removed: COVID-19 or other variants or viruses] [added: pandemics, disease outbreaks] and other external events over which we have no control.

A number of factors contribute to rising health care and other benefit costs, including [removed: COVID-19 or other variants or viruses,] previously uninsured members entering the health care [removed: system,] [added: system; Medicare members’ utilization of supplemental benefits; other] changes in members’ [removed: behavior and] [added: behavior,] health care utilization [removed: patterns,] [added: patterns and utilization management;] turnover in our membership, [added: health care provider and member fraud;] additional government mandated benefits or other regulatory [added: changes, including] changes [removed: (including under the Families First Act, the CARES Act, and] [added: to or as a result of] the [removed: American Rescue Plan Act),] [added: ACA;] changes in the health status of our [removed: members,] [added: members;] the aging of the population and other changing demographic [removed: characteristics,] [added: characteristics;] advances in medical [removed: technology,] [added: technology;] increases in the number and cost of prescription drugs (including specialty pharmacy drugs and ultra-high cost drugs and [removed: therapies),] [added: therapies);] direct-to-consumer marketing by drug [removed: manufacturers,] [added: manufacturers;] the increasing influence of social media on our members’ health care utilization and other [removed: behaviors,] [added: behaviors; the shift to a consumer-driven business model;] changes in health care practices and general economic conditions (such as inflation and employment [removed: levels).][added: levels); increases in labor costs; pandemics, epidemics or disease outbreaks; influenza-related health care costs (which may be substantial and higher than we expected); clusters of high-cost cases; natural disasters and extreme weather events (which may increase in frequency or intensity as a result of climate change); and numerous other factors that are or may be beyond our control.]

For example, the [added: 2022-2023 influenza season had an earlier than average start; the] 2020-2021 influenza season was impacted by efforts taken to reduce the spread of COVID-19; and the 2019-2020 influenza season [removed: had an earlier than average start and had] [added: maintained] a [removed: higher incidence] [added: high level] of [removed: influenza] [added: severity for a longer period of time] than [removed: the 2018-2019 influenza season.][added: average.]

Furthermore, if we are not able to accurately and promptly anticipate and detect medical cost trends or accurately estimate the cost of incurred but not yet reported claims or reported claims that have not been paid, our ability to take timely corrective [removed: actions to limit future health care costs and reflect our current benefit cost experience in our pricing process may be limited, which would further amplify the extent of any adverse impact on our operating results.]

These risks are particularly acute during periods when health care and other benefit costs, utilization and/or medical cost trends experience significant volatility and medical claim submission patterns are changing [removed: rapidly] [added: rapidly,] as [removed: a result of COVID-19.][added: they did during the COVID-19 pandemic.]

Adverse economic conditions in the U.S. and abroad, including those caused by inflation, high interest [removed: rates,] [added: rates and] supply chain [removed: disruptions and COVID-19,] [added: disruptions,] can materially and adversely impact our businesses, operating results, cash flows and financial condition, including:

- In our [removed: Pharmacy] [added: Health] Services segment, by causing drug utilization to decline, reducing demand for PBM services and adversely affecting the financial health of our PBM clients.

- In our [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segment, by causing drug utilization to decline, changing consumer purchasing power, preferences and/or spending patterns leading to reduced consumer demand for products sold in our stores, potentially increasing levels of theft at our retail locations and adversely affecting the financial health of our LTC pharmacy customers.

- By causing customers and potential customers of our Health Care Benefits and [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segments to purchase fewer products and/or products that generate less profit for us than the ones they currently purchase or otherwise would have purchased.

- In our Health Care Benefits segment, by causing unanticipated increases and volatility in utilization of medical and other covered [removed: services, including COVID-19 related testing, vaccination and behavioral health services,] [added: services] by our medical members, [added: increases in fraudulent claims and claim disputes,] changes in medical claim submission patterns and/or increases in medical unit costs and/or provider [removed: behavior,] [added: behavior as hospitals and other providers attempt to maintain revenue levels in their efforts to adjust to their own economic challenges,] each of which would increase our costs and limit our ability to accurately detect, forecast, manage, reserve and price for our (and our self-insured customers’) medical cost trends and incurred and future health care and other benefits costs.

- By weakening the ability or perceived ability of the issuers and/or guarantors of the debt or other securities we hold in our investment portfolio to perform on their obligations to us, which could result in defaults in those securities and has reduced, [added: and may further reduce, the value of those securities and has created, and may continue to create, net realized capital losses for us that reduce our operating results.]

- By continuing to [removed: cause, over time,] [added: cause] inflation that could cause interest rates to further increase and thereby further increase our interest expense and reduce our operating results, as well as further decrease the value of the debt securities we hold in our investment portfolio, which would further reduce our operating results and/or adversely affect our financial condition.

[removed: Furthermore, reductions] [added: Reductions] in workforce by our customers can [added: also] cause unanticipated increases in the health care and other benefits costs of our Health Care Benefits segment.

Each of our segments, Health Care Benefits, [removed: Pharmacy] [added: Health] Services, which includes our PBM business, and [removed: Retail/LTC,] [added: Pharmacy & Consumer Wellness,] operates in a highly competitive and evolving business environment.

- In our Health Care Benefits segment, we are seeking to [removed: substantially] grow our [removed: Medicaid,] dual eligible [removed: and dual eligible special needs] plan membership over the next several years.

- We requested increases in our premium rates in our Commercial Health Care Benefits business for [removed: 2023] [added: 2024] and expect to request future increases in those rates in order to adequately price for projected medical cost trends, required expansions of coverage and rating limits, and significant assessments, fees and taxes imposed by federal and state governments, including as a result of the ACA.

- The competitive success of our [removed: Pharmacy] [added: Health] Services segment is dependent on our ability to establish and maintain contractual relationships with network pharmacies.

- The competitive success of our [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segment and our specialty pharmacy operations is dependent on our ability to establish and maintain contractual relationships with PBMs and other payors on acceptable terms as the payors’ clients evaluate adopting narrow or restricted retail pharmacy networks.

[added: If we] lose our relationship with one or more drug manufacturers, or if the discounts or rebates provided by drug manufacturers decline, our operating results, cash flows and/or prospects could be adversely affected.

- The PBM industry has been experiencing price compression as a result of competitive pressures and increased client demands for lower [removed: prices,] [added: prices;] increased revenue sharing, including sharing in a larger portion of [added: payments, including] rebates [added: and fees, to PBMs and group purchasing organizations] received from drug [removed: manufacturers,] [added: manufacturers;] enhanced service offerings and/or higher service levels.

For example, decisions to buy our Health Care Benefits and [removed: Pharmacy] [added: Health] Services products and services increasingly are made or influenced by consumers, either through direct purchasing (e.g., Medicare Advantage plans and PDPs) or through Public Exchanges and private health insurance exchanges that allow individual choice.

In January 2022, we entered into the Public Exchanges in eight [added: states, expanded to a total of twelve] states [added: in 2023,] and further expanded to a total of [removed: twelve] [added: 17] states in [removed: January 2023.][added: 2024.]

To compete effectively on Public Exchanges, we have developed or acquired the technology, systems, tools and talent necessary to interact with Public Exchanges and engage Public Exchange consumers [removed: through enhanced consumer-focused sales, marketing channels and customer interfaces.]

[added: Due to the price transparency] provided by Public Exchanges, when we market products we face competitive pressures from existing and new competitors who may have lower cost structures.

In addition, there can be no assurance that our pricing or other actions will result in the profitability of our Public Exchange products in [removed: 2023] [added: 2024] or any future year.

We have set [removed: 2023] [added: 2024] premium rates for our Public Exchange products based on our projections, including as to the health status and quantity of membership and utilization of medical and/or other covered services by members.

The accuracy of the projections reflected in our pricing may be impacted by (i) adverse selection among individuals who require or utilize more expensive medical and/or other covered services, (ii) other plans’ withdrawals from participation in the Public Exchanges we serve, (iii) a rapid increase or decline in membership, [removed: including as a result of individuals losing Medicaid eligibility as redeterminations resume after being suspended during the COVID-19 pandemic,] and (iv) legislation, regulations, enforcement activity and/or judicial decisions that cause Public Exchanges to operate in a manner different than what we projected in setting our premium [removed: rates.][added: rates, including the potential expiration of premium subsidies in 2025.]

Negative publicity may come as a result of adverse media coverage, litigation against us and other industry participants, the ongoing public debates over drug pricing, PBMs, government involvement in drug pricing and purchasing, changes to the ACA, “surprise” medical bills, governmental hearings and/or investigations, actual or perceived shortfalls regarding our industries’ or our own [removed: products] [added: products, including Medicare Advantage plans in general,] and/or business practices (including PBM operations, drug pricing and insurance coverage determinations) and social media and other media relations activities.

Failure to timely identify or effectively respond to changing consumer [removed: preferences and] [added: preferences,] spending [removed: patterns,] [added: patterns] and evolving demographic mixes in the communities we serve, [removed: an inability to expand the products being purchased by our clients and customers,] [added: including shifts toward online shopping,] or [removed: the] failure [removed: or inability] to [removed: obtain or offer particular categories] [added: maintain desirable selections] of [removed: products] [added: merchandise, store environments or guests experiences] could adversely affect our relationship with our customers and clients and the demand for our products and services and could result in excess inventories of products.

- Our recent acquisitions of Signify Health and Oak Street Health subject us to new and additional risks beyond those to which we have been historically subject.

While the public health emergency related to COVID-19 expired in May 2023, COVID-19 still exists and it may, like many other respiratory viruses, wax and wane depending on geography and seasonality.

The future impact COVID-19 will have on the Company and its ability to accurately forecast health care and other benefit costs is uncertain, and will depend on geographies impacted, whether new variants emerge and their severity, the availability and costs of testing, vaccination and treatment, and legal and regulatory actions.

COVID-19 may also impact provider behavior, utilization trends, membership, and overall economic conditions.

These impacts could be adverse and material.

actions to limit future health care costs and reflect our current benefit cost experience in our pricing process may be limited, which would further amplify the extent of any adverse impact on our operating results.

CMS has proposed requiring that health plans offering certain dual eligible programs must also offer Medicaid programs, which could further impact the Company’s ability to obtain or retain membership in its dual eligible programs.

Our recent acquisitions of Signify Health and Oak Street Health subject us to new and additional risks beyond those to which we have been historically subject.

We consummated the Signify Health acquisition in March 2023 through which we expanded our offerings to include health risk assessments, value-based care and provider enablement services, and we also consummated the Oak Street Health acquisition in May 2023 through which we offer multi-payor, senior-focused, value-based primary care for Medicare-eligible patients, broadening our ability to provide primary care services.

The Signify Health and the Oak Street Health businesses are subject to many of the risks described in this Item 1A, as well as certain additional risks that are different from the risks our businesses have historically faced.

The additional risks to which our Signify Health business is subject include, but are not limited to, the following:

- ability to recruit, retain and grow its network of credentialed, high-quality physicians, physician assistants and nurse practitioners to provide clinical services in highly competitive markets for talent;

- successful challenges to Signify Health’s treatment of health care providers as independent contractors, which could result in increased costs and subject the business to regulatory sanction;

- dependence on a concentrated number of key health plan customers;

- the quality of the information received about plan members of such health plans for whom Signify Health will seek to provide in-home evaluations and other services, and the regulatory restrictions and requirements associated with directly contacting plan members;

- ability to perform and ensure the quality of health risk assessments;

- ability to achieve and receive shared health care cost savings;

- the regulatory and business risks associated with participation in certain government health care programs, including the Medicare Shared Savings Program through Signify Health’s Caravan accountable care organizations (“ACOs”) and identification of diagnosis codes related to risk adjustment payments under Part C of the Medicare program;

- health reform initiatives and changes in the rules governing government health care programs, including rules related to the use of in-home health risk assessments; and

- use of “open source” software in its technology, which may make it easier for others to gain access or compromise its proprietary technology.

The additional risks to which our Oak Street Health business is subject include, but are not limited to, the following:

- ability to attract new Medicare-eligible patients and credentialed, high-quality physicians and other providers for senior-focused primary care in a highly competitive market for such patients and providers;

- satisfying the enrollment requirements under government health care programs for physicians and other providers in a timely manner;

- dependence on a significant portion of revenue from Medicare or Medicare Advantage plans, which subjects Oak Street Health to reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program;

- dependence for a significant portion of revenue from agreements with a limited number of key payors with whom Oak Street Health contracts to provide services under terms that may permit a payor to amend the compensation arrangements or terminate the agreements without cause;

- dependence on reimbursements from third-party payors, which can result in substantial delay, and on patients, through copayments and deductibles, which subjects Oak Street Health to additional reimbursement risk;

- under the fixed fee (or capitated) agreements Oak Street Health enters into with health plans, the assumption of the risk that the actual cost of a service it provides to a patient exceeds the reimbursement provided by the health plan;

- reductions in the quality ratings of Medicare health plans Oak Street Health serves could result in a shift of patients from, or the termination of, a health plan Oak Street Health serves;

- submission of inaccurate, incomplete or erroneous data, including risk adjustment data, to health plans and government payors could result in inaccuracies in the revenue Oak Street Health records or receipt of overpayments, which may subject it to repayment obligations and penalties;

- geographic concentration of its primary care centers;

- risks associated with its existing legal proceedings and litigations;

- laws regulating the corporate practice of medicine and the associated agreements entered into with physician practice groups restrict the manner in which the Oak Street Health business is able to direct the operations and otherwise exercise control of its physician practice groups;

- changes in the legal treatment of its contractual arrangements with its physician practice groups could impact the ability to consolidate the revenue of these groups; and

- ability to maintain and enhance its reputation and brand recognition.

