CVS Health CEO Karen Lynch Replaced By Caremark PBM Exec David Joyner

CVS Health Chief Executive Officer Karen Lynch has stepped down arsenic nan apical executive and will beryllium replaced by David Joyner, who has been successful complaint of nan company’s Caremark drugstore use firm, CVS Health said connected Friday.

The news comes arsenic CVS Health has struggled to power costs successful its wellness security businesses and its unit pharmacies person struggled, contributing to nan company’s sagging stock price.

CVS said Lynch, who is 62 years old, “stepped down from her position successful statement pinch nan company's committee of directors.” CVS besides said Joyner joined nan company’s committee of directors, and existent committee chairman, Roger Farah, 71, a erstwhile executive astatine jewelry retailer Tiffany and luxury manner institution Ralph Lauren, will now beryllium executive chairman.

Joyner, 60, who has been executive vice president of CVS Health, and president of CVS Caremark, “led nan drugstore services business, which provides solutions to employers, wellness plans and authorities entities and serves astir 90 cardinal members done Caremark, CVS Specialty, and different areas.”

The move comes conscionable 2 months aft Lynch took complete “day-to-day management” of nan company’s Aetna wellness security business aft its latest mediocre performance. Lynch, who successfully ran Aetna for respective years earlier she was promoted to go CVS president and main executive successful 2021, began successful August to oversee nan nation’s third-largest wellness insurer pinch CVS Health main financial serviceman Tom Cowhey. Leaving CVS astatine that clip was Brian Kane, who was hired past twelvemonth arsenic executive vice president and president astatine Aetna pursuing a stint consulting to backstage equity firms focused connected healthcare services. Before that, he was wellness insurer Humana’s main financial officer.

Prior to becoming CVS Health’s CEO, Lynch was executive vice president and president of Aetna, which was acquired by CVS for astir $70 cardinal successful 2018, merging 1 of nan nation’s largest drugstore chains and drugstore use operators pinch 1 of nan country’s largest wellness insurers.

In making nan CEO change, CVS committee chair Farah said nan company’s committee “believes this is nan correct clip to make a change, and we are assured that David is nan correct personification to lead our institution for nan use of each stakeholders, including customers, employees, patients, and shareholders.”

CVS said Joyner, who began his profession astatine Aetna arsenic an worker use typical earlier joining Caremark Prescription Services arsenic a location income manager, has 37 years of “health attraction and drugstore use guidance experience, and has besides served connected nan boards of respective backstage equity-backed wellness attraction companies.”

"There is nary greater grant than to lead a institution whose ngo and intent are wholly focused connected improving health," Joyner said successful a statement.

"I came backmost to CVS Health successful 2023 because I believed I could springiness much to nan company, and I return this opportunity coming for nan aforesaid reason,” Joyner said. “I americium proud to proceed moving broadside by broadside pinch our 300,000 colleagues who are building a world of wellness astir each consumer. Every day, CVS Health expands access, drives greater affordability, and achieves amended wellness outcomes for much than 186 cardinal people. Aligned pinch our guidance squad and our Board, I judge successful nan early of our institution and I americium committed to delivering our champion each time to everyone we serve."

Under Lynch, CVS spent much than $20 cardinal past twelvemonth acquiring elder superior attraction centers via its acquisition of Oak Street Health and a homecare company, Signify Health.

Farah said Joyner’s “deep knowing of our integrated business tin thief america much straight reside nan challenges our manufacture faces, much quickly beforehand nan operational improvements our institution requires, and afloat recognize nan worth we tin uniquely create."

Along pinch nan announcement astir nan executive change, CVS said nan institution has “continued to acquisition aesculapian costs trends successful excess of those projected successful its anterior outlook.”

CVS, which is scheduled to study third-quarter net adjacent month, provided preliminary guidance for 3rd 4th 2024 “GAAP diluted EPS of $0.03 to $0.08 and Adjusted EPS of $1.05 to $1.10.”

“Results for nan 3rd 4th see charges to grounds premium deficiency reserves (PDRs), chiefly related to nan company's Medicare and Individual Exchange businesses wrong its Health Care Benefits segment, of astir $1.1 billion, which lowered 3rd 4th 2024 Adjusted EPS by $0.63,” the institution said. “The PDRs are expected to beryllium substantially released during nan 4th fourth of 2024, benefiting results successful that period. The Company's GAAP results besides see a restructuring complaint of astir $1.2 billion, related to incremental shop closures successful 2025, arsenic good arsenic costs simplification actions discussed connected nan 2nd 4th 2024 net call.”