CVS Ousts CEO, Names Caremark Head as New Chief

But they came just as the Biden administration tightened payments to Medicare insurers and curbed tactics they used to boost revenue. The company also lost a huge contract to provide pharmacy benefits for insurer Centene Corp., which awarded the business to Cigna Group.

The Caremark pharmacy benefits management business that Joyner led is under scrutiny from the Federal Trade Commission, which alleged CVS and its rivals drove up insulin prices.

Congress is weighing new restrictions on PBM practices that could get a vote after the election. Joyner defended the business in front of a congressional panel earlier this year.

Biggest Troubles

The company’s biggest troubles are in the health benefits segment. CVS rapidly grew its Medicare Advantage rolls in 2024 with enticing benefits, but expenses for their care far outpaced projections and it’s poised to lose members next year.

Runaway costs in the health benefits business prompted CVS to pull its forecast, already lowered multiple times this year.

Almost two years ago, CVS told investors to expect adjusted earnings to be $9.75 to $9.95 a share in 2024. That company dropped that target over and over again, most recently to a range of $6.40 to $6.55 a share in August, an estimate CVS now says should no longer be relied on.

Analysts were already planning for 2024 earnings-per-share to drop by 25% from last year, according to a Bloomberg survey, estimates that will likely have to drop further.

Executive Turnover

The turmoil at CVS has been marked by departures among top executives. Brian Kane, the former chief financial officer of Humana Inc., joined to lead Aetna in 2023 but was ousted after less than a year. A president of health-care delivery hired from UnitedHealth returned to that company six months later.

The decision to replace Lynch with Joyner was made unanimously by the board, CVS said. A first-time CEO at one of the country’s best-known companies, Joyner will face a challenging turnaround.

He began his career at Aetna as an employee benefit representative. After three years away from the company, he returned to lead the pharmacy services business in 2023 and was most recently executive vice president of CVS Health and president of CVS Caremark.

“David and his deep understanding of our integrated business can help us more directly address the challenges our industry faces,” said Roger Farah, who was named executive chairman as part of the move.

(Photo: David Paul Morris/Bloomberg)

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