The additional risks faced by Signify Health and Oak Street Health may also compound, or be heightened by, many of our other risks, including the risks related to adverse economic conditions in the U.S. and abroad, cybersecurity, and compliance with applicable laws and regulations, among others.

The Signify Health and the Oak Street Health businesses may also be subject to additional risks the existence or significance of which we may not have anticipated prior to the respective acquisitions of such businesses.

Any risks associated with the Signify Health or the Oak Street Health business, if they materialize, could adversely affect our business, financial condition and results of operations, including our ability to timely and effectively integrate the businesses in our operations and the timing and extent of realization of synergies and other benefits that we expected in connection with the acquisitions.

Our experience in managing the additional risks associated with the acquisitions is more limited than our experience in managing the risks associated with our historical businesses, and there is no assurance that we will be able to effectively manage or mitigate such risks.

through enhanced consumer-focused sales, marketing channels and customer interfaces.

In particular, the long-term effects of climate change are expected to be widespread and unpredictable.

- The impact COVID-19 will have on our businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be material and adverse.

The impact of COVID-19 underscores and amplifies certain risks we face.

COVID-19 has spread to every state in the U.S., has been declared a pandemic by the World Health Organization and has severely impacted the economies of the U.S. and other countries around the world.

Although certain of the economic impacts of COVID-19 have moderated and the restrictions imposed as a result of COVID-19 have eased, a rise in infection rates, the development of new variants or viruses could result in, among other things, a return of the following: a reduction in discretionary utilization, the cancellation of elective medical procedures, reduced customer traffic and front store sales in our retail pharmacies, our customers being ordered to close or severely curtail their operations, the adoption of work-from-home policies and a reduction in diagnostic reporting due to reductions in health care provider visits and restrictions on our access to providers’ medical records, all of which have had a negative impact on our businesses.

In addition, as a result of legislative and/or regulatory responses to a rise in infection rates or the development of new variants or viruses, the premiums we charge in our Insured Health Care Benefits products may prove to be insufficient to cover the cost of medical services delivered to our insured medical members, which may increase significantly as a result of higher utilization rates of medical facilities and services and other increases in associated hospital and pharmaceutical costs.

Over the course of the COVID-19 pandemic, we implemented various initiatives, such as COVID-19 related support programs for our customers, medical members and colleagues.

If there is a rise in infection rates or the development of new variants or viruses, we may have to re-institute, extend or expand these initiatives, which could adversely impact our businesses, operating results, cash flows and/or financial condition.

In addition, measures that were imposed to limit the spread of COVID-19 may also be re-instituted, which may lead to impacts including, but not limited to, complete or partial facility closures, labor shortages, financial difficulties of third-party providers, supply chain disruptions and re-introduction of remote work arrangements.

If any of the foregoing materializes, the Company’s ability to operate its businesses effectively may be adversely affected and other risks to the Company, such as the risk of cybersecurity attacks, may be amplified, and the impact on our businesses, operating results, cash flows and/or financial condition would be uncertain but could be adverse and material.

COVID-19 also may result in legal and regulatory proceedings, investigations and claims against us.

We believe COVID-19’s continuing impact on our businesses, operating results, cash flows and/or financial condition primarily will be driven by vaccination rates; the severity of any new COVID-19 variants and the continued effectiveness of vaccines; and whether federal, state and local governments reinstitute and/or intensify policies and initiatives designed to reduce the transmission of COVID-19, including new and existing variants, and to address the financial impacts of a pandemic through additional legislation and other support programs.

These primary drivers are beyond our knowledge and control.

COVID-19 has caused and may continue to cause unanticipated and significant volatility in our health care and other benefits costs, including COVID-19 related testing and vaccination and post-acute care skilled nursing facility and behavioral health costs.

In January 2021, the President of the United States issued an executive order to support government efforts to expand access, availability and use of COVID-19 diagnostic, screening and surveillance and addressed the cost of COVID-19 testing by facilitating COVID-19 testing free of charge to those who lack comprehensive health insurance and clarifying group health plans’ and health insurance issuers’ obligations to provide coverage for COVID-19 testing.

In January 2022, the HHS announced that commercial health insurers must cover the cost of up to eight rapid COVID-19 OTC test kits per individual per 30-day period.

In addition, the timing of vaccine administration to the general public and related costs as well as the identification of new, more infectious strains of the COVID-19 virus and whether the vaccines will be effective against such new strains are uncertain and may impact our MBR.

For 2023, those forecasts include adjustments made to pricing based on prospective expectations for liabilities due to testing, vaccines, direct COVID-19 treatment and deferred care.

Risk-adjusted revenue has been adjusted for deferred care, and forecasted enrollment considers assumptions about the economic environment, though COVID-19 related impacts remain uncertain.

Other factors that affect our health care and other benefit costs include epidemics or other pandemics, changes as a result of the ACA, changes to the ACA and other changes in the regulatory environment, the evolution toward a consumer driven business model, new technologies, influenza-related health care costs (which may be substantial and higher than we expected), clusters of high-cost cases, health care

provider and member fraud, and numerous other factors that are or may be beyond our control.

Many of the requirements set forth above may change once the PHE expires.

The Biden administration recently renewed the PHE on January 11, 2023 and has indicated that they intend for the PHE to expire on May 11, 2023.

There can be no assurance that future health care and other benefits costs will not exceed our projections.

- By increasing medical unit costs and causing changes in provider behavior in our Health Care Benefits segment as hospitals and other providers attempt to maintain revenue levels in their efforts to adjust to their own economic challenges.

and may further reduce, the value of those securities and has created, and may continue to create, net realized capital losses for us that reduce our operating results.

If we

Due to the price transparency

In addition, by working with the U.S. government in the distribution and administration of the COVID-19 vaccine, the Company may be subject to negative publicity related to the government’s actions in response to COVID-19 that are outside of the ability of the Company to control.

Such extreme events or the threat of such extreme events also could disrupt our supply chains and/or our distribution chains for the products we sell.

Entitlement program reform, if it occurs, could have a material adverse effect on our businesses, operations and/or operating results.

Other significant changes to health care and related benefits system legislation or regulation as well as changes with respect to tax and trade policies, tariffs and other government regulations affecting trade between the United States and other countries also are possible and could adversely affect our businesses.

Efforts to amend the ACA and related regulations are possible.

It is also possible that federal and state governments will continue to enact and seriously consider many broad-based legislative and regulatory proposals that will or could materially impact various aspects of the health care and related benefits system and our businesses.

We cannot predict the effect, if any, that new health care and related benefits legislation, future changes to the ACA or the implementation of or failure to implement the outstanding provisions of ACA, may have on our Health Care Benefits, Pharmacy Services and/or retail pharmacy, LTC pharmacy operations and/or operating results.

The federal and many state governments also are considering changes in the interpretation, enforcement and/or application of existing programs, laws and regulations, including changes to payments under and funding of Medicare and Medicaid programs and increased regulation of PBMs.

Further, changes in existing federal or state laws or regulations or the adoption of new laws or regulations relating to additional regulation of PBMs (including network restrictions, formulary management, affiliate reimbursement, contractual guarantees and reconciliations, reimbursement mandates or other PBM services), drug pricing or purchasing, patent term extensions and/or purchase discount and/or rebate arrangements with drug manufacturers also could reduce the discounts or rebates we receive.

Changes in existing federal or state laws or regulations or the adoption of new laws or regulations relating to claims processing and billing also could adversely affect our profitability.

The Bipartisan Infrastructure Act of 2021

We cannot predict the enactment or content of new legislation or regulations or changes to existing laws or regulations or their enforcement, interpretation or application, or the effect they will have on our business operations or operating results, which could be materially adverse.

Examples of such changes include: the federal or one or more state governments fundamentally restructuring or reducing the funding available for Medicare, Medicaid, dual eligible or dual eligible special needs plan programs, increasing its involvement in drug reimbursement, pricing, purchasing and/or importation, changing the laws and regulations governing PBMs’, PDPs’ and/or Managed Medicaid organizations’ interactions with government funded health care programs, changing the tax treatment of health or related benefits, or significantly altering the ACA.

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading [removed: diversified] health solutions company [removed: reshaping] [added: building a world of] health [added: around every consumer it serves and connecting] care [removed: to help make healthier happen] [added: so that it works] for [removed: more Americans.][added: people wherever they are.]

[removed: The] [added: As of December 31, 2023, the] Company [removed: has] [added: had] more than 9,000 retail locations, more than [removed: 1,100] [added: 1,000] walk-in medical clinics, [added: 204 primary care medical clinics,] a leading pharmacy benefits manager with [removed: over 110] [added: approximately 108] million plan members [removed: with] [added: and] expanding specialty pharmacy [removed: solutions] [added: solutions,] and a dedicated senior pharmacy care business serving more than one million patients per year.

The Company also serves an estimated [added: more than] 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”).

The Company [removed: believes] [added: is creating new sources of value through] its integrated [removed: health care] model [removed: increases] [added: allowing it to expand into personalized, technology driven care delivery and health services, increasing] access to quality care, [removed: delivers] [added: delivering] better health outcomes and [removed: lowers] [added: lowering] overall health care costs.

The Company has four reportable segments: Health Care Benefits, [removed: Pharmacy] [added: Health] Services, [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] and Corporate/Other, which are described below.

The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, [removed: PDPs,] [added: PDPs and] Medicaid health care management [removed: services, and health information technology products and] services.

The Company refers to insurance products (where it assumes all or a majority of the risk for medical and dental care costs) as “Insured” and administrative services contract products (where the plan sponsor assumes all or a majority of the risk for medical and dental care costs) as “ASC.” [removed: In addition, effective January 2022, the] [added: The] Company [removed: entered] [added: sold Insured plans directly to individual consumers through] the individual public health insurance exchanges (“Public Exchanges”) in [removed: eight] [added: 12] states [removed: through which it sells Insured plans directly to individual consumers.][added: as of December 31, 2023.]

The Company entered Public Exchanges in [removed: four] [added: five] additional states effective January [removed: 2023.][added: 2024.]

Overview of the [removed: Pharmacy] [added: Health] Services Segment

[removed: The Pharmacy Services segment provides a full range of pharmacy benefit management (“PBM”) solutions, including] [added: PBM solutions include] plan design offerings and administration, formulary management, retail pharmacy network management [removed: services] [added: services,] and [added: specialty and] mail order [removed: pharmacy.][added: pharmacy services.]

In addition, [removed: through] the [removed: Pharmacy Services segment, the] Company provides [removed: specialty pharmacy and infusion services,] clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered [removed: Entities”).The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants.][added: Entities”).]

The [removed: Pharmacy] [added: Health] Services segment’s clients [added: and customers] are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care plans, [added: CMS,] plans offered on [removed: Public] [added: Insurance] Exchanges and [removed: private health insurance exchanges,] other sponsors of health benefit plans throughout the [removed: United States and] [added: U.S., patients who receive care in the Health Services segment’s medical clinics, virtually or in the home, as well as] Covered Entities.

[removed: The] [added: As of December 31, 2023, the] Pharmacy [removed: Services] [added: & Consumer Wellness] segment [removed: operates] [added: operated more than 9,000] retail [added: locations, as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail] specialty pharmacy stores, [removed: specialty mail order pharmacies, mail order dispensing pharmacies,] compounding pharmacies and branches for infusion and enteral nutrition services.

- Management and administrative expenses to support the Company’s overall operations, which include certain aspects of executive management and the corporate relations, legal, compliance, human [removed: resources, information technology] [added: resources] and finance departments, [removed: expenses associated with the Company’s investments in its transformation and enterprise modernization programs] [added: information technology, digital, data] and [added: analytics, as well as] acquisition-related [added: transaction and] integration costs; and

The [removed: COVID-19 pandemic and its emerging new variants continue] [added: coronavirus disease 2019 (“COVID-19”) continues] to impact the economies of the U.S. and other countries around the world.

Health Care [removed: Benefits Segment][added: Benefits’ IBNR Liabilities]

The following information summarizes the Company’s results of operations for [removed: 2022] [added: 2023] compared to [removed: 2021.][added: 2022.]

