It’s a tumultuous time at industry giant CVS Health, and on Friday the company revealed a shake-up at the top that now has David Joyner stepping in as CEO.
(CVS Health)
Joyner, who served most recently as president of CVS Caremark, the company’s pharmacy benefit management division, took the CEO role as of Oct. 17. He succeeds Karen Lynch, who “stepped down from her position in agreement with the company’s Board of Directors,” according to an announcement.
Joyner will also join CVS’ board of directors, the company said. In addition, Roger Farah, the chair of the board, will become CVS’ executive chairman.
Shares in CVS Health trended down pre-market following the announcement.
Joyner brings nearly four decades of industry experience to the CEO role, CVS said, including leadership experience at Aetna and other segments of CVS. He has also been on the boards of multiple private-equity backed firms.
Farah said in the press release that the board “believes this is the right time to make a change.”
“CVS Health is responsible for improving health for millions of people across the U.S., and our integrated businesses work together to deliver on our purpose and mission every day,” he said. “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.”
CVS has faced significant financial headwinds over the past several quarters, particularly at its Aetna unit. It revealed in August that it would begin a multi-year initiative to cut $2 billion in costs. Lynch also took over direct control of Aetna and President Brian Kane was ousted.
It later faced pressure from activist investor Glenview Capital and reportedly was weighing all options to improve its financial fortunes — including a potential breakup that would unwind its $69 billion acquisition of Aetna after less than a decade.
In the press release, Farah acknowledged Lynch’s role at the helm of the company during the COVID-19 pandemic and the rollout of vaccinations, as well as her role in pushing CVS forward. Lynch was one of the most powerful female CEOs in the world as the chief of CVS.
“We are grateful for her consistent, customer-focused leadership, especially during the COVID-19 pandemic when our pharmacies provided needed tests and vaccines,” Farah said. “We also appreciate her work to advance CVS Health’s modernization and transformation to become a diversified, connected, technology-driven healthcare company, allowing us to do even more for the people we are privileged to serve.”
Alongside the CEO shake-up, CVS revealed some preliminary financial information for the third quarter, and it’s bracing for medical costs to soar. It projects that its medical loss ratio in Q3 will be 95.2% due to depleted reserves to cover costs in Medicare and the individual market.
Given these expenses, CVS said that Wall Street “should no longer rely on the Company’s previous guidance” released as part of its Q2 results. It will offer further detail on its third-quarter performance on Nov. 6 when it releases its full report.
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