CVS Health has announced that longtime executive David Joyner has replaced Karen Lynch as CEO, as the company grapples with challenges driving higher profits and stock performance. CVS shares have fallen nearly 20% this year, prompting the move. The company has faced difficulties due to higher medical costs impacting its insurance unit, Aetna, and a drop in consumer spending at its retail pharmacies. In August, CVS slashed its full-year profit guidance and announced plans to cut $2 billion in costs over the next several years. The company also expects adjusted earnings of between $1.05 and $1.10 per share in the third quarter, citing higher medical costs than previously anticipated.
Major CVS shareholder Glenview Capital has pushed for changes at the company, leading the board to engage strategic advisors to explore options, including potentially breaking up its insurance and retail businesses. Joyner, who previously oversaw the pharmacy services business as president of CVS Caremark, has been appointed as CEO. Lynch has stepped down from the board of directors, with Joyner taking a seat and Chairman Roger Farah assuming the role of executive chairman.
The company is set to report third-quarter earnings on Nov. 6, as it navigates ongoing challenges in the industry. Farah expressed confidence in Joyner’s ability to address these challenges and drive operational improvements. Joyner’s extensive experience in the integrated business of CVS Health, along with his background in pharmacy benefit services at Aetna, positions him well to lead the company in its efforts to create value and overcome industry challenges.
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