For discussion of the Company’s results of operations for [removed: 2021] [added: 2022] compared to [removed: 2020,] [added: 2021,] see “Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations”] [added: Operations with Retrospective Adjustments” for the year ended December 31, 2022, which was revised to reflect the items noted above and is] included in [added: Exhibit 99.1 to] the Company’s [removed: Annual] [added: Current] Report on Form [removed: 10-K for the fiscal year ended December 31, 2021] [added: 8-K] filed with the U.S. Securities and Exchange Commission (the “SEC”) on [removed: February 9, 2022.][added: May 25, 2023.]

| | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | | | | | | | |

| In millions | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | $ | | | | | | % | | | | | | $ | | | | | | % | | |

| Products | | | $ | [removed: 226,616] [added: 245,138] | | | | | $ | [removed: 203,738] [added: 226,616] | | | | | $ | [removed: 190,688] [added: 203,738] | | | | | $ | [removed: 22,878] [added: 18,522] | | | | | [removed: 11.2] [added: 8.2] | | % | | | | $ | [removed: 13,050] [added: 22,878] | | | | | [removed: 6.8] [added: 11.2] | | % |

| Premiums | | | [removed: 85,330] [added: 99,192] | | | | | | [removed: 76,132] [added: 85,330] | | | | | | [removed: 69,364] [added: 76,132] | | | | | | [removed: 9,198] [added: 13,862] | | | | | | [removed: 12.1] [added: 16.2] | | % | | | | [removed: 6,768] [added: 9,198] | | | | | | [removed: 9.8] [added: 12.1] | | % |

| Services | | | [removed: 9,683] [added: 12,293] | | | | | | [removed: 11,042] [added: 9,683] | | | | | | [removed: 7,856] [added: 11,042] | | | | | | [removed: (1,359)] [added: 2,610] | | | | | | [removed: (12.3)] [added: 27.0] | | % | | | | [removed: 3,186] [added: (1,359)] | | | | | | [removed: 40.6] [added: (12.3)] | | % |

| Net investment income | | | [removed: 838] [added: 1,153] | | | | | | [removed: 1,199] [added: 838] | | | | | | [removed: 798] [added: 1,199] | | | | | | [removed: (361)] [added: 315] | | | | | | [removed: (30.1)] [added: 37.6] | | % | | | | [removed: 401] [added: (361)] | | | | | | [removed: 50.3] [added: (30.1)] | | % |

| Total revenues | | | [removed: 322,467] [added: 357,776] | | | | | | [removed: 292,111] [added: 322,467] | | | | | | [removed: 268,706] [added: 292,111] | | | | | | [removed: 30,356] [added: 35,309] | | | | | | [removed: 10.4] [added: 10.9] | | % | | | | [removed: 23,405] [added: 30,356] | | | | | | [removed: 8.7] [added: 10.4] | | % |

| Cost of products sold | | | [removed: 196,892] [added: 217,098] | | | | | | [removed: 175,803] [added: 196,892] | | | | | | [removed: 163,981] [added: 175,803] | | | | | | [removed: 21,089] [added: 20,206] | | | | | | [removed: 12.0] [added: 10.3] | | % | | | | [removed: 11,822] [added: 21,089] | | | | | | [removed: 7.2] [added: 12.0] | | % |

| Opioid litigation charges | | | [removed: 5,803] [added: —] | | | | | | [removed: —] [added: 5,803] | | | | | | — | | | | | | [removed: 5,803] [added: (5,803)] | | | | | | [removed: 100.0] [added: (100.0)] | | % | | | | [removed: —] [added: 5,803] | | | | | | [removed: —] [added: 100.0] | | % |

| Loss on assets held for sale | | | [removed: 2,533] [added: $] | [added: —] | | | | | [removed: —] [added: $] | [added: 41] | | | | | [removed: —] [added: $] | [added: —] | | | | | [removed: 2,533] [added: $] | [added: (41)] | | | | | [removed: 100.0] [added: (100.0)] | | % | | | | [removed: —] [added: $] | [added: 41] | | | | | [removed: —] [added: 100.0] | | % |

| Store impairments | | | — | | | | | | [removed: 1,358] [added: —] | | | | | | [removed: —] [added: 1,358] | | | | | | [removed: (1,358)] [added: —] | | | | | | [removed: (100.0)] [added: —] | | % | | | | [removed: 1,358] [added: (1,358)] | | | | | | [removed: 100.0] [added: (100.0)] | | % |

| Goodwill impairment | | | — | | | | | | [removed: 431] [added: —] | | | | | | [removed: —] [added: 431] | | | | | | [removed: (431)] [added: —] | | | | | | [removed: (100.0)] [added: —] | | % | | | | [removed: 431] [added: (431)] | | | | | | [removed: 100.0] [added: (100.0)] | | % |

| Interest expense | | | [removed: 2,287] [added: 2,658] | | | | | | [removed: 2,503] [added: 2,287] | | | | | | [removed: 2,907] [added: 2,503] | | | | | | [removed: (216)] [added: 371] | | | | | | [removed: (8.6)] [added: 16.2] | | % | | | | [removed: (404)] [added: (216)] | | | | | | [removed: (13.9)] [added: (8.6)] | | % |

| Loss on early extinguishment of debt | | | — | | | | | | [removed: 452] [added: —] | | | | | | [removed: 1,440] [added: 452] | | | | | | [removed: (452)] [added: —] | | | | | | [removed: (100.0)] [added: —] | | % | | | | [removed: (988)] [added: (452)] | | | | | | [removed: (68.6)] [added: (100.0)] | | % |

| Other income | | | [removed: (169)] [added: (88)] | | | | | | [removed: (182)] [added: (169)] | | | | | | [removed: (206)] [added: (182)] | | | | | | [removed: 13] [added: 81] | | | | | | [removed: 7.1] [added: 47.9] | | % | | | | [removed: 24] [added: 13] | | | | | | [removed: 11.7] [added: 7.1] | | % |

| Net (income) loss attributable to noncontrolling interests | | | [removed: (16)] [added: (24)] | | | | | | [removed: 12] [added: (16)] | | | | | | [removed: (13)] [added: 12] | | | | | | [removed: (28)] [added: (8)] | | | | | | [removed: (233.3)] [added: (50.0)] | | % | | | | [removed: 25] [added: (28)] | | | | | | [removed: 192.3] [added: (233.3)] | | % |

Commentary - [removed: 2022] [added: 2023] compared to [removed: 2021][added: 2022]

The increase in total revenues was [removed: primarily] driven by growth across all segments.

- Operating expenses as a percentage of total revenues decreased to [removed: 11.8%] [added: 11.1%] in [removed: 2022] [added: 2023] compared to [removed: 12.7%] [added: 11.8%] in [removed: 2021.][added: 2022.]

The [removed: decrease] [added: increase] in operating income was primarily driven by the [added: absence of] $5.8 billion of opioid litigation charges [added: recorded in 2022] and [removed: declines] [added: increases] in the [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segment, [removed: which included] [added: primarily driven by the absence of] a $2.5 billion loss on assets held for sale [added: recorded in 2022] related to the write-down of the Company’s Omnicare® long-term care business (“LTC business”) [removed: during 2022,] [added: which was] partially offset by [removed: the absence of a store impairment charge of approximately $1.4 billion] [added: continued pharmacy reimbursement pressure] and [removed: a $431 million goodwill impairment charge on the remaining goodwill of the LTC reporting unit, both of which were recorded] [added: decreased COVID-19 vaccinations and diagnostic testing compared to 2022, as well as an increase] in the [removed: prior year.][added: Health Services segment.]

See Note [removed: 8] [added: 10] ‘‘Borrowings and Credit Agreements’’ included in Item 8 of this 10-K for additional [removed: information.][added: information about debt issuances and debt repayments.]

- The Company’s effective income tax rate [removed: increased] [added: decreased] to [removed: 26.0%] [added: 25.1%] in [removed: 2022] [added: 2023] compared to [removed: 24.2%] [added: 25.9%] in the prior year.

During the year ended December 31, 2023, the Company completed the acquisition of two key health care delivery assets to enhance its ability to execute on its care delivery strategy by advancing its primary care, home-based care and provider enablement capabilities.

On March 29, 2023, the Company acquired Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, value-based care and provider enablement services.

On May 2, 2023, the Company also acquired Oak Street Health, Inc. (“Oak Street Health”), a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

Both Signify Health and Oak Street Health are included within the Health Services segment.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business.

The Company’s CODM is the Chief Executive Officer.

As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions.

In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations.

This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

Prior period segment financial information has been recast to conform with the current period presentation.

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions.

The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its participants and provides various administrative, management and reporting services to pharmaceutical manufacturers.

During 2023, the Company completed the acquisition of two key health care delivery assets – Signify Health, a leader in health risk assessments, value-based care and provider enablement services, and Oak Street Health, a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

The Company also announced the launch of CordavisTM, a wholly owned subsidiary that will work directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products.

Overview of the Pharmacy & Consumer Wellness Segment

The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services including pharmacy patient care programs, diagnostic testing and vaccination administration, and sells a wide assortment of health and wellness products and general merchandise.

The segment also conducts 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, and provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition in the years ended December 31, 2023, 2022 and 2021, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this Annual Report on Form 10-K.

Financial information for the years ended December 31, 2022 and 2021 has been revised to reflect the impact of the following items, as applicable:

*•*The realignment of the Company’s segments to correspond with changes made to its operating model as described in Note 1 ‘‘Significant Accounting Policies’’ included in Item 8 of this Form 10-K, including the discontinuance of the former Maintenance Choice® segment reporting practice as described within the “Segment Analysis” section of this Item 7.

*•*The impact of the adoption of a new accounting standard related to the accounting for long-duration insurance contracts (the “long-duration insurance accounting standard”), which the Company adopted on January 1, 2023 using a modified retrospective transition method as of January 1, 2021, as described in Note 1 “Significant Accounting Policies” included in Item 8 of this Form 10-K.

*•*The exclusion of the impact of net realized capital gains or losses from adjusted operating income, as described within the “Segment Analysis” section of this Item 7.

| Health care costs | | | 86,247 | | | | | | 71,073 | | | | | | 64,188 | | | | | | 15,174 | | | | | | 21.3 | | % | | | | 6,885 | | | | | | 10.7 | | % |

| Restructuring charges | | | 507 | | | | | | — | | | | | | — | | | | | | 507 | | | | | | 100.0 | | % | | | | — | | | | | | — | | % |

| Loss on assets held for sale | | | 349 | | | | | | 2,533 | | | | | | — | | | | | | (2,184) | | | | | | (86.2) | | % | | | | 2,533 | | | | | | 100.0 | | % |

| Operating expenses | | | 39,832 | | | | | | 38,212 | | | | | | 37,021 | | | | | | 1,620 | | | | | | 4.2 | | % | | | | 1,191 | | | | | | 3.2 | | % |

| Total operating costs | | | 344,033 | | | | | | 314,513 | | | | | | 278,801 | | | | | | 29,520 | | | | | | 9.4 | | % | | | | 35,712 | | | | | | 12.8 | | % |

| Operating income | | | 13,743 | | | | | | 7,954 | | | | | | 13,310 | | | | | | 5,789 | | | | | | 72.8 | | % | | | | (5,356) | | | | | | (40.2) | | % |

| Income before income tax provision | | | 11,173 | | | | | | 5,836 | | | | | | 10,537 | | | | | | 5,337 | | | | | | 91.4 | | % | | | | (4,701) | | | | | | (44.6) | | % |

| Income tax provision | | | 2,805 | | | | | | 1,509 | | | | | | 2,548 | | | | | | 1,296 | | | | | | 85.9 | | % | | | | (1,039) | | | | | | (40.8) | | % |

| Net income | | | 8,368 | | | | | | 4,327 | | | | | | 7,989 | | | | | | 4,041 | | | | | | 93.4 | | % | | | | (3,662) | | | | | | (45.8) | | % |

| Net income attributable to CVS Health | | | $ | 8,344 | | | | | $ | 4,311 | | | | | $ | 8,001 | | | | | $ | 4,033 | | | | | 93.6 | | % | | | | $ | (3,690) | | | | | (46.1) | | % |

- Total revenues increased $35.3 billion, or 10.9%, in 2023 compared to 2022.

- Operating expenses increased $1.6 billion, or 4.2%, in 2023 compared to 2022.

The increase in operating expenses was primarily due to increased operating expenses to support growth in the business, operating expenses associated with Oak Street Health and Signify Health, including the amortization of acquired intangible assets, incremental investments in business operations, acquisition-related transaction and integration costs recorded in 2023 and the absence of a $250 million pre-tax gain on the sale of bswift LLC (“bswift”) and a $225 million pre-tax gain on the sale of PayFlex Holdings, Inc. (“PayFlex”) recorded in 2022.

These increases were partially offset by gains from anti-trust legal settlements and the favorable impact of business initiatives in 2023.

- Operating income increased $5.8 billion, or 72.8%, in 2023 compared to 2022.

These increases in operating income were partially offset by declines in the Health Care Benefits segment, including the absence of the $250 million pre-tax gain on the sale of bswift and the $225 million pre-tax gain on the sale of PayFlex recorded in 2022, as well as the restructuring charges and acquisition-related transaction and integration costs recorded in 2023.

- Interest expense increased $371 million, or 16.2%, in 2023 compared to 2022, due to higher debt in the year ended December 31, 2023 to fund the acquisitions of Signify Health and Oak Street Health.

Outlook

In an increasingly connected and digital world, CVS Health is meeting people wherever they are and changing health care to meet their needs.

The Health Care Benefits segment also provided workers’ compensation administrative services through its Coventry Health Care Workers’ Compensation business (“Workers’ Compensation business”) prior to the sale of this business on July 31, 2020.

The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers.

Overview of the Retail/LTC Segment

The Retail/LTC segment sells prescription drugs and a wide assortment of health and wellness products and general merchandise, provides health care services through its MinuteClinic® walk-in medical clinics, provides medical diagnostic testing, administers vaccinations for illnesses such as influenza, coronavirus disease 2019 (“COVID-19”) and shingles and conducts long-term care pharmacy (“LTC”) operations, which distribute prescription drugs and provide related pharmacy consulting and other ancillary services to long-term care facilities and other care settings.

As of December 31, 2022, the Retail/LTC segment operated more than 9,000 retail locations, more than 1,100 MinuteClinic locations as well as online retail pharmacy websites, LTC pharmacies and on-site pharmacies.

For the year ended December 31, 2022, the Company dispensed 26.8% of the total retail pharmacy prescriptions in the United States.

Our strong local presence and scale in communities across the country has enabled us to continue to play an indispensable role in the national response to COVID-19, as well as provide seamless support for our customers wherever they need us: in our CVS locations, in their homes, and virtually.

The COVID-19 pandemic had a significant impact on the Company’s operating results for the years ended December 31, 2022, 2021 and 2020, primarily in the Company’s Health Care Benefits and Retail/LTC segments.

Beginning in mid-March 2020, the health care system experienced a significant reduction in utilization of medical services (“utilization”) that is discretionary and the cancellation of elective medical procedures.

Utilization remained below historical levels through April 2020, began to recover in May and June 2020 and reached more normal levels in the third and fourth quarters of 2020, with select geographies impacted by COVID-19 waves.

In response to COVID-19, the Company provided expanded benefit coverage to its members, including cost-sharing waivers for COVID-19 related treatments, as well as assistance to members through premium credits, telehealth cost-sharing waivers and other investments.

