CVS Health CEO Lynch steps down as national chain struggles to right its path
CVS Health CEO Karen Lynch has stepped down and is being replaced by David Joyner as the health care giant continues to struggle with rising costs
CVS Health CEO Karen Lynch has stepped down with company shares sinking 19% this year and the health care giant struggling on several fronts.
Company shares tumbled early Friday after CVS Health also said its third-quarter earnings will come in well below Wall Street expectations.
Lynch will be replaced by CVS executive David Joyner, who will attempt to steer the company through rising costs to its health insurance business, slumping drugstore sales and growing investor pressure. All major pharmacy chains are attempting to navigate a drastically changed landscape, facing competition online and elsewhere.
Leerink Partners analyst Michael Cherny said the leadership change was unexpected, though he understood the rationale behind it “following another quarter of underperformance.”
“It is hard, given the operational and stock underperformance, to say a change at the top is undeserved,” he said in a research note.
CVS cut its financial expectations for a third time this year in August, hurt by growing claims from its Medicare Advantage coverage, and Lynch had just taken over leadership of the insurance segment, which is where she served before becoming CEO.
Her predecessor in the insurance wing, Brian Kane, left the company about a year after his arrival.
CVS Health runs one of the nation's largest drugstore chains and a huge pharmacy benefit management business that operates prescription drug coverage for employers, insurers and other big clients. It also covers nearly 27 million people through its Aetna insurance arm.
The company has been operating “well below its potential
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