CVS Shakes Up Leadership: New CEO Steps In

CVS Health has swapped CEOs following pressure from investors, including activist Glenview Capital. The company's shares have taken a nosedive, down nearly half since 2022 highs. CVS’s latest move comes after repeated cuts to profit forecasts due to rising healthcare costs and competition in its retail and pharmacy businesses. The company’s new leader, David Joyner, is no stranger to CVS, having served previously before stepping back into the role. Glenview Capital went public earlier this month, urging CVS to consider a major strategic change, including splitting the company into different units. But sources say CVS plans to stay united under Joyner's leadership. Joyner himself emphasized the importance of operating as “one CVS Health” in his message to employees.CVS forecasts a third-quarter earnings outlook far below analysts' estimates. Analysts like Michael Wiederhorn from Oppenheimer suggest that CVS hasn’t maximized the potential benefits from merging with health insurer Aetna in 2017. The challenges CVS faces aren't just internal. The Federal Trade Commission is suing the company and its rivals over drug pricing issues. Meanwhile, Wall Street analysts have criticized CVS for not fully integrating its acquired businesses. CVS's Medicare insurance division, which makes up a third of its business, has seen costs skyrocket due to high demand from older adults. The company’s medical care ratio is significantly higher than expected, highlighting the tough spot the company finds itself in.