During 2020, COVID-19 also resulted in a shift in the Company’s medical membership.

The Company experienced declines in Commercial membership due to reductions in workforce at our existing customers, substantially offset by increases in Medicaid membership primarily as a result of the suspension of eligibility redeterminations and increased unemployment.

During the year ended December 31, 2021, overall medical costs in the first quarter were generally consistent with historical baseline levels in the aggregate, however the segment experienced increased COVID-19 testing and treatment costs and lower Medicare risk-adjusted revenue.

During the second quarter, COVID-19 testing and treatment costs persisted, however at levels significantly lower than those observed during the first quarter.

Beginning in the third quarter of 2021, medical costs once again increased primarily driven by the spread of emerging new variants of COVID-19, which resulted in increased testing and treatment costs throughout the remainder of the year.

During the year ended December 31, 2022, the impact of COVID-19 within the Health Care Benefits segment has generally stabilized as a result of the Company’s ability to capture COVID-19 related medical costs in pricing.

Retail/LTC Segment

During March 2020, the Company experienced increased prescription volume due to the greater use of 90-day prescriptions and early refills of maintenance medications, as well as increased front store volume as consumers prepared for the COVID-19 pandemic.

Beginning in the second quarter and continuing throughout the remainder of the year, the Company experienced reduced customer traffic in its retail pharmacies and MinuteClinic locations due to shelter-in-place orders as well as reduced new therapy prescriptions and decreased long-term care prescription volume as a result of the COVID-19 pandemic.

In addition, the Company incurred incremental operating expenses associated with the Company’s COVID-19 pandemic response efforts and waived fees associated with prescription home delivery and associated front store products.

During 2020, the Company also played a key role in supporting the local communities in which it operates through the administration of diagnostic testing at its CVS pharmacy locations, as well as in long-term care facilities, at community-based testing sites in underserved areas and through its Return ReadySM solution.

The Company also began administering COVID-19 vaccinations in long-term care facilities during December 2020.

During the first quarter of 2021, the Company experienced reduced customer traffic in its retail pharmacies, which reflected the impact of a weaker cough, cold and flu season, while it administered the highest quarterly volume of COVID-19 diagnostic tests.

The Company began administering COVID-19 vaccines in its retail pharmacies during February 2021.

During the second quarter, the segment generated earnings from COVID-19 vaccines and saw improved customer traffic as vaccinated customers began more actively shopping in CVS locations.

During the third and fourth quarters, emerging new variants drove the continued administration of COVID-19 vaccinations (including boosters) and diagnostic testing, while the segment also generated earnings from the sale of over-the-counter (“OTC”) test kits in the front store.

During the year ended December 31, 2021, the Company administered more than 32 million COVID-19 tests and more than 59 million COVID-19 vaccines and sold more than 22 million OTC test kits.

During the year ended December 31, 2022, the customary quarterly operating income progression in the Retail/LTC segment continued to be impacted by COVID-19.

During the first quarter, the Company saw high volumes of administration of COVID-19 vaccinations, as well as demand for OTC test kits in the front store, particularly in the beginning of the year when

the Omicron variant incidence was high.

In addition, the Company administered the highest quarterly volume of COVID-19 diagnostic tests of 2022 during the first quarter, however a decline compared to the prior year.

During the second and third quarters, the Company continued to generate earnings from the sale of OTC test kits, as customers performed more in-home testing versus diagnostic testing, in addition to earnings from the continued administration of COVID-19 diagnostic testing and vaccinations, albeit at lower levels than those experienced in the first quarter.

During the fourth quarter, the Company saw an increase in COVID-19 vaccine administration from the prior quarter related to the bivalent COVID-19 booster.

During the year ended December 31, 2022, the Company administered more than 15 million COVID-19 tests and nearly 28 million COVID-19 vaccines and sold more than 63 million OTC test kits.

The COVID-19 pandemic continues to evolve.

The Company believes COVID-19’s impact on its businesses, operating results, cash flows and/or financial condition primarily will be driven by the geographies impacted and the severity and duration of the pandemic; the pandemic’s impact on the U.S. and global economies and consumer behavior and health care utilization patterns; and the timing, scope and impact of legislation as well as other federal, state and local governmental responses to the pandemic.

Those primary drivers are beyond the Company’s knowledge and control.

As a result, the impact COVID-19 will have on the Company’s businesses, operating results, cash flows and/or financial condition is uncertain, but the impact could be adverse and material.

The Company’s investment portfolio supported the following products at December 31, [removed: 2022] [added: 2023] and [removed: 2021:][added: 2022:]

| In millions | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Experience-rated products | | | $ | [removed: 744] [added: 723] | | | | | $ | [removed: 957] [added: 744] | |

| Remaining products | | | [removed: 23,147] [added: 25,555] | | | | | | [removed: 25,185] [added: 23,147] | | |

| Total investments (1) | | | $ | [removed: 23,891] [added: 26,278] | | | | | $ | [removed: 26,142] [added: 23,891] | |

(1)Includes long-term investments of $17 million which [removed: have been] [added: were] accounted for as assets held for sale and [removed: are] [added: were] included in assets held for sale on the consolidated balance sheet at December 31, 2022.

The debt securities in the Company’s investment portfolio had an average credit quality rating of A at both December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] with a fair value of approximately [removed: $6.0] [added: $4.6] billion and [removed: $6.7] [added: $6.0] billion rated AAA at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively.

The fair value of debt securities that were rated below investment grade (that is, having a credit quality rating below BBB-/Baa3) was [removed: $1.9] [added: $2.1] billion and [removed: $2.3] [added: $1.9] billion at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively (of which [removed: 1.6%] [added: 1.5%] and [removed: 2.0%] [added: 1.6%] at December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively, supported experience-rated products).

At December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the Company held [removed: $202] [added: $218] million and [removed: $305] [added: $202] million, respectively, of municipal debt securities that were guaranteed by third parties, representing 1% of total investments at both December 31, [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

These securities had an average credit quality rating of AA+ [removed: and AA] at [added: both] December 31, [removed: 2022] [added: 2023] and [removed: 2021, respectively,] [added: 2022,] with the guarantee.

These securities had an average credit quality rating of [added: AA- and] A at [removed: both] December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] respectively, without the guarantee.

At both December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] less than 1% of debt securities were valued using inputs that reflect the Company’s assumptions (categorized as Level 3 inputs in accordance with [removed: accounting principles generally accepted in the United States of America).][added: GAAP).]

See Note [removed: 4] [added: 5] ‘‘Fair Value’’ included in Item 8 of this 10-K for additional information on the methodologies and key assumptions used to determine the fair value of investments.

For additional information related to investments, see Note [removed: 3] [added: 4] ‘‘Investments’’ included in Item 8 of this 10-K.

If a debt security is in an unrealized loss position and the Company has the intent to sell the security, or it is more likely than not that the Company will have to sell the security before recovery of its amortized cost basis, [added: the amortized cost basis of the security is written down to its fair value and the difference is recognized in net income.]

[removed: If a debt] security is in an unrealized loss position and the Company does not have the intent to sell and it is more likely than not that the Company will not have to sell such security before recovery of its amortized cost basis, the Company bifurcates the impairment into credit-related and non-credit related components.

Assuming an immediate increase of 100 basis points in interest rates, the theoretical decline in the fair values of market sensitive instruments at December 31, [removed: 2022] [added: 2023] is as follows:

- The fair value of long-term debt issued by the Company would decline by approximately [removed: $2.9] [added: $3.5] billion [removed: ($3.6] [added: ($4.4] billion pretax).

- The theoretical reduction in the fair value of interest rate sensitive investments partially offset by the theoretical reduction in the fair value of interest rate sensitive liabilities would result in a net decline in fair value of approximately [removed: $595] [added: $570] million [removed: ($750] [added: ($720] million pretax) related to continuing non-experience-rated products.

[removed: Reductions] [added: Net reductions] in [removed: the] fair value [removed: of investment securities] would be reflected as an unrealized loss in equity, as the Company classifies these debt securities as available for [removed: sale.][added: sale and the effect of the interest rate on interest rate sensitive liabilities is recorded in other comprehensive income (loss).]

If the value of the Company’s publicly traded domestic equity securities held within its investment portfolio were to decline by 15%, this would result in a net decline in fair value of [removed: $20] [added: $32] million [removed: ($26] [added: ($41] million pretax).

Based on overall exposure to interest rate risk and equity price risk, the Company believes that these changes in market rates and prices would not materially affect consolidated near-term financial condition, operating results or cash flows as of December 31, [removed: 2022.][added: 2023.]

At December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the Company did not have any material foreign currency exchange rate or commodity derivative instruments in place and believes its exposure to foreign currency exchange rate risk is not material.

Those risks include risks related to [removed: the COVID-19 pandemic and risks related to] information security, including cybersecurity.

The Company is dedicating and will continue to dedicate significant resources and incur significant expenses to maintain and update on an ongoing basis the systems and processes that are designed to mitigate the information security risks it faces and protect the security of its computer systems, software, [removed: networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, disrupt or degrade service or cause other damage.]

The impact of cyber attacks has not been material to the Company’s operations or operating results through December 31, [removed: 2022.][added: 2023.]

If a debt

networks and other technology assets against attempts by unauthorized parties to obtain access to confidential information, disrupt or degrade service or cause other damage.

Please see “Cybersecurity” included in Item 1C of this 10-K for further information.

the amortized cost basis of the security is written down to its fair value and the difference is recognized in net income.

The Company does not record liabilities at fair value.

The spread of COVID-19, or actions taken to mitigate its spread, could have material and adverse effects on our ability to operate our businesses effectively, including as a result of the complete or partial closure of facilities or labor shortages.

Disruptions in our supply chains, our distribution chains and/or public and private infrastructure, including communications, financial services and supply chains, could materially and adversely impact our business operations.

We have transitioned a significant subset of our colleagues to a remote work environment in an effort to mitigate the spread of COVID-19, as have a

significant number of our third-party service providers, which may amplify certain risks to our businesses, including an increased demand for information technology resources, increased risk of phishing and other cyber attacks, increased risk of unauthorized dissemination of sensitive personal information or proprietary or confidential information about us or our medical members or other third-parties and increased risk of business interruptions.

CVS Health Corporation, together with its subsidiaries (collectively, “CVS Health,” the “Company,” “we,” “our” or “us”), is a leading [removed: diversified] health solutions company [removed: reshaping] [added: building a world of] health [added: around every consumer it serves and connecting] care [removed: to help make healthier happen] [added: so that it works] for [removed: more Americans.][added: people wherever they are.]

[removed: The Company has] [added: As of December 31, 2023, we had] more than 9,000 retail locations, more than [removed: 1,100] [added: 1,000] walk-in medical clinics, [added: 204 primary care medical clinics,] a leading pharmacy benefits manager with [removed: over 110] [added: approximately 108] million plan members [removed: with] [added: and] expanding specialty pharmacy [removed: solutions] [added: solutions,] and a dedicated senior pharmacy care business serving more than one million patients per year.

[removed: The Company also serves] [added: We serve] an estimated [added: more than] 35 million people through traditional, voluntary and consumer-directed health insurance products and related services, including expanding Medicare Advantage offerings and a leading standalone Medicare Part D prescription drug plan (“PDP”).

The Company has four reportable segments: Health Care Benefits, [removed: Pharmacy] [added: Health] Services, [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] and Corporate/Other.

This means delivering solutions that are more personalized, simpler to [removed: use,] [added: use] and increasingly digital so [removed: that] consumers can receive care when, where and how they desire.

[removed: The Company believes its] [added: We believe our] consumer-centric strategy will drive sustainable long-term growth and deliver value for all stakeholders.

The Company offered [added: point of care] COVID-19 [removed: vaccinations] [added: testing] at more than [removed: 9,000 CVS] [added: 2,000] pharmacy locations as of December 31, [removed: 2022.][added: 2023.]

The Health Care Benefits segment operates as one of the nation’s leading diversified health care benefits providers, serving an estimated [added: more than] 35 million people as of December 31, [removed: 2022.][added: 2023.]

The Health Care Benefits segment offers a broad range of traditional, voluntary and consumer-directed health insurance products [added: and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs and Medicaid health care management services.]

The Health Care Benefits segment’s customers include employer groups, individuals, college students, part-time and hourly [removed: workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates.]

The Company offered network-based HMO and/or PPO plans in 46 states and Washington, D.C. in [removed: 2022.][added: 2023.]

The Company offered PDP plans in all 50 states and Washington, D.C. in [removed: 2022.][added: 2023.]

The Company offered a wide selection of Medicare Supplement products in 49 states and Washington, D.C. in [removed: 2022.][added: 2023.]

The Company offered these services on an Insured or ASC basis in 16 states in [removed: 2022.][added: 2023.]

At December 31, [removed: 2022,] [added: 2023,] the Company’s underlying nationwide provider network had approximately [removed: 1.6] [added: 1.7] million participating providers.

As of December 31, [removed: 2022,] [added: 2023,] all of the Company’s Commercial HMO and all of ALIC’s PPO members who were eligible participated in HMOs or PPOs that are accredited by the NCQA.

The Health Care Benefits segment is utilizing the full breadth of the Company’s assets to build enterprise technology that will help guide our members through their health care [added: journey, provide them a high level of service, enable healthier outcomes and encourage them to take next best actions to lead healthier lives.]

Medical membership is dispersed throughout the [removed: United States,] [added: U.S.,] and the Company also serves medical members in certain countries outside the [removed: United States.][added: U.S. The Company offers a broad range of traditional, voluntary and consumer-directed health insurance products]

[removed: The Company offers a broad range of traditional, voluntary] and [removed: consumer-directed health insurance products and] related services, many of which are available nationwide.

