CVS Health turns a profit, shakes up brass
CVS Health swung to a fourth-quarter profit and is starting the new year with a management shakeup for its largest business.
The company will replace Derica Rice with Dr. Alan Lotvin as the leader of its pharmacy benefit management segment.
CVS Health also named former Concerto Healthcare executive Alec Cunningham to lead its Aetna insurance business as it focuses more on government programs like Medicare Advantage.
CEO Larry Merlo told analysts the changes give CVS Health experienced leaders as it evolves.
CVS Health operates one of the nation’s largest drugstore chains with more than 9,900 retail locations. Its pharmacy benefit management segment runs prescription drug plans for big clients like employers and insurers. It pulled in more than $141 billion in revenue last year.
The company said Lotvin has deep experience in that area and in working with high-cost specialty drugs that have become a growing focus for insurers and other bill payers.
CVS Health is focusing more on providing health care services and managing customer care. It added health insurance to its business mix with the 2018 purchase of the nation’s thirdlargest insurer, Aetna.
Its new business helped CVS Health Corp. earn $1.75 billion in the final quarter of 2019. That compares to a loss of $419 million the previous year, when the company booked a big charge from a struggling business that provides services to long-term care facilities.
In the most recent quarter, adjusted earnings totaled $1.73 per share, the Woonsocket, R.I., company said.
Revenue climbed 23% to $66.89 billion, helped in part by an increase in prescriptions filled and higher prices for some brandname drugs.
Analysts polled by FactSet expected a profit of $1.68 per share on revenue of $63.93 billion.