CVS Health, the parent company of long-term care pharmacy giant Omnicare, earlier today announced that David Joyner, most recently executive vice president of CVS Health and president of CVS Caremark, would replace Karen Lynch as president and CEO. The appointment was effective Thursday.
Lynch, who was appointed president and CEO in 2021, agreed to step down from her position, as well as resign her position on the board of directors. The company also announced that Roger Farah will be executive chairman of the board.
Joyner, who has 37 years of healthcare and pharmacy benefit management experience, also joined the board and the board’s executive committee. He served as the executive vice president and president of pharmacy services since January 2023, previously serving as executive vice president of sales and account services for CVS Caremark.
He began his career at Aetna asn an employee benefit representative before joining Caremark Prescription Services as a regional sales manager. He then served as executive vice president of sales and account services at CVS Caremark and executive vice president of sales and marketing at CVS Health.
“The board believes this is the right time to make a change, and 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,” Farah said in a statement in which he also recognized Lynch’s contributions.
“We are grateful for her consistent, customer-focused leadership, especially during the COVID-19 pandemic, when our pharmacies provided needed tests and vaccines. We also appreciate her work to advance CVS Health’s modernization and transformation to become a diversified, connected, technology-driven healthcare company, allowing us to do even more for the people we are privileged to serve.”
The company also reported that it continued to experience medical cost pressures above projections in its healthcare benefits segment in the third quarter. An investor update will be included in the company’s Nov. 6 third-quarter earnings call.
Mounting financial pressures
Earlier this month, CVS Health announced plans to lay off 2,900 employees as it faced “continued disruption, regulatory pressure and evolving consumer needs and expectations.” The layoffs accounted for less than 1% of the company’s total workforce, impacting primarily corporate positions.
The employee drawdown was part of a “multi-year initiative to deliver $2 billion in cost savings by reducing expenses and investing in technologies to enhance how we work,” a company spokesman had told McKnight’s Senior Living.
Reuters has reported that CVS Health is considering splitting the company into separate retail and insurance divisions, although it said that a final decision on a strategy had not been reached. The Wall Street Journal previously reported that Glenview Capital Management and other investors are proposing ways that the company can improve its operations.
Omnicare fate uncertain
It remains unclear what the new developments might mean for the LTC pharmacy stalwart Omnicare. The Cincinnati-based pharmacy company serves senior living communities, skilled nursing facilities and Programs of All-Inclusive Care for the Elderly. It is a business unit of Woonsocket, RI-based CVS Health.
The latest layoff news follows an announcement by CVS in January that it planned layoffs at Omnicare as a result of a review of operations “and other market dynamics.” The number of people affected was not disclosed at the time, and DeAngelis did not elaborate on Tuesday.
That announcement followed one in August 2023 in which CVS said that it would be laying off 5,000 employees, although it did not specify then whether any of those layoffs would be occurring at Omnicare. DeAngelis did not answer a question on Tuesday about whether or how many Omnicare employees were affected by that layoff.
CVS has been seeking to sell its long-term care pharmacy business since 2022. In November of that year, the now-departing Lynch said the unit “was no longer a strategic asset” for the company. A year later, in November 2023, however, CVS said in a filing with the Securities and Exchange Commission that a sale of Omnicare wasn’t expected “in the near term.”
CVS had acquired Omnicare less than a decade before, in 2015, for $10.4 billion plus the assumption of $2.3 billion in Omnicare debt, according to published sources. CVS reported a $2.5 billion loss related to the long-term care pharmacy business in the third quarter of 2022. In the first quarter of 2023 it recorded a $349 million loss “to write-down the carrying value of the LTC business to the Company’s best estimate of the ultimate selling price which reflects its estimated fair value less costs to sell,” the company said in an SEC filing at the time.
