Karen Lynch Steps Down as CEO of CVS Health

David Joyner has been appointed president and CEO of CVS Health, effective Oct. 17, 2024. He replaces Karen Lynch, who has been CEO of the company since February 2021.

Karen Lynch

In a letter to employees, Lynch said “I am confident that CVS Health will continue to thrive and lead the way in healthcare. The talent, passion, and resilience within this organization are unparalleled, and I have no doubt that you will continue to drive positive change for the people and communities that depend on you.”

Executive chairman of the board, Roger Farah, said in a news release that this is a good time to make a change. "We are confident that David is the right person to lead our company for the benefit of all stakeholders, including customers, employees, patients, and shareholders,” he said.

The announcement of the change in leadership was made ahead of the company’s third quarter earnings call, which is scheduled for Nov. 6, 2024. But the company has faced increased medical cost trend in its Medicare/Medicaid health plans and lowered revenue in its pharmacy benefit business.

In the second quarter of this year, within the Healthcare Benefit business — which includes Aetna and provides insurance to the commercial market, Medicare/Medicaid beneficiaries and individual exchange plans — medical cost trend increased, and the company warned it may have to increase medical reserves.

Additionally, revenue within CVS’s Health Services segment — which includes the PBM CVS Caremark — was down in the second quarter, which company executives had said was the result of losing the PBM business of Tyson Foods.

As a result, CVS Health lowered its outlook for the full year 2024. The company has revised its adjusted earnings per share guidance to a range of $6.40 to $6.65 from at least $7.00.

At the second quarter earnings call, it was announced that Aetna president Brian Kane had left the company after less than a year at CVS Health, and Lynch at the time said she would assume direct leadership of the healthcare business. There has been no word on who is now leading Aetna.

Related: CVS Health’s Mixed 2nd Quarter Earnings

In the announcement about Lynch leaving the company, CVS Health said that in the third quarter of 2024, the company has continued to experience medical cost trends in excess of those projected. It warned investors to no longer rely on the company’s previous guidance.

David Joyner

Results for the third quarter include charges to record premium deficiency reserves, primarily related to the company’s Medicare and Individual Exchange businesses inside its health care benefits segment, of about $1.1 billion. This has lowered the third quarter 2024 adjusted earnings per share (EPS) by $0.63.

Joyner was most recently executive vice president, CVS Health, and president, CVS Caremark. He led the pharmacy services business. He has 37 years of healthcare and pharmacy benefit management experience, and has also served on the boards of several private equity-backed health care companies. He began his career at Aetna as an employee benefit representative.