CVS Health announced on Friday that CEO Karen Lynch has resigned after the company warned that its third-quarter earnings would once again fall short of expectations.
Lynch, who became CEO in 2021, is stepping down during a period of financial challenges. David Joyner, the current president of CVS Caremark, will take over as the new CEO.
According to CBS News, the company's stock plummeted by nearly 10% in pre-market trading, falling to $57.40. This drop comes after CVS had already experienced a 19% stock decrease earlier this year.
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CVS Faces Financial Struggles Amid Rising Medical Costs, Leadership Transition
CVS has been struggling with its financial performance, revising its outlook multiple times throughout the year. In August, the company announced its third earnings revision, attributing the issues to higher-than-expected medical costs, especially related to its Medicare Advantage plans.
David Joyner, who will also join the company's board, brings over 37 years of experience in health care and pharmacy benefit management. He previously led CVS Caremark, which manages pharmacy benefits for millions of members. The company has faced significant financial pressure, with rising medical claims from its Medicare Advantage coverage.
CVS has also dealt with challenges in its Medicaid programs across various states. The company operates one of the largest pharmacy chains in the country, as well as a pharmacy benefits division that provides prescription drug coverage to employers and insurers. Additionally, its Aetna insurance segment covers nearly 27 million people.
Chairman Roger Farah, who will assume the role of executive chairman, praised Joyner's deep understanding of the company and expressed confidence that he would guide CVS through the industry's ongoing challenges. CVS will report its official third-quarter results on November 6, AP News reported.
