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November 6, 2020

Top Aetna exec Lynch named CEO of CVS Health

HBJ Photo | Steve Laschever Aetna President Karen Lynch.
By Greg Bordonaro, Liese Klein

The top executive of Hartford health insurer Aetna has been named the new CEO of parent company CVS Health Corp., the company announced. 
 
Rhode Island-based CVS Health Corp. said Friday morning that its board of directors appointed Karen S. Lynch -- currently executive vice president of CVS Health and president of Aetna -- as the company’s next president and CEO, effective Feb. 1, 2021. 
 
Lynch will also join the company’s board of directors. She will replace Larry J. Merlo who will transition from the the company’s top job, after beginning his career with CVS as a community pharmacist more than 40 years ago, and serving as president and CEO for a decade. 
 
Merlo will continue to serve on CVS Health’s board until the company’s next annual shareholder meeting in May and he will retire May 31, 2021.
 
The leadership transition comes about two years after CVS Health and Aetna tied the knot in a $69-billion merger. 
 
Lynch was named one of HBJ’s 5 business leaders to watch in 2019. 
  
“I am deeply honored to have the opportunity to succeed Larry and lead CVS Health on the next phase of our important journey to meet America’s health care needs,” Lynch said. “Never before has our purpose been more critical than during these unprecedented times. Together with the CVS Health leadership team and all of our colleagues, I will work to build on the strong foundation Larry has put in place to continue to make health care more accessible and affordable, driving better health outcomes for our consumers and communities. I am highly confident about our company’s future and look forward to further accelerating the value we bring to all of our stakeholders.”
 
Prior to joining Aetna in 2012, Lynch was president of Magellan Health Services, a diversified health services company, and held various senior executive positions at Cigna.

Lynch will be the 40th female chief executive on the Fortune 500 list, according to CNN Business.
 
CVS reports 3Q earnings

CVS Health Corp. on Friday also reported that its third-quarter profits fell 20%, but it still beat analysts expectations as the company’s overall revenues grew by 3.5%

The company said its third-quarter profits totaled $1.2 billion, or 93 cents per share, vs. $1.5 billion, or $1.17 per share, in profits a year earlier. 

Total revenues for the company increased to $67.1 billion compared to $64.8 billion in the third quarter of 2019, beating analysts’ estimates. 

Revenues rose 8.8% at the company's healthcare benefits business driven by membership growth, despite losses due to the divestitures of Aetna’s standalone Medicare Part D prescription drug plans and membership declines in commercial products.

Revenues declined at CVS Health's pharmacy services segment due client losses and price compression, the company said, even as retail revenues rose due to higher prescription volume and increased testing and store profits. 

An 11% jump in CVS operating income for the quarter was attributed to a pre-tax gain on the sale of a workers' compensation subsidiary and a pre-tax loss on the sale of a Brazilian subsidiary.

“As an integrated health services provider, we’re developing holistic and innovative solutions that meet the needs of our customers in the community,” CVS Health President and CEO Larry J. Merlo said. “Our strong third-quarter results demonstrate continued execution of our long-term strategic plan that is transforming the way health care is delivered.”


Aetna officials said in October that an undisclosed number of positions will be cut as part of the company’s restructuring and integration into CVS Health.

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