All Access

Pro Rata Premium

Axios Pro Rata Premium

Standard

Axios Pro Rata: Non-Premium Subscribers

Other

CVS breakup: It's complicated

Illustration of a dollar sign and asterisk on a prescription bottle magnified by a magnifying glass.

AI reality check

Illustration of a person in a lab coat shielding herself with an umbrella from binary code rain

Big Tech's biotech appetite

Luca Giani, senior principal at Alumni Ventures


Another medical servicing deal

Illustrataion of a doctor holding an MRI scan of a one hundred dollar bill.

Driving the day

Final word

CVS Health's planned breakup preserves much of the vertical integration that's drawn political and regulatory scrutiny from Democrats who are about to control Congress.

Particularly the Caremark pharmacy benefit manager operations.

Catch up quick: CVS' restructuring would keep its PBM, specialty pharmacy, health insurance and provider businesses under one roof, while spinning off its retail pharmacy assets. 

The separation won't sever all ties, as CVS Pharmacy and Caremark plan to preserve existing products and business relationships through commercial agreements.

The big picture: Arkansas and Tennessee have passed laws restricting PBM ownership of pharmacies. Sens. Elizabeth Warren (D-Mass.) and Josh Hawley (R-Mo.) have proposed federal legislation to do the same.

Warren tweeted: "This CEO is not fooling us — this lets CVS continue to own a massive conglomerate and rip people off."

Between the lines: Keeping specialty pharmacy alongside Caremark preserves a lucrative business relationship — and one that's drawn scrutiny from regulators.

Specialty drugs accounted for 53% of U.S. prescription drug spending in 2025, per the American Journal of Health-System Pharmacy.

Pharmacies affiliated with the three largest PBMs generated more than $7.3 billion in dispensing revenue above estimated drug acquisition costs on certain specialty generics from 2017 to 2022, per an FTC investigation.

The bottom line: Separating PBMs from retail pharmacies fails to address the underlying economic incentives, says Pramod John, CEO of PBM Vivio.

"It's a lot of theater where people say, 'Wow, a sigh of relief! What a change!'" John says. "It made no difference at all. The risk to the economy is the same."

American Journal of Health-System Pharmacy

1. CVS breakup: It's complicated

Private equity firms can't afford to ignore AI, but insiders doubt its ability to take over key, relationship-based roles in dealmaking, participants at a PitchBook dinner said yesterday.

Why it matters: While AI's potential is increasingly clear, compliance concerns and cultural resistance remain barriers to adoption across the industry.

Context: Over the summer, the Wall Street Journal reported CVC had replaced bankers with AI to shop Greek e-commerce business Skroutz.

It sold to Blackstone for about $747 million including debt.

Inside the room: I asked the room of about 20 private equity investors and financial services insiders: Can you imagine an AI CEO in a PE-backed business in the future? What about an AI banker? Consultant? 

The AI CEO question got no hands. The consultant question got the most with three.

Zoom in: To be effective, AI systems demand access to vast amounts of interconnected data — raising the risk of data leaks and the hackles of compliance teams.

Older generation firm leaders accustomed to using Powerpoint to spread deal information, meanwhile, aren't as keen on the new tools.

Yes, but: AI is helping compile deal documents, summaries, and calculate valuations at a speed previously not possible. It's helped with sourcing and portfolio management, too.

Zoom out: Software investors say AI has yet to dent portfolio companies' revenue. Customers may be experimenting with AI, but they aren't abandoning existing services.

Instead, fears about AI's impact five to 10 years from now are weighing broadly on software valuations.

The bottom line: For investors, timing matters as much as the technology's potential.

2. AI reality check

Illustration: Sarah Grillo/Axios. Stock: Getty Images

Big AI's appetite for proprietary biological data may give biotechs new sources of revenue and financing, says Alumni Ventures senior principal Luca Giani.

His firm's portfolio includes Kanvas Biosciences, Iambic and ParcelBio.

This interview has been lightly edited for length and clarity.

Axios Pro: How do you see AI being most useful in drug development?

Giani: "AI will help us build better molecules, optimize these molecules, and especially flag some safety issues earlier.

It will help us choose indications and patient groups. Help us model which dose and which endpoints we should focus on, and organize our FDA packets."

What are the upsides to companies like Anthropic entering AI drug discovery?

"These large language model companies are after data to train their models better. And so many of the biotech companies that are around could become suppliers of data in non-exclusive ways and create new sources of revenue."

Why is oncology a therapeutic area ripe for AI applications?

"Because we just have a large quantity of data. Oncology has been one of the areas where we have invested the most historically. More clinical trials have been run. More animal models have been created."

3. Big Tech's biotech appetite

Photo illustration: Axios Visuals. Photo: Alumni Ventures

Peak Rock Capital has hired Harris Williams to sell imaging servicing company 626, Axios Pro confirmed.

The big picture: It's the latest entrant in an active deal market for medical equipment servicing — an unsexy but largely AI-resistant sector.

Bertram Capital is buying Medical Technology Associates for up to 20x EBITDA, as we reported yesterday.

Inside the room: 626 has conducted fireside chats with prospective buyers and plans to formally launch its auction early next year, one source says.

626 wants to comp to Leonard Green's acquisition of Radon Medical Imaging from Fifth Century Partners, the source adds.

Zoom in: 626 provides maintenance and repair services for MRI, CT, X-ray and ultrasound machines across multiple manufacturers.

It also supplies replacement parts and specialized services for MRI cooling systems. Peak Rock acquired 626 in 2022 and has since backed at least three add-ons.

Zoom out: Medical equipment servicing offers investors a hedge against AI disruption, as hands-on maintenance and repairs remain difficult to automate.

Peak Rock and Harris Williams did not respond to a request for comment. 

4. Another medical servicing deal

Union Pacific released its CEO's controversial remarks.

AI stocks plunge as investors reconsider the infrastructure boom.

Public market weakness could sober up startup investors.

SpaceX's wireless ambitions raise questions about Musk's strategy.

Strong jobs data complicates the Fed's next interest rate decision.

5. Driving the day

Animated illustration of the words DRIVING THE DAY moving onto a background with speed lines.

"When is a perceived joke not an actual joke? When the threat is all too real."

— Robert Primus, former Surface Transportation Board member, on Union Pacific CEO Jim Vena's rate-hike remarks to shippers

November 06, 2026

1. CVS breakup: It's complicated