CVS Health Names Karen Lynch to Succeed Merlo as CEO
CVS Health’s transformation from a drug store chain to a vertically integrated health care provider has taken a major turn with the appointment of Aetna President Karen Lynch as the successor to CEO Larry Merlo.
Lynch is currently EVP of CVS Health and president of Aetna, the major insurance company that CVS Health acquired two years ago, and her appointment as president and CEO at CVS Health will make it the largest U.S. company to be led by a female CEO, when she assumes the position on Feb. 1, 2021.
Merlo has held the top job at the company for the past decade, after joining CVS Health as a pharmacist 40 years ago. He will continue to serve on the company’s board until the next shareholders’ meeting in May 2021, and will officially retire on May 31.
Given Lynch’s background in health insurance and CVS Health’s ongoing journey to becoming a more integrated provider of health care delivery and services, she was described as the right leader to guide the company’s next era of growth.
"Karen is a seasoned health care expert who knows our business. She brings a relentless focus on the customer, a strong track record of driving growth and innovation, and proven transformational leadership, all of which position her well for success,” said David Dorman, chair of the CVS Health board.
Lynch vowed to build on the foundation that Merlo established, including the $69 billion acquisition of Aetna in November 2018, to meet America’s health care needs.
"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," Lynch said.
During Merlo’s tenure, CVS Health transformed from a regional retail pharmacy into the nation's largest diversified health services company, with more than $250 billion in revenues. In addition to acquiring Aetna, Merlo established the company’s network of more than 1,000 health clinics and more recently launched an expanded offering called Health Hubs. Over time, CVS Health has become less dependent on the sale of non-health care-related products merchandised at the front end of its stores and now accounting for roughly 7% of total company sales.
"No discussion of Larry's tenure would be complete without recognizing his leadership of the company's bold decision to eliminate the sale of tobacco products from all CVS Pharmacy stores, which was widely credited with being a catalyst for the reduction in smoking levels in the U.S.,” Dorman said.
“I am grateful to our entire CVS Health team for their dedication and hard work in helping us build a powerful, integrated health services company that will enable us to transform how health care is delivered across the country,” Merlo said. “Karen has been a key partner to me in our foundational work over the last two years, and her experience and vision will be critical in driving forward CVS Health's journey of enhancing value for our customers as the nation's leading health care company for years to come."
Prior to joining Aetna in 2012, Lynch was president of Phoenix-based Magellan Health Services, a diversified health services company, and held various senior executive positions at Bloomfield, Connecticut-based Cigna.