CVS names new CEO in the wake of layoffs and poor stock performance

America’s largest drug store chain named a new chief executive officer on Friday, with longtime CVS Health executive David Joyner replacing Karen Lynch.

America’s largest drug store chain named a new chief executive officer on Friday, with longtime CVS Health executive David Joyner replacing Karen Lynch. CVS also withdrew its 2024 profit forecast and advised investors against relying on the full-year guidance provided in August, citing higher medical cost pressures. Stock prices have dropped nearly 20% this year and fell sharply following the announcement. The shakeup comes after a particularly challenging year for the company, marked by plummeting shares, sluggish growth and pressure from investors, among a litany of other woes. In August, rising costs at CVS’ insurance arm Aetna cut into profits, leading to the ousting of then-president Brian Kane. In September, the Federal Trade Commission took aim at big pharmacy benefits managers, including CVS subsidiary Caremark, accusing them of inflating insulin prices. “We are not surprised by the management change given the execution shortfalls at CVS, especially at the Aetna medical insurer that Lynch previously led,” Julie Utterback, senior equity analyst at Morningstar, said in a note. “However, investors may have been hoping for new blood from outside the organization.” Lower reimbursement rates for prescription drugs have hit retail pharmacies, including Walgreens and Rite-Aid, resulting in flagging profits and forcing drug stores to shutter locations and cut jobs.