[removed: In addition, effective January 2022, the] [added: The] Company [removed: entered] [added: sold Insured plans directly to individual consumers through] the individual public health insurance exchanges (“Public Exchanges”) in [removed: eight] [added: 12] states [removed: through which it sells Insured plans directly to individual consumers.][added: as of December 31, 2023.]

The Company entered Public Exchanges in [removed: four] [added: five] additional states effective January [removed: 2023.][added: 2024.]

[removed: In 2022, 2021 and 2020,] Health Care Benefits segment revenues from the federal government accounted for [removed: 14%,] 14% [removed: and 13%, respectively,] of the Company’s consolidated total [removed: revenues.][added: revenues in 2023, 2022 and 2021.]

Contracts with CMS for coverage of Medicare-eligible individuals in the Health Care Benefits segment accounted for approximately [removed: 74%, 79%] [added: 73%, 74%] and [removed: 78%,] [added: 79%,] respectively, of the Company’s consolidated revenues from the federal government in [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020.][added: 2021.]

Where required by state laws, premium rates are filed and approved by [added: state regulators prior to contract inception.]

CMS also considers inflation, changes in utilization patterns and average per capita [removed: fee-for-service Medicare costs in the calculation of the fixed capitation payment or premium.][added: fee-]

CMS released the Company’s [removed: 2023] [added: 2024] star ratings in October [removed: 2022.][added: 2023.]

The Company’s [removed: 2023] [added: 2024] star ratings will be used to determine which of the Company’s Medicare Advantage plans have ratings of four stars or higher and qualify for bonus payments in [removed: 2024.][added: 2025.]

Based on the Company’s membership at December 31, [removed: 2022, 21%] [added: 2023, 87%] of the Company’s Medicare Advantage members were in plans with [removed: 2023] [added: 2024] star ratings of at least 4.0 stars, compared to [removed: 87%] [added: the unmitigated 21%] of the Company’s Medicare Advantage members being in plans with [removed: 2022] [added: 2023] star ratings of at least 4.0 stars based on the Company’s membership at December 31, [removed: 2021.][added: 2022.]

The Health Care Benefits segment’s quarterly operating income progression is impacted by (i) the seasonality of benefit costs which generally increase during the year as Insured members progress through their annual deductibles and out-of-pocket expense [removed: limits and] [added: limits,] (ii) [added: continued changes in product mix between Commercial and Government medical membership and (iii)] the seasonality of operating expenses, which are generally the highest during the fourth quarter due primarily to spending to support readiness for the start of the upcoming plan year and marketing associated with Medicare annual enrollment.

During the year ended December 31, 2022, the impact of COVID-19 within the Health Care Benefits segment [removed: has] generally stabilized as a result of the Company’s ability to capture COVID-19 related medical costs in pricing, and the segment [removed: has] experienced a return to a more normal seasonality pattern, as described above.

During the year ended December 31, [removed: 2020,] [added: 2022,] the customary quarterly operating income progression [removed: was also] [added: in the Pharmacy & Consumer Wellness segment continued to be] impacted by COVID-19.

Additional Health Care Benefits segment competitors include other types of medical and dental provider organizations, various specialty service providers (including [removed: pharmacy benefit management (“PBM”)] [added: PBM] services providers), health care consultants, financial services companies, integrated health care delivery organizations (networks of providers who also coordinate administrative services for and assume insurance risk of their members), third party administrators [removed: (“TPAs”), HIT companies] [added: (“TPAs”)] and, for certain plans, programs sponsored by the federal or state governments.

Emerging competitors include start up health care benefits plans, [removed: technology companies,] provider-owned health plans, new joint ventures (including not-for-profit joint ventures among firms from multiple industries), financial services firms that are distributing competing products on their proprietary Private Exchanges, and consulting firms that are distributing competing products on their proprietary Private Exchanges, as well as [removed: non-][added: non-traditional distributors such as retail companies.]

The Company competes for provider solutions and [removed: HIT] [added: health information technology (“HIT”)] business with other large health plans and commercial health care benefit insurance companies as well as information technology companies and companies that specialize in provider solutions and HIT.

In addition to competitive pressures affecting the Company’s ability to obtain new customers or retain existing customers, the Health Care Benefits segment’s medical membership has been and may continue to be adversely affected by adverse and/or uncertain economic conditions and reductions in workforce by existing customers due to adverse and/or uncertain general economic conditions, especially in the [removed: United States] [added: U.S.] and industries where such membership is concentrated.

[removed: Pharmacy] [added: Health] Services Segment

[removed: The Pharmacy Services segment provides a full range of] PBM [removed: solutions, including] [added: solutions include] plan design offerings and administration, formulary management, retail pharmacy network management [removed: services] [added: services,] and [added: specialty and] mail order [removed: pharmacy.][added: pharmacy services.]

In addition, [removed: through] the [removed: Pharmacy Services segment, the] Company provides [removed: specialty pharmacy and infusion services,] clinical services, disease management services, medical spend management and pharmacy and/or other administrative services for providers and federal 340B drug pricing program covered entities (“Covered Entities”).

The Company operates a group purchasing organization that negotiates pricing for the purchase of pharmaceuticals and rebates with pharmaceutical manufacturers on behalf of its [removed: participants.][added: participants and provides various administrative, management and reporting services to pharmaceutical manufacturers.]

The [removed: Pharmacy] [added: Health] Services segment’s clients [added: and customers] are primarily employers, insurance companies, unions, government employee groups, health plans, PDPs, Medicaid managed care (“Managed Medicaid”) plans, [added: CMS,] plans offered on Insurance Exchanges and other sponsors of health benefit plans throughout the [removed: United States and] [added: U.S., patients who receive care in the Health Services segment’s medical clinics, virtually or in the home, as well as] Covered Entities.

We are creating new sources of value through our integrated model allowing us to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.

During the year ended December 31, 2023, the Company completed the acquisition of two key health care delivery assets to enhance its ability to execute on its care delivery strategy by advancing its primary care, home-based care and provider enablement capabilities.

On March 29, 2023, the Company acquired Signify Health, Inc. (“Signify Health”), a leader in health risk assessments, value-based care and provider enablement services.

On May 2, 2023, the Company also acquired Oak Street Health, Inc. (“Oak Street Health”), a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

Both Signify Health and Oak Street Health are included within the Health Services segment.

In connection with its new operating model adopted in the first quarter of 2023, the Company realigned the composition of its segments to reflect how its Chief Operating Decision Maker (the “CODM”) reviews information and manages the business.

The Company’s CODM is the Chief Executive Officer.

As a result of this realignment, the Company formed a new Health Services segment, which in addition to providing a full range of pharmacy benefit management (“PBM”) solutions, also delivers health care services in the Company’s medical clinics, virtually, and in the home, as well as provider enablement solutions.

In addition, the Company created a new Pharmacy & Consumer Wellness segment, which includes its retail and long-term care pharmacy operations and related pharmacy services, as well as its retail front store operations.

This segment will also provide pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

Prior period segment financial information has been recast to conform with the current period presentation.

See Note 19 ‘‘Segment Reporting’’ included in Item 8 of this 10-K for segment financial information.

We are building a world of health around every consumer we serve, seeking to make it easier and more affordable to live a healthier life.

We address holistic health – physical, emotional, social and economic – and we are creating new sources of value through our integrated care model which allows us to expand into personalized, technology driven care delivery and health services, increasing access to quality care, delivering better health outcomes and lowering overall health care costs.

workers, health plans, health care providers (“providers”), governmental units, government-sponsored plans, labor groups and expatriates.

for-service Medicare costs in the calculation of the fixed capitation payment or premium.

During the year ended December 31, 2023, overall medical costs continued to progress toward normalized utilization in the first quarter.

Beginning in the second quarter of 2023, the segment experienced higher than previously expected medical cost trend in Medicare Advantage driven by increased outpatient and supplemental benefit utilization when compared with pandemic influenced utilization levels in the prior year.

This elevated utilization continued through year end, which resulted in elevated medical costs throughout the remainder of 2023.

The Health Services segment provides a full range of PBM solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions.

During 2023, the Company completed the acquisition of two key health care delivery assets – Signify Health, a leader in health risk assessments, value-based care and provider enablement services, and Oak Street Health, a leading multi-payor operator of value-based primary care centers serving Medicare eligible patients.

The Company also announced the launch of CordavisTM, a wholly owned subsidiary that will work directly with pharmaceutical manufacturers to commercialize and/or co-produce high quality biosimilar products.

*PBM Solutions*

select one of the Company’s formularies.

In connection with its new operating model adopted in the first quarter of 2023, the Company consolidated its specialty and mail order pharmacy fulfillment operations, which were previously included in the former Pharmacy Services segment, with its retail and long-term care pharmacy fulfillment operations in the newly formed Pharmacy & Consumer Wellness segment.

Under this new operating model, the Health Services segment pays an administrative service fee to the Pharmacy & Consumer Wellness segment, in exchange for which the Pharmacy & Consumer Wellness segment provides pharmacy fulfillment services to support the Health Services segment’s specialty and mail order pharmacy offerings.

Parkinson’s disease, epilepsy and multiple sclerosis and is accredited by the NCQA.

*Value-Based Care*

In response to rising healthcare spending in the U.S., commercial, government and other payors are shifting away from fee-for-service payment models towards value-based models, including risk-based payment models that tie financial incentives to quality, efficiency and coordination of care.

Value-based care (“VBC”) refers to the goal of incentivizing healthcare providers to simultaneously increase quality while lowering the cost of care for patients.

More specifically, providers in a VBC model are incentivized to focus on more preventative care, higher quality of care and better coordination of care to create better health outcomes and avoid potentially expensive complications from illnesses that could be managed more conveniently and cost effectively.

The Company is committed to expanding value-based care in the U.S. and delivering higher quality care to patients at a lower overall cost to the industry.

The Company operates in value-based care through two primary means: providing comprehensive primary care through its Oak Street Health primary care centers and enabling independent health systems transition to value-based care through contracting and care management services.

The Company’s value-based care assets typically contract with payors, primarily Medicare Advantage plans, and/or CMS.

The Company’s Oak Street Health business operates retail-like, community-based centers that provide medical primary care services and support Medicare eligible patients in the management of chronic illnesses and the prevention of unnecessary acute events.

Through its centers and management services organization, the Company combines an innovative health care model and its proprietary Canopy technology with superior patient experience and quality care.

The Company engages its patients through the use of an innovative community outreach approach.

Once engaged, the Company integrates population health analytics, social support services and primary care into the care model to drive improved patient outcomes.

The Company contracts with health plans and CMS to generate medical costs savings, assume full financial risk of its patients and realize a return on its investment in primary care.

The Company’s clinics implement a branded and consumer-focused design to create a welcoming environment that engages patients.

In an increasingly connected and digital world, CVS Health is meeting people wherever they are and changing health care to meet their needs.

The Company believes its integrated health care model increases access to quality care, delivers better health outcomes and lowers overall health care costs.

The Company seeks to reimagine the consumer healthcare experience to make it easier and more affordable to live a healthier life.

CVS Health is also shifting from transaction-based care to addressing holistic health – physical, emotional, social, economic – which will lead to higher quality care and lower medical costs.

The Company is a leader in key segments of health care through its foundational businesses and is seeking to create new sources of value by expanding into next generation care delivery and health services, with a goal of improving satisfaction levels for both providers and consumers.

COVID-19

The COVID-19 pandemic and its emerging new variants continue to impact the U.S. and other countries around the world.

Our strong local presence and scale in communities across the country has enabled us to play an indispensable role in the national response to COVID-19, as well as provide seamless support for our customers wherever they need us: in our CVS locations, in their homes, and virtually.

The Company offered COVID-19 diagnostic testing at more than 4,700 CVS pharmacy locations, at community-based testing sites in underserved areas and through its Return ReadySM solution as of December 31, 2022.

During 2021, the Company also began selling over-the-counter (“OTC”) test kits in its retail locations and online.

The Company began administering COVID-19 vaccinations in long-term care facilities and in certain of its retail pharmacies during December 2020 and February 2021, respectively, and began the administration of COVID-19 boosters and pediatric vaccines during the fourth quarter of 2021.

During the year ended December 31, 2022, the Company administered more than 15 million COVID-19 tests and nearly 28 million COVID-19 vaccines and sold more than 63 million OTC test kits.

The Company expects to continue to play a significant role in COVID-19 testing and vaccine administration in the future, while maintaining a strong commitment to testing and vaccine equity by optimizing site locations and targeting outreach initiatives to reach vulnerable populations.

The impact of COVID-19 on the Company’s businesses, operating results, cash flows and financial condition in the years ended December 31, 2022, 2021 and 2020, as well as information regarding certain expected impacts of COVID-19 on the Company, is discussed throughout this 10-K.

and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, PDPs, Medicaid health care management services, and health information technology (“HIT”) products and services.

The Health Care Benefits segment also provided workers’ compensation administrative services through its Coventry Health Care Workers’ Compensation business (“Workers’ Compensation business”) prior to the sale of this business on July 31, 2020.

With the launch of Aetna Virtual Primary CareTM in 2021, eligible members now have access to health services remotely, paired with access to in-person visits with providers in the Company’s network, including at MinuteClinic® locations.

journey, provide them a high level of service, enable healthier outcomes and encourage them to take next best actions to lead healthier lives.

state regulators prior to contract inception.

Beginning in 2014, the ACA imposed significant new industry-wide fees, assessments and taxes, including an annual levy known as the health insurer fee (the “HIF”).

In December 2019, the HIF was repealed for calendar years after 2020.

For additional information on the ACA fees, assessments and taxes, see Note 1 ‘‘Significant Accounting Policies’’ included in Item 8 of this 10-K.

