From CNBC: 2024-10-18 16:02:49

Longtime CVS Health executive David Joyner has been appointed CEO as CVS struggles with lower profits and stock performance. CVS shares dropped 20% this year, closing 5% lower on Friday.

CVS has faced challenges with higher medical costs affecting Aetna and a retail business pressured by softer consumer spending. It slashed full-year profit guidance and plans to cut $2 billion in costs.

The company expects adjusted earnings between $1.05 and $1.10 per share for the third quarter, but anticipates higher medical costs than previously estimated. CVS will report third-quarter earnings on Nov. 6.

Major shareholder Glenview Capital began pushing for changes at CVS last month. It supports CEO Karen Lynch’s departure and calls for CVS to refresh its board of directors.

CVS’ board had previously considered a breakup of its insurance and retail businesses but will now move forward intact. Joyner previously oversaw Caremark, a major pharmacy benefits manager, and has returned to CVS to address industry challenges.

As CEO, Joyner will need to address increased scrutiny of PBMs by the Biden administration and lawmakers. He also has to navigate higher medical costs from Medicare Advantage patients and work towards margin improvements in the business.

CVS expects elevated medical costs in the third quarter and a higher medical benefit ratio compared to the year-earlier period. The company is focused on achieving margin improvements in its Medicare Advantage business next year.



Read more at CNBC: CVS replaces CEO Karen Lynch with exec David Joyner