CVS Health CEO Karen Lynch has resigned as the company's shares have fallen by 19% this year, while the national drugstore chain faces significant challenges.
David Joyner will replace Lynch as CEO, tasked with navigating the health care giant through rising medical costs. In August, CVS cut its financial outlook for the third time, as all major pharmacy chains contend with increased competition from online sources and other competitors.
Joyner, who will also join the board, most recently served as Executive Vice President of CVS Health and President of CVS Caremark, overseeing pharmacy services for employers, health plans, and government entities. With 37 years of experience in healthcare and pharmacy benefit management, Joyner is well-versed in the company’s operations, serving approximately 90 million members.
Additionally, CVS Health announced that Chairman Roger Farah will become Executive Chairman. Farah expressed confidence in Joyner’s ability to address industry challenges, enhance operational efficiency, and unlock CVS Health's full potential.
The Woonsocket, Rhode Island-based company is forecasting third-quarter adjusted earnings between $1.05 and $1.10 per share, citing rising medical costs. Analysts expect earnings of $1.69 per share.
Back in August, CVS Health also restructured leadership in its health insurance division to address escalating costs. At that time, Lynch took over the insurance segment, replacing Executive Vice President Brian Kane, who left the company after one year.
CVS has struggled this year due to increasing claims from Medicare Advantage plans, which cover individuals 65 and older. Declining quality ratings for these plans and pressure from Medicaid programs in several states have also contributed to the company's financial difficulties.
As of Friday morning, CVS Health's stock had dropped nearly 13%.