The Company’s goal is to collect premiums and fees where possible, or solve for, all of the ACA-related fees, assessments and taxes.

Beginning in mid-March, the health care system experienced a significant reduction in utilization that is discretionary and the cancellation of elective medical procedures.

Utilization remained below historical levels through April 2020, began to recover in May and June 2020 and reached more normal levels in the third and fourth quarters of 2020, with select geographies impacted by COVID-19 waves.

traditional distributors such as retail companies.

The provider solutions and HIT marketplaces and products are evolving rapidly.

Many information technology product competitors have longer operating histories, better brand recognition, greater marketplace presence and more experience in developing innovative products.

The Company also provides various administrative, management and reporting services to pharmaceutical manufacturers.

PBM Services

The Pharmacy Services segment operates mail order dispensing pharmacies in the United States.

The Pharmacy Services segment operates specialty mail order pharmacies, retail specialty pharmacy stores and branches for infusion and enteral nutrition services in the United States.

The Company’s specialty mail order pharmacies have been awarded Specialty Pharmacy accreditation from URAC.

The ACHC accreditation includes an additional accreditation by the Pharmacy Compounding Accreditation Board, which certifies compliance with the highest level of pharmacy compounding standards.

certain chronic diseases, such as diabetes and cardiovascular conditions, to identify gaps in care, adhere to their prescribed medications and manage their health conditions.

The Pharmacy Services segment has a significant number of competitors offering PBM services, including large, national PBM companies

Retail/LTC Segment

For the year ended December 31, 2022, the Company dispensed approximately 26.8% of the total retail pharmacy prescriptions in the United States.

The Company’s MinuteClinic locations offer a variety of health care services.

The ExtraCare program allows the Company to balance marketing efforts so it can reward its best customers by providing them with automatic sale prices, customized coupons, ExtraBucks® rewards and other benefits.

The information contained in Note [removed: 16] [added: 18] ‘‘Commitments and Contingencies’’ included in Item 8 of this 10-K is incorporated herein by reference.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

[removed: ][added: ]

| If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements | | | | | | | | | | | | [removed: ☐] | | | [removed: Yes] | | | [removed: ☒] | | | [removed: No] [added: ☐] | | |

| Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). | | | | | | | | | | | | [removed: ☐] | | | [removed: Yes] | | | [removed: ☒] | | | [removed: No] [added: ☐] | | |

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately [removed: $121,258,020,752] [added: $88,547,881,979] as of June 30, [removed: 2022,] [added: 2023,] based on the closing price of the common stock on the New York Stock Exchange.

As of [removed: February 1, 2023,] [added: January 31, 2024,] the registrant had [removed: 1,284,111,667] [added: 1,258,449,553] shares of common stock outstanding.

Information contained in the definitive proxy statement for CVS Health Corporation’s [removed: 2023] [added: 2024] Annual Meeting of Stockholders, to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, [removed: 2022] [added: 2023] (the “Proxy Statement”), is incorporated by reference in Parts III and IV to the extent described therein.

| Item 1: | | | [removed: [Business](#i1ae8e8cf4da649e4afa2b073939999d2_13)] [added: [Business](#i39a9ffb3d54a4bfdbacb5b3fe645889f_13)] | | | [removed: [2](#i1ae8e8cf4da649e4afa2b073939999d2_13)] [added: [3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_13)] | | |

| Item 1A: | | | [Risk [removed: Factors](#i1ae8e8cf4da649e4afa2b073939999d2_34)] [added: Factors](#i39a9ffb3d54a4bfdbacb5b3fe645889f_34)] | | | [removed: [34](#i1ae8e8cf4da649e4afa2b073939999d2_34)] [added: [38](#i39a9ffb3d54a4bfdbacb5b3fe645889f_34)] | | |

| Item 1B: | | | [Unresolved Staff [removed: Comments](#i1ae8e8cf4da649e4afa2b073939999d2_37)] [added: Comments](#i39a9ffb3d54a4bfdbacb5b3fe645889f_37)] | | | [removed: [62](#i1ae8e8cf4da649e4afa2b073939999d2_37)] [added: [67](#i39a9ffb3d54a4bfdbacb5b3fe645889f_37)] | | |

| Item 2: | | | [removed: [Properties](#i1ae8e8cf4da649e4afa2b073939999d2_40)] [added: [Properties](#i39a9ffb3d54a4bfdbacb5b3fe645889f_40)] | | | [removed: [62](#i1ae8e8cf4da649e4afa2b073939999d2_40)] [added: [68](#i39a9ffb3d54a4bfdbacb5b3fe645889f_40)] | | |

| Item 3: | | | [Legal [removed: Proceedings](#i1ae8e8cf4da649e4afa2b073939999d2_43)] [added: Proceedings](#i39a9ffb3d54a4bfdbacb5b3fe645889f_43)] | | | [removed: [63](#i1ae8e8cf4da649e4afa2b073939999d2_43)] [added: [69](#i39a9ffb3d54a4bfdbacb5b3fe645889f_43)] | | |

| Item 4: | | | [Mine Safety [removed: Disclosures](#i1ae8e8cf4da649e4afa2b073939999d2_46)] [added: Disclosures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_46)] | | | [removed: [63](#i1ae8e8cf4da649e4afa2b073939999d2_46)] [added: [69](#i39a9ffb3d54a4bfdbacb5b3fe645889f_46)] | | |

| | | | [Information about our Executive [removed: Officers](#i1ae8e8cf4da649e4afa2b073939999d2_49)] [added: Officers](#i39a9ffb3d54a4bfdbacb5b3fe645889f_49)] | | | [removed: [64](#i1ae8e8cf4da649e4afa2b073939999d2_49)] [added: [70](#i39a9ffb3d54a4bfdbacb5b3fe645889f_49)] | | |

| Item 5: | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i1ae8e8cf4da649e4afa2b073939999d2_55)] [added: Securities](#i39a9ffb3d54a4bfdbacb5b3fe645889f_55)] | | | [removed: [66](#i1ae8e8cf4da649e4afa2b073939999d2_55)] [added: [72](#i39a9ffb3d54a4bfdbacb5b3fe645889f_55)] | | |

| Item 6: | | | [removed: [Reserved](#i1ae8e8cf4da649e4afa2b073939999d2_58)] [added: [Reserved](#i39a9ffb3d54a4bfdbacb5b3fe645889f_58)] | | | [removed: [68](#i1ae8e8cf4da649e4afa2b073939999d2_58)] [added: [74](#i39a9ffb3d54a4bfdbacb5b3fe645889f_58)] | | |

| Item 7: | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i1ae8e8cf4da649e4afa2b073939999d2_61)] [added: Operations](#i39a9ffb3d54a4bfdbacb5b3fe645889f_61)] | | | [removed: [69](#i1ae8e8cf4da649e4afa2b073939999d2_61)] [added: [75](#i39a9ffb3d54a4bfdbacb5b3fe645889f_61)] | | |

| Item 7A: | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i1ae8e8cf4da649e4afa2b073939999d2_97)] [added: Risk](#i39a9ffb3d54a4bfdbacb5b3fe645889f_97)] | | | [removed: [102](#i1ae8e8cf4da649e4afa2b073939999d2_97)] [added: [105](#i39a9ffb3d54a4bfdbacb5b3fe645889f_97)] | | |

| Item 8: | | | [Financial Statements and Supplementary [removed: Data](#i1ae8e8cf4da649e4afa2b073939999d2_100)] [added: Data](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)] | | | [removed: [105](#i1ae8e8cf4da649e4afa2b073939999d2_100)] [added: [108](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)] | | |

| Item 9: | | | [Changes in and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#i1ae8e8cf4da649e4afa2b073939999d2_181)] [added: Disclosure](#i39a9ffb3d54a4bfdbacb5b3fe645889f_184)] | | | [removed: [182](#i1ae8e8cf4da649e4afa2b073939999d2_181)] [added: [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_184)] | | |

| Item 9A: | | | [Controls and [removed: Procedures](#i1ae8e8cf4da649e4afa2b073939999d2_184)] [added: Procedures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_187)] | | | [removed: [182](#i1ae8e8cf4da649e4afa2b073939999d2_184)] [added: [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_187)] | | |

| Item 9C: | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i1ae8e8cf4da649e4afa2b073939999d2_2199023257430)] [added: Inspections](#i39a9ffb3d54a4bfdbacb5b3fe645889f_193)] | | | [removed: [183](#i1ae8e8cf4da649e4afa2b073939999d2_2199023257430)] [added: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_193)] | | |

| Item 10: | | | [Directors, Executive Officers and Corporate [removed: Governance](#i1ae8e8cf4da649e4afa2b073939999d2_193)] [added: Governance](#i39a9ffb3d54a4bfdbacb5b3fe645889f_199)] | | | [removed: [183](#i1ae8e8cf4da649e4afa2b073939999d2_193)] [added: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_199)] | | |

| Item 12: | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i1ae8e8cf4da649e4afa2b073939999d2_199)] [added: Matters](#i39a9ffb3d54a4bfdbacb5b3fe645889f_205)] | | | [removed: [183](#i1ae8e8cf4da649e4afa2b073939999d2_199)] [added: [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_205)] | | |

| Item 13: | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i1ae8e8cf4da649e4afa2b073939999d2_202)] [added: Independence](#i39a9ffb3d54a4bfdbacb5b3fe645889f_208)] | | | [removed: [184](#i1ae8e8cf4da649e4afa2b073939999d2_202)] [added: [201](#i39a9ffb3d54a4bfdbacb5b3fe645889f_208)] | | |

| Item 14: | | | [Principal Accountant Fees and [removed: Services](#i1ae8e8cf4da649e4afa2b073939999d2_205)] [added: Services](#i39a9ffb3d54a4bfdbacb5b3fe645889f_211)] | | | [removed: [184](#i1ae8e8cf4da649e4afa2b073939999d2_205)] [added: [201](#i39a9ffb3d54a4bfdbacb5b3fe645889f_211)] | | |

| Item 15: | | | [Exhibits and Financial Statement [removed: Schedules](#i1ae8e8cf4da649e4afa2b073939999d2_211)] [added: Schedules](#i39a9ffb3d54a4bfdbacb5b3fe645889f_217)] | | | [removed: [185](#i1ae8e8cf4da649e4afa2b073939999d2_211)] [added: [202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_217)] | | |

We [removed: are taking] [added: want to take] advantage of these safe harbor provisions.*

*Certain information contained in this 10-K is forward-looking within the meaning of the Reform Act or [removed: SEC] [added: Securities and Exchange Commission (“SEC”)] rules.

This information includes, but is not limited to: “Outlook for [removed: 2023”] [added: 2024”] of Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) included in Item 7, “Quantitative and Qualitative Disclosures About Market Risk” included in Item 7A, “Government Regulation” included in Item 1, and “Risk Factors” included in Item 1A.

*All statements addressing the future operating performance of CVS Health or any segment or any subsidiary and/or future events or developments, [removed: including] [added: including, but not limited to,] statements relating to the [removed: impact of coronavirus disease 2019 (“COVID-19”) and any new variants or viruses on the] Company’s [removed: businesses,] investment portfolio, operating results, cash flows and/or financial condition, statements relating to corporate strategy, statements relating to future revenue, operating income or adjusted operating income, earnings per share or adjusted earnings per share, Health Care Benefits segment business, sales results and/or trends, medical cost trends, medical membership, Medicare Part D membership, medical benefit ratios and/or operations, [removed: Pharmacy] [added: Health] Services segment business, sales results and/or trends and/or operations, [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segment business, sales results and/or trends and/or operations, incremental investment spending, interest expense, effective tax rate, weighted-average share count, cash flow from operations, net capital expenditures, cash available for debt repayment, statements related to possible, [removed: proposed or] [added: proposed,] pending [added: or completed] acquisitions, joint ventures, investments or combinations that involve, among other things, the timing or likelihood of receipt of regulatory approvals, the timing of completion, integration synergies, net synergies and integration risks and other costs, including those related to CVS Health’s [removed: proposed acquisition] [added: acquisitions] of Oak Street Health, Inc. (“Oak Street Health”) and [removed: pending acquisition of] Signify Health, Inc. (“Signify Health”), enterprise modernization, transformation, leverage ratio, cash available for enhancing shareholder value, inventory reduction, turn rate and/or loss rate, debt ratings, the Company’s ability to attract or retain customers and clients, store development and/or relocations, new product development, and the impact of industry and regulatory developments, as well as statements expressing optimism or pessimism about future operating results or events, are forward-looking statements within the meaning of the Reform Act.*

*Certain [removed: of these] [added: additional] risks and uncertainties and other factors are described under “Risk Factors” included in Item 1A of this 10-K; these are not the only risks and uncertainties we face.

| Item 1C: | | | [Cybersecurity](#i39a9ffb3d54a4bfdbacb5b3fe645889f_1951) | | | [67](#i39a9ffb3d54a4bfdbacb5b3fe645889f_1951) | | |

| Item 9B: | | | [Other Information](#i39a9ffb3d54a4bfdbacb5b3fe645889f_190) | | | [199](#i39a9ffb3d54a4bfdbacb5b3fe645889f_190) | | |

| Item 11: | | | [Executive Compensation](#i39a9ffb3d54a4bfdbacb5b3fe645889f_202) | | | [200](#i39a9ffb3d54a4bfdbacb5b3fe645889f_202) | | |

| Item 16: | | | [Form 10-K Summary](#i39a9ffb3d54a4bfdbacb5b3fe645889f_220) | | | [206](#i39a9ffb3d54a4bfdbacb5b3fe645889f_220) | | |

| | | | [Signatures](#i39a9ffb3d54a4bfdbacb5b3fe645889f_223) | | | [207](#i39a9ffb3d54a4bfdbacb5b3fe645889f_223) | | |

| Item 9B: | | | [Other Information](#i1ae8e8cf4da649e4afa2b073939999d2_187) | | | [182](#i1ae8e8cf4da649e4afa2b073939999d2_187) | | |

| Item 11: | | | [Executive Compensation](#i1ae8e8cf4da649e4afa2b073939999d2_196) | | | [183](#i1ae8e8cf4da649e4afa2b073939999d2_196) | | |

| Item 16: | | | [Form 10-K Summary](#i1ae8e8cf4da649e4afa2b073939999d2_214) | | | [189](#i1ae8e8cf4da649e4afa2b073939999d2_214) | | |

| | | | [Signatures](#i1ae8e8cf4da649e4afa2b073939999d2_217) | | | [190](#i1ae8e8cf4da649e4afa2b073939999d2_217) | | |

Cybersecurity Risk Management

Securing the Company’s business information, intellectual property, customer, patient and employee data and technology systems is essential for the continuity of its businesses, meeting applicable regulatory requirements and maintaining the trust of its stakeholders.

