Karen Lynch out as CEO of CVS, replacement named
A veteran CVS Health executive has taken the reins of the pharmacy and health care services giant.
David Joyner has been named president and CEO of CVS, effective Oct. 17. He replaces Karen Lynch, who left the company “in agreement with” the company’s board. CVS also lowered its third-quarter earnings guidance citing "elevated medical cost pressures" and withdrew its 2024 profit forecast
The change in leadership come as CVS is looking to turnaround its business amid rising medical costs, which are taking a toll on its Aetna insurance unit, reimbursement challenges and softer consumer spending. The company is also dealing with rising pressure from activist investors who are pressing for changes. Earlier this month, CNBC reported that the CVS board had engaged advisors to conduct a strategic review of its business, with one the options being considered a break-up of the company’s retail pharmacy and insurance businesses.
[READ MORE: CVS posts mixed Q2, to cut $2B in costs]
In other changes, current chairman of the CVS board, Roger Farah, will now be executive chairman.
Joyner has 37 years of health care and pharmacy benefit management experience. He has also served on the boards of several private equity-backed health care companies.
Joyner was most recently executive VP, CVS Health, and president, CVS Caremark, leading the pharmacy services business, which provides solutions to employers, health plans and government entities and serves approximately 90 million members through Caremark, CVS Specialty and other areas. He retired from CVS in 2019 before returning to helm Caremark at the beginning of last year.
“I came back to CVS Health in 2023 because I believed I could give more to the company, and I take this opportunity today for the same reason,” Joyner said.
He began his career at Aetna, which CVS acquired in 2018, as an employee benefit representative before joining Caremark Prescription Services as a regional sales manager. He then served as executive VP of sales and account services at CVS Caremark and executive VP of sales and marketing at CVS Health.
“The board believes this is the right time to make a change, and we are confident that David is the right person to lead our company for the benefit of all stakeholders, including customers, employees, patients and shareholders,” said Farah. “To build on our position of strength, we believe David and his deep understanding of our integrated business can help us more directly address the challenges our industry faces, more rapidly advance the operational improvements our company requires, and fully realize the value we can uniquely create.”
Lynch took over as CEO of CVS in February 2021 after serving as executive VP, CVS Health and president, Aetna. With her appointment, CVS was the largest company by revenue to be run by a female CEO.
“The board also recognizes the many contributions Karen made to our company, both during her tenure at Aetna and then as president and CEO of CVS Health,” Farah stated. “We are grateful for her consistent, customer-focused leadership, especially during the COVID-19 pandemic when our pharmacies provided needed tests and vaccines. We also appreciate her work to advance CVS Health’s modernization and transformation to become a diversified, connected, technology-driven health care company.”
CVS offered guidance for adjusted third-quarter per-share earnings of $1.05 to $1.10, which was significantly below the Street estimate.
“In light of continued elevated medical cost pressures in the Health Care Benefits segment, investors should no longer rely on the company’s previous guidance provided on its second quarter 2024 earnings call on August 7, 2024,” CVS said in a release that also announced the new CEO.
