CVS Ousts Karen Lynch as C.E.O. and Shares Fall

CVS Health abruptly ousted its chief executive, Karen S.Lynch, on Friday as the pharmacy and health care conglomerate struggled with sluggish growth and faced pressure from investors.The company appointed David Joyner, the head of CVS Caremark, its pharmacy benefits manager unit, as the new chief.

The management change was accompanied by a dour financial update, with the company scrapping its previous forecasts because of “elevated medical cost pressures.” Shares of CVS fell sharply in early trading.The company’s earnings have disappointed investors in recent quarters, in part because of rising costs at Aetna, the company’s insurance arm.Activist investors have pushed the company for changes, prompting CVS to explore breaking itself up, potentially by separating its pharmacy business from its insurance unit.CVS employs about 300,000 people.

Its sprawling portfolio includes the branded pharmacy chain, with more than 9,000 retail locations; Aetna, which it acquired in 2018, which has nearly 40 million policyholders and other customers; Caremark, a pharmacy benefits manager that acts as middlemen overseeing prescriptions; and Oak Street Health, which runs more than 200 primary care centers for Medicare recipients.Ms.Lynch took over as the group’s chief executive in February 2021, after running Aetna.

“I don’t want people to think about CVS Health as just that drugstore,” she told The New York Times in 2022.“I want them to think about it being a health care company.”Roger Farah, the chairman of CVS Health, said in a statement on Friday that “the board believes this is the right time to make a change.” He added that Mr.

Joyner’s “deep understanding of our integrated business” would help steer the company through its challenges.During his tenure at Caremark, Mr.Joyner faced increased scrutiny of pharmacy benefits managers.

He appeared at a Congressional hearing this summer, facing questions from lawmakers about the role of pharmacy benef...