Cybersecurity is an important and integrated part of the Company’s enterprise risk management function that identifies, monitors and mitigates business, operational and legal risks.

To help protect the Company from a major cybersecurity incident that could have a material impact on operations or the Company’s financial results, the Company has implemented policies, programs and controls, including technology investments that focus on cybersecurity incident prevention, identification and mitigation.

The steps the Company takes to reduce its vulnerability to cyberattacks and to mitigate impacts from cybersecurity incidents include, but are not limited to: establishing information security policies and standards, implementing information protection processes and technologies, monitoring its information technology systems for cybersecurity threats, assessing cybersecurity risk profiles of key third-parties, implementing cybersecurity training and collaborating with public and private organizations on cyber threat information and best practices.

The Company is currently in material compliance with applicable information privacy and cybersecurity standards.

The Company has implemented a Cybersecurity Incident Response Plan (the “Plan”), which is integrated into its overall crisis management program.

The Plan provides a framework for responding to cybersecurity incidents.

The Plan identifies applicable requirements for incident disclosure and reporting as well as provides protocols for incident evaluation, including the use of third-party service providers and partners, processes for notification and internal escalation of information to the Company’s senior management, the disclosure committee, the Board and appropriate Board committees.

The Plan also addresses requirements for the Company’s external reporting obligations.

The Plan is reviewed and updated, as necessary, under the leadership of the Company’s Chief Information Security Officer (“CISO”) and Chief Privacy Officer (“CPO”).

The Company’s information technology systems and processes are assessed by independent third parties, as appropriate to their business requirements, for compliance with the following standards: HIPAA; NIST 800-53; System and Organization Controls (“SOC”) 1; SOC 2 Type 2; HI-TRUST; Payment Card Industry Data Security Standards; and the National Association of Insurance Commissioners.

The Company annually purchases a cybersecurity risk insurance policy that would help defray the costs associated with a covered cybersecurity incident if it occurred.

Although the Company did not experience a material cybersecurity incident during the year ended December 31, 2023, the scope and impact of any future incident cannot be predicted.

See “Item 1A.

Risk Factors” for more information on the Company’s cybersecurity-related risks.

Governance

Management has responsibility to manage risk and bring to the Board’s attention the most material near-term and long-term risks to the Company.

The Company’s CISO leads management’s assessment and management of cybersecurity risk.

The CISO reports to the Company’s Chief Digital, Data, Analytics & Technology Officer (the “CDDATO”), who reports directly to the Company’s Chief Executive Officer.

The CDDATO, CISO and the CPO, regularly review cybersecurity matters with management.

The current CDDATO, CISO and CPO each has more than 10 years of experience managing risks or advising on cybersecurity issues.

The Board is actively engaged in overseeing and reviewing the Company’s strategic direction and objectives, taking into account, among other considerations, the Company’s risk profile and related exposures, as part of this oversight the Board has delegated certain of these responsibilities to committees of the Board.

The Board has delegated the responsibility for the oversight of the Company’s cybersecurity risks program to the Nominating and Corporate Governance Committee.

As part of this oversight, the Nominating and Corporate Governance Committee reviews the Company’s cybersecurity program periodically, and at least annually.

The Company’s CDDATO and CISO update the Nominating and Corporate Governance Committee periodically, and at least annually, and the full Board as needed, on the Company’s cybersecurity program, including with respect to particular cybersecurity threats, incidents or new developments in the Company’s risk profile.

The CISO is a member of the Company’s disclosure committee, and the CPO advises the disclosure committee on cybersecurity matters on an as-needed basis.

During 2023, the Board conducted a review of its overall committee structure, membership and responsibilities in an effort to enhance its oversight.

As part of this review, the Board has determined that it will shift the delegation of the oversight of the Company’s cybersecurity risks program to the Audit Committee effective March 2024.

The Company also leases office space in other locations in the [removed: United States.][added: U.S.]

The Health Care Benefits segment also owns or leases office space in other locations in the [removed: United States] [added: U.S.] and several other countries.

[removed: Pharmacy] [added: Health] Services Segment

The [removed: Pharmacy] [added: Health] Services segment includes owned or leased mail service dispensing pharmacies, call centers, on-site pharmacy stores, retail specialty pharmacy stores, specialty mail service pharmacies and [removed: branches for infusion and enteral services throughout the United States.][added: primary care centers.]

As of December 31, [removed: 2022,] [added: 2023,] the [removed: Retail/LTC] [added: Pharmacy & Consumer Wellness] segment operated the following properties:

- Approximately [removed: 7,795] [added: 7,500] retail stores, of which approximately 5% were owned.

Net selling space for retail stores was approximately [removed: 77.4] [added: 74.6] million square feet as of December 31, [removed: 2022.][added: 2023.]

- Approximately [removed: 1,880] [added: 1,895] retail pharmacies within retail chains, as well as approximately [removed: 60] [added: 30] clinics in Target Corporation (“Target”) stores;

- Owned distribution centers and leased distribution facilities throughout the [removed: United States] [added: U.S.] totaling approximately [removed: 10.7] [added: 10.1] million square feet; and

- Owned and leased LTC pharmacies throughout the [removed: United States] [added: U.S.] and an owned LTC repackaging facility.

In connection with certain business dispositions completed between 1995 and 1997, the Company continues to guarantee lease obligations for [removed: 67] [added: 63] former stores.

These guarantees generally remain in effect for the initial lease term and any extension thereof pursuant to a [added: renewal option provided for in the lease prior to the time of the disposition.]

For additional information on these guarantees, see “Lease Guarantees” in Note [removed: 16] [added: 18] ‘‘Commitments and Contingencies’’ included in Item 8 of this 10-K.

For additional information on the right-of-use assets and lease liabilities associated with the Company’s leases, see Note [removed: 6] [added: 7] ‘‘Leases’’ included in Item 8 of this 10-K.

The Health Services segment leases 204 primary care centers across 25 states, totaling approximately 1.9 million square feet.

The Health Services segment also owns or leases office space used for administration, sales and marketing, technology and development and professional services throughout the U.S. and in Ireland.

Pharmacy & Consumer Wellness Segment

- Branches for compounding, specialty infusion and enteral nutrition services throughout the U.S.

Retail/LTC Segment

renewal option provided for in the lease prior to the time of the disposition.

The following sets forth the name, age and biographical information for each of the Registrant’s executive officers as of February [removed: 8, 2023.][added: 7, 2024.]

Chaguturu, M.D*., age [removed: 44,] [added: 45,] Executive Vice President and Chief Medical Officer of CVS Health Corporation since May 2022; Chief Medical Officer of CVS Caremark from September 2019 through May 2022; Chief Population Health Officer at Mass General Brigham, a non-profit hospital formerly known as Partners HealthCare, from August 2017 through August 2019; Vice President, Population Health Management at Mass General Brigham from June 2014 through August 2017.

Clark*, age [removed: 58,] [added: 59,] Senior Vice President - Controller and Chief Accounting Officer of CVS Health Corporation since November 2018; Vice President - Finance and Accounting of CVS Pharmacy, Inc. from September 2009 through October 2018.

[removed: Finke*,] [added: Lynch*,] age [removed: 52, Executive Vice] [added: 61,] President [added: and Chief Executive Officer] of CVS Health Corporation [removed: and President of Health Care Benefits] since February 2021; Executive Vice [removed: President, Commercial Business and Markets] [added: President] of [removed: Aetna Inc.] [added: CVS Health Corporation] from [removed: February 2020] [added: November 2018] through January 2021; [removed: Executive Vice President, Consumer Health and Service] [added: President] of Aetna Inc. from [removed: June 2018] [added: January 2015] through January [removed: 2020; Senior Vice President, Network] [added: 2021;] and [removed: Clinical Services] [added: a director] of [removed: Aetna Inc. from January 2016 through May 2018.][added: CVS Health Corporation since February 2021.]

Havanec*, age [removed: 62,] [added: 63,] Executive Vice President and Chief People Officer of CVS Health Corporation since February 2021; Executive Vice President and Chief People Officer, Otis Worldwide Corporation, an elevator, escalator and moving walkway manufacturer, from October 2019 through January 2021; Corporate Vice President, Talent of United Technologies Corporation, a multinational manufacturing conglomerate, from April 2017 through October 2019; Vice President - Human Resources, Institution Businesses of Aetna Inc. from 2013 through March 2017.

David Joyner*, age [removed: 58,] [added: 59,] Executive Vice President of CVS Health Corporation and President of Pharmacy Services since January 2023; Strategic Business Advisor to gWell, Inc., a wellness technology company, since July 2021; Advisor to Podimetrics Inc., a health care company focused on the identification and treatment of diabetic foot ulcers since September 2020; Advisory Council to the Rawls College of Business of Texas Tech University since July 2020; Executive Vice President – Sales and Account Services, CVS Caremark for CVS Health Corporation from March 2011 through December 2019.

[removed: Lynch*,] [added: Shah*,] age [removed: 60,] [added: 44, Executive Vice] President and Chief [removed: Executive] [added: Pharmacy] Officer of CVS Health Corporation since [removed: February 2021; Executive Vice President of CVS Health Corporation from] November [removed: 2018 through January 2021; President] [added: 2021 and Co-President] of [removed: Aetna Inc. from January 2015 through] [added: Retail since] January [removed: 2021;] [added: 2022; Executive Vice President, Specialty] and [removed: a director of] [added: Product Innovation,] CVS [removed: Health Corporation since February 2021.][added: Caremark]

*Tilak Mandadi*, age [removed: 59,] [added: 60,] Executive Vice President and Chief Data, Digital and Technology Officer of CVS Health Corporation since July 2022; Chief Strategy Officer, MGM Resorts International from July 2021 through July 2022; Executive Vice President, Digital & Global Chief Technology Officer, Disney Parks, Experiences and Products from March 2013 through July 2021.

*Thomas [removed: M.][added: F.]

[removed: Moriarty*,] [added: Khichi*,] age [removed: 59,] [added: 56,] Executive Vice [removed: President] [added: President, Chief Policy Officer] and General Counsel of CVS Health Corporation since [removed: October 2012; Chief Policy and External] [added: February 2023; Executive Vice President, Corporate Development, Public Policy, Regulatory] Affairs [removed: Officer since March 2017; Chief Strategy Officer] [added: and General Counsel of Becton Dickinson Company (“BD”), a global medical technology company,] from [removed: March 2014] [added: December 2017] through February [added: 2023; and Senior Vice President, General Counsel and Secretary of C.R. Bard, a medical technology company that was acquired from BD, from July 2014 through December] 2017.

[removed: *Prem Shah*, age 43, Executive Vice President and Chief Pharmacy Officer of CVS Health Corporation since November 2021 and Co-President of Retail since January 2022; Executive Vice President, Specialty and Product Innovation, CVS Caremark] from August 2018 through November 2021; Vice President - Specialty Pharmacy, CVS Caremark from February 2013 through July 2018.

Cowhey*, age 51, Executive Vice President and Chief Financial Officer of CVS Health Corporation since January 2024; Interim Chief Financial Officer of CVS Health Corporation from October 2023 through January 2024; Senior Vice President, Corporate Finance of CVS Health Corporation from September 2023 through October 2023; Senior Vice President, Capital Markets of CVS Health Corporation from February 2022 through September 2023; and Executive Vice President and Chief Financial Officer of Surgical Partners, a large independent operator of short-stay surgical facilities, from April 2018 through February 2022.

*Brian A.

Kane*, age 51, Executive Vice President of CVS Health Corporation and President of Aetna since September 2023; Independent Strategic Advisor to private equity firms focused on health care services from June 2022 to September 2023; and Chief Financial Officer of Humana, Inc., a publicly traded health and well-being company, from June 2014 through May 2021.

*Samrat S.

*Prem S.

*Daniel P.

*Shawn M.

Guertin*, age 59, Executive Vice President and Chief Financial Officer of CVS Health Corporation since May 2021; Executive Vice President, Chief Financial Officer and Chief Enterprise Risk Officer of Aetna Inc. from February 2013 through May 2019; Senior Vice President, Finance of Aetna Inc. from April 2011 through January 2013.

*Michelle A.

Peluso*, age 50, Executive Vice President and Chief Customer Officer of CVS Health Corporation since January 2021 and Co-President of Retail since January 2022; Senior Vice President, Digital Sales and Chief Marketing Officer, IBM, a multinational technology corporation, from February 2016 through January 2021; Chief Executive Officer, Gilt Groupe, Inc., an online shopping destination, from 2013 through February 2016.

Ms. Peluso is also a member of the board of directors of Nike, Inc., an athletic footwear and clothing manufacturer.

During [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020,] [added: 2021,] the quarterly cash dividend was [removed: $0.55, $0.50] [added: $0.605, $0.55] and $0.50 per share, respectively.

