CVS names new CEO in the wake of layoffs and poor stock performance

America's largest drug store chain has appointed a new chief executive officer, with a longtime executive from within the company taking the helm. The company also withdrew its 2024 profit forecast and cautioned investors against relying on previous full-year guidance due to increased medical cost pressures. This announcement follows a challenging year for the company, highlighted by declining stock prices, slow growth, and mounting investor pressure.

Earlier in the year, rising costs at the insurance division impacted profits, resulting in leadership changes. Regulatory scrutiny was also directed at the company's pharmacy benefits management arm, amid accusations of price inflation. A lower reimbursement environment for prescription drugs has negatively affected retail pharmacies broadly, impacting profits.

Amid speculation of a potential separation of its retail and insurance operations spurred by investor activism, the company reiterated the value of its integrated business approach. The newly appointed leader is succeeding the former CEO, who navigated the company through the Covid-19 pandemic. The board expressed confidence in the new CEO's ability to lead the company effectively. The company is set to release its third-quarter earnings shortly.