Aetna president Karen Lynch and CVS Health CEO and president Larry Merlo
CVS Health Corporation has announced that its board of directors has appointed Karen S. Lynch as the company’s next president and CEO, effective February 1, 2021.
Current CEO and President Larry J. Merlo plans to retire on May 31, 2021. He will serve in the role of strategic advisor starting February 1, 2021, to assist with the transition until his retirement.
Lynch, who is currently executive vice president, CVS Health and president of Aetna, which is owned by CVS, has been with Aetna for eight years. She had a leadership role in the company’s integration of Aetna when that $69 billion deal closed in November 2018.
Lynch launched the first suite of transformative products and services, including the Aetna Connected Plan, powered by CVS Health, and Aetna health plans with access to all covered MinuteClinic services at no cost, CVS said. Under her leadership, