CVS Health CEO Karen Lynch will be replaced by Caremark PBM CEO David Joyner

CVS Health announced Friday that Chief Executive Officer Karen Lynch has resigned as the company's top executive and will be replaced by David Joyner, who previously ran the company's pharmacy benefits business Caremark.

The news comes at a time when CVS Health is struggling to control healthcare costs in its health insurance business and its retail pharmacies have struggled, contributing to the company's declining stock price.

CVS said Lynch, 62, resigned from her position “in consultation with the company's board of directors.” CVS also said Joyner has joined the company's board and current CEO Roger Farah will now be executive chairman.

Joyner, 60, who was executive vice president of CVS Health and president of CVS Caremark, “led the pharmacy services business, which provides solutions to employers, health plans and government agencies and serves approximately 90 million members through Caremark, CVS Specialty. and other areas.”

The move comes just two months after Lynch took over “day-to-day management” of Aetna's health insurance business following the company's recent poor performance. Lynch, who successfully led Aetna for several years before being promoted to president and CEO of CVS in 2021, began leading the nation's third-largest health insurer in August alongside Tom Cowhey, CVS Health's chief financial officer. That's when CVS left Brian Kane, who was hired last year as executive vice president and president at Aetna after previously serving as an adviser to private equity firms focused on health care services and previously serving as chief financial officer of health insurer Humana.

Before becoming CEO of CVS Health, Lynch was executive vice president and president of Aetna, which was acquired by CVS in 2018 for nearly $70 billion, merging one of the largest drugstore chains and pharmacy benefits operators with one of the largest health insurers in the country.

Commenting on the CEO transition, CVS Chairman Farah said the company's board “believes this is the right time for 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.”

According to CVS, Joyner, who began his career at Aetna as an employee benefits representative before moving to Caremark Prescription Services as a regional sales manager, has 37 years of “experience in health care and pharmacy benefits management and has also served on the boards of several private equity companies. “Companies.”-supported healthcare companies.”

“There is no greater honor than leading a company whose mission and purpose are entirely focused on improving health,” Joyner said in a statement.

“I returned to CVS Health in 2023 because I believed I could give more to the company, and I am pursuing this opportunity today for the same reason,” Joyner said. “I am proud to continue to work alongside our 300,000 colleagues. Every day, CVS Health expands access, increases affordability and achieves better health outcomes for more than 186 million people. I believe in the future of our company and I am committed to doing our best every day for everyone we serve.”

Under Lynch, CVS spent more than $20 billion last year acquiring senior primary care centers through the acquisition of Oak Street Health and a home care company, Signify Health.

Farah praised Joyner's “deep understanding of our integrated business, which can help us more directly address the challenges facing our industry, accelerate the operational improvements our business requires, and leverage the value we can uniquely create.” to make full use of it.”

Along with the leadership change announcement, CVS said the company “continued to experience medical cost trends beyond those projected in its previous guidance.”

CVS, which is scheduled to report third-quarter earnings next month, provided preliminary guidance for the third quarter of 2024: “GAAP diluted earnings per share of $0.03 to $0.08 and adjusted earnings per share of $1, $05 to $1.10.”

“The third quarter results include charges to record premium deficiency reserves (PDRs), primarily related to the Company's Medicare and Individual Exchange businesses within its Health Care Benefits segment, of approximately $1, $1 billion, which reduced adjusted earnings per share by $0.63 in the third quarter of 2024,” the company said. “The PDRs are expected to be released substantially in the fourth quarter of 2024, accretive to results in that period. The Company's GAAP results also include approximately $1.2 billion in restructuring charges related to phased store closures in 2025, as well as cost reduction measures discussed on the second quarter 2024 earnings call.”