CVS Health tapped industry executive David Joyner to replace CEO Karen Lynch and turn around the struggling business.
Joyner — who has 37 years of health care and pharmacy benefit management experience — took over on Thursday as Lynch stepped down from her position in agreement with the company’s board of directors, CVS said.
Joyner previously served as executive vice president of CVS Health, and president of CVS Caremark, where he led the pharmacy services business.
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CVS Board Chairman Roger Farah will become executive chairman.
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“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,” Farah said in a statement.
Despite the company’s hardships, Farah commended Lynch, who became CEO in 2021, for her “consistent, customer-focused leadership, especially during the COVID-19 pandemic” and her efforts to turn CVS Health into a technology-driven health care company.
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The leadership transition comes shortly after CVS Health cut its 2024 earnings outlook in August and announced its goal to cut $2 billion in costs through a multiyear productivity initiative as medical costs continue to rise.
The company is in the midst of finalizing a three-year plan to close 900 stores and recently cut 2,900 out of its more than 300,000 corporate jobs as part of its cost-cutting plan. That equates to about 1% of the company’s workforce.
The company told FOX Business in August that the “industry faces continued disruption, regulatory pressures, and evolving consumer needs and expectations, so it is critical that we remain competitive and operate at peak performance.”
Over the past year, the company’s shares have slipped around 20%.
On Friday, CVS said it has experienced higher medical costs than it expected during the third quarter and warned that “investors should no longer rely on the Company’s previous guidance provided on its second-quarter 2024 earnings call.”
The company is now expecting adjusted earnings of between $1.05 and $1.10 per share in its third quarter.
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