In December [removed: 2022,] [added: 2023,] the Board authorized [removed: a 10%] [added: an] increase [added: of approximately 10%] in the quarterly cash dividend to [removed: $0.605] [added: $0.665] per share effective in [removed: 2023.][added: 2024.]

See Note [removed: 12] [added: 14] ‘‘Shareholders’ Equity’’ included in Item 8 of this 10-K for information regarding CVS Health Corporation’s dividends.

As of [removed: February 1, 2023,] [added: January 31, 2024,] there were [removed: 24,142] [added: 23,098] registered holders of the registrant’s common stock according to the records maintained by the registrant’s transfer agent.

| In billions Authorization Date | | | Authorized | | | | | | Remaining as of December 31, [removed: 2022] [added: 2023] | | |

| December 9, 2021 (“2021 Repurchase Program”) | | | 10.0 | | | | | | [removed: 6.5] [added: 4.5] | | |

During the [removed: year] [added: years] ended December 31, [added: 2023 and] 2022, the Company repurchased an aggregate of [added: 22.8 million shares of common stock for approximately $2.0 billion and an aggregate of] 34.1 million shares of common stock for approximately $3.5 [removed: billion] [added: billion, respectively, both] pursuant to the 2021 Repurchase [removed: Program, including share repurchases under the $1.5 billion fixed dollar ASR transaction described below.][added: Program.]

During the [removed: years] [added: year] ended December 31, [removed: 2021 and 2020,] [added: 2021,] the Company did not repurchase any shares of common stock.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $2.0 billion fixed dollar ASR with Citibank, N.A. [removed: (“Citibank”).][added: Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of]

[removed: Upon payment of the $2.0 billion purchase price on January 4, 2023, the Company received a number of] shares of CVS Health Corporation’s common stock equal to 80% of the $2.0 billion notional amount of the ASR or approximately 17.4 million shares at a price of $92.19 per share, which were placed into treasury stock in January 2023.

At the conclusion of the ASR, the Company may receive additional shares representing the remaining [removed: 20%] [added: 15%] of the [removed: $2.0] [added: $3.0] billion notional amount.

It is also possible, depending on such weighted average price, that the Company will have an obligation to [removed: Citibank] [added: Morgan Stanley] which, at the Company’s option, could be settled in additional cash or by issuing shares.

Under the terms of the ASR, the maximum number of shares that could be delivered to the Company is [removed: 43.4] [added: 73.9] million.

[added: The] ASR was accounted for as an initial treasury stock transaction for $1.2 billion and a forward contract for $0.3 billion.

See Note [removed: 12] [added: 14] ‘‘Shareholders’ Equity’’ included in Item 8 of this 10-K for additional information regarding the Company’s share repurchases.

The following graph compares the cumulative total shareholder return on CVS Health Corporation’s common stock (assuming reinvestment of dividends) with the cumulative total return on the S&P 500 Index, the S&P 500 Food and Staples Retailing Industry Group Index and the S&P 500 Healthcare Sector Group Index from December 31, [removed: 2017] [added: 2018] through December 31, [removed: 2022.][added: 2023.]

The graph assumes a $100 investment in shares of CVS Health Corporation’s common stock on December 31, [removed: 2017.][added: 2018.]

[removed: ][added: ]

| | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | |

| S&P 500 Food & Staples Retailing Group Index (2) | | | 100 | | | | | | [removed: 101] [added: 127] | | | | | | [removed: 129] [added: 148] | | | | | | [removed: 150] [added: 185] | | | | | | [removed: 187] [added: 166] | | | | | | [removed: 168] [added: 192] | | |

| S&P 500 Health Care Group Index (1) (3) | | | 100 | | | | | | [removed: 106] [added: 121] | | | | | | [removed: 129] [added: 137] | | | | | | [removed: 146] [added: 173] | | | | | | [removed: 184] [added: 170] | | | | | | [removed: 180] [added: 173] | | |

(2)Includes [removed: five] [added: eight] companies (COST, [added: DG, DLTR,] KR, SYY, [added: TGT,] WBA, WMT).

(3)Includes [removed: 63] [added: 64] companies.

This activity includes the share repurchases under the ASR transactions described below.

Pursuant to the authorization under the 2021 Repurchase Program, the Company entered into a $3.0 billion fixed dollar ASR with Morgan Stanley & Co. LLC (“Morgan Stanley”).

Upon payment of the $3.0 billion purchase price on January 4, 2024, the Company received a number of shares of CVS Health Corporation’s common stock equal to 85% of the $3.0 billion notional amount of the ASR or approximately 31.4 million shares at a price of $81.19 per share, which were placed into treasury stock in January 2024.

The ASR was accounted for as an initial treasury stock transaction for $1.6 billion and a forward contract for $0.4 billion.

In February 2023, the Company received approximately 5.4 million shares of CVS Health Corporation’s common stock, representing the remaining 20% of the $2.0 billion notional amount of the ASR, thereby concluding the ASR.

These shares were placed into treasury and the forward contract was reclassified from capital surplus to treasury stock in February 2023.

The forward contract was classified as an equity instrument and was recorded within capital surplus.

| CVS Health Corporation | | | $ | 100 | | | | | $ | 117 | | | | | $ | 111 | | | | | $ | 172 | | | | | $ | 159 | | | | | $ | 139 | |

| S&P 500 (1) | | | 100 | | | | | | 131 | | | | | | 156 | | | | | | 200 | | | | | | 164 | | | | | | 207 | | |

The

| CVS Health Corporation | | | $ | 100 | | | | | $ | 93 | | | | | $ | 109 | | | | | $ | 103 | | | | | $ | 160 | | | | | $ | 148 | |

| S&P 500 (1) | | | 100 | | | | | | 96 | | | | | | 126 | | | | | | 149 | | | | | | 191 | | | | | | 157 | | |

| [Consolidated Statements of Operations for the years ended December 31, [removed: 202](#i1ae8e8cf4da649e4afa2b073939999d2_103)[2](#i1ae8e8cf4da649e4afa2b073939999d2_103)[, 202](#i1ae8e8cf4da649e4afa2b073939999d2_103)[1](#i1ae8e8cf4da649e4afa2b073939999d2_103)] [added: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)] [and [removed: 20](#i1ae8e8cf4da649e4afa2b073939999d2_103)[20](#i1ae8e8cf4da649e4afa2b073939999d2_103)] [added: 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)] | | | [removed: [106](#i1ae8e8cf4da649e4afa2b073939999d2_103)] [added: [109](#i39a9ffb3d54a4bfdbacb5b3fe645889f_103)] | | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2022, 2021 and 2020](#i1ae8e8cf4da649e4afa2b073939999d2_106)] [added: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106) [and 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)] | | | [removed: [107](#i1ae8e8cf4da649e4afa2b073939999d2_106)] [added: [110](#i39a9ffb3d54a4bfdbacb5b3fe645889f_106)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 20](#i1ae8e8cf4da649e4afa2b073939999d2_109)[22](#i1ae8e8cf4da649e4afa2b073939999d2_109)] [added: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)] [and [removed: 202](#i1ae8e8cf4da649e4afa2b073939999d2_109)[1](#i1ae8e8cf4da649e4afa2b073939999d2_109)] [added: 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)] | | | [removed: [108](#i1ae8e8cf4da649e4afa2b073939999d2_109)] [added: [111](#i39a9ffb3d54a4bfdbacb5b3fe645889f_109)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 202](#i1ae8e8cf4da649e4afa2b073939999d2_112)[2](#i1ae8e8cf4da649e4afa2b073939999d2_112)[, 202](#i1ae8e8cf4da649e4afa2b073939999d2_112)[1](#i1ae8e8cf4da649e4afa2b073939999d2_112)] [added: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)] [and [removed: 20](#i1ae8e8cf4da649e4afa2b073939999d2_112)[20](#i1ae8e8cf4da649e4afa2b073939999d2_112)] [added: 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)] | | | [removed: [109](#i1ae8e8cf4da649e4afa2b073939999d2_112)] [added: [112](#i39a9ffb3d54a4bfdbacb5b3fe645889f_112)] | | |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 202](#i1ae8e8cf4da649e4afa2b073939999d2_115)[2](#i1ae8e8cf4da649e4afa2b073939999d2_115)[, 202](#i1ae8e8cf4da649e4afa2b073939999d2_115)[1](#i1ae8e8cf4da649e4afa2b073939999d2_115)] [added: 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[3](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[, 202](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[2](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)] [and [removed: 20](#i1ae8e8cf4da649e4afa2b073939999d2_115)[20](#i1ae8e8cf4da649e4afa2b073939999d2_115)] [added: 20](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)[21](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)] | | | [removed: [111](#i1ae8e8cf4da649e4afa2b073939999d2_115)] [added: [114](#i39a9ffb3d54a4bfdbacb5b3fe645889f_115)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i1ae8e8cf4da649e4afa2b073939999d2_118)] [added: Statements](#i39a9ffb3d54a4bfdbacb5b3fe645889f_118)] | | | [removed: [112](#i1ae8e8cf4da649e4afa2b073939999d2_118)] [added: [115](#i39a9ffb3d54a4bfdbacb5b3fe645889f_118)] | | |

| [Reports of Independent Registered Public Accounting [removed: Firm](#i1ae8e8cf4da649e4afa2b073939999d2_175)] [added: Firm](#i39a9ffb3d54a4bfdbacb5b3fe645889f_178)] (Public Company Accounting Oversight Board ID: 42) | | | [removed: [179](#i1ae8e8cf4da649e4afa2b073939999d2_175)] [added: [196](#i39a9ffb3d54a4bfdbacb5b3fe645889f_178)] | | |

[Index to Consolidated Financial [removed: Statements](#i1ae8e8cf4da649e4afa2b073939999d2_100)][added: Statements](#i39a9ffb3d54a4bfdbacb5b3fe645889f_100)]

| In millions, except per share amounts | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Products | | | $ | [removed: 226,616] [added: 245,138] | | | | | $ | [removed: 203,738] [added: 226,616] | | | | | $ | [removed: 190,688] [added: 203,738] | |

| Premiums | | | [removed: 85,330] [added: 99,192] | | | | | | [removed: 76,132] [added: 85,330] | | | | | | [removed: 69,364] [added: 76,132] | | |

| Services | | | [removed: 9,683] [added: 12,293] | | | | | | [removed: 11,042] [added: 9,683] | | | | | | [removed: 7,856] [added: 11,042] | | |

| Net investment income | | | [removed: 838] [added: 1,153] | | | | | | [removed: 1,199] [added: 838] | | | | | | [removed: 798] [added: 1,199] | | |

| Total revenues | | | [removed: 322,467] [added: 357,776] | | | | | | [removed: 292,111] [added: 322,467] | | | | | | [removed: 268,706] [added: 292,111] | | |

| Cost of products sold | | | [removed: 196,892] [added: 217,098] | | | | | | [removed: 175,803] [added: 196,892] | | | | | | [removed: 163,981] [added: 175,803] | | |

| Opioid litigation charges | | | [removed: 5,803] [added: —] | | | | | | [removed: —] [added: 5,803] | | | | | | — | | |

| Loss on assets held for sale | | | [removed: 2,533] [added: 349] | | | | | | [removed: —] [added: 2,533] | | | | | | — | | |

| Store impairments | | | — | | | | | | [removed: 1,358] [added: —] | | | | | | [removed: —] [added: 1,358] | | |

| Goodwill impairment | | | — | | | | | | [removed: 431] [added: —] | | | | | | [removed: —] [added: 431] | | |

| Operating expenses | | | [removed: 38,212] [added: 37,066] | | | | | | [removed: 37,066] [added: (45)] | | | | | | [removed: 35,135] [added: 37,021] | | |

| Total operating costs | | | 314,721 | | | | | | [removed: 278,918] [added: (208)] | | | | | | [removed: 254,795] [added: 314,513] | | |

| Operating income | | | 7,746 | | | | | | [removed: 13,193] [added: 208] | | | | | | [removed: 13,911] [added: 7,954] | | |

| Interest expense | | | [removed: 2,287] [added: 2,658] | | | | | | [removed: 2,503] [added: 2,287] | | | | | | [removed: 2,907] [added: 2,503] | | |

| Loss on early extinguishment of debt | | | — | | | | | | [removed: 452] [added: —] | | | | | | [removed: 1,440] [added: 452] | | |

| Other income | | | [removed: (169)] [added: (88)] | | | | | | [removed: (182)] [added: (169)] | | | | | | [removed: (206)] [added: (182)] | | |

| Income before income tax provision | | | 5,628 | | | | | | [removed: 10,420] [added: 208] | | | | | | [removed: 9,770] [added: 5,836] | | |

| Income tax provision | | | 1,463 | | | | | | [removed: 2,522] [added: 46] | | | | | | [removed: 2,569] [added: 1,509] | | |

| Net income | | | [removed: 4,165] [added: 7,898] | | | | | | [removed: 7,898] [added: 91] | | | | | | [removed: 7,192] [added: 7,989] | | |

| Net (income) loss attributable to noncontrolling interests | | | [removed: (16)] [added: (24)] | | | | | | [removed: 12] [added: (16)] | | | | | | [removed: (13)] [added: 12] | | |

| Net income attributable to CVS Health | | | [removed: $] [added: 7,910] | [removed: 4,149] | | | | | [removed: $] [added: 91] | [removed: 7,910] | | | | | [removed: $] [added: 8,001] | [removed: 7,179] | |

| [removed: Basic earnings] [added: Earnings] per share: | | | | | | | | | | | | | | | | | |

| Net income [added: per share] attributable to CVS [removed: Health] [added: Health:] | | | [removed: $] | [removed: 3.16] | | | | | [removed: $] | [removed: 6.00] | | | | | [removed: $] | [removed: 5.48] | |