CVS Health CEO Karen Lynch has stepped down with company shares down 19% this year and the national drugstore chain struggling.
Lynch will be replaced by David Joyner, who will attempt to steer the health care giant through a worsening environment of rising medical costs.
CVS cut its financial expectations for the third time in August with all major pharmacy chains attempting to navigate a drastically changed landscape, facing competition online and elsewhere.
Joyner, who will also join the company's board, most recently served as executive vice president of CVS Health, and president of CVS Caremark. He led the pharmacy services business, which provides solutions to employers, health plans and government entities and serves approximately 90 million members through Caremark, CVS Specialty, and other areas. Joyner has 37 years of health care and pharmacy benefit management experience.
CVS Health also announced on Friday that Chairman Roger Farah will now be executive chairman.
"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.
The Woonsocket, Rhode Island company's preliminary forecast is for third-quarter adjusted earnings of $1.05 to $1.10 per share, citing higher-than-expected medical cost trends. Analysts polled by FactSet predict earnings of $1.69 per share.
Back in August CVS Health changed the leadership of its health insurance business as it continued to deal with escalating costs. At the time, the company named Lynch to lead its insurance segment, replacing Executive Vice President Brian Kane, who is left the company about a year after arriving.
Rising claims from the company’s Medicare Advantage coverage have hurt CVS Health for much of this year and contributed to repeated trimmings of its outlook for 2024. Medicare Advantage plans are privately run versions of the federal government’s coverage program mainly for people age 65 and older.
CVS Health also said in August that it has been hurt by a drop in quality ratings for those plans and pressure from Medicaid coverage it manages in several states.
CVS Health's stock is down nearly 13% before the market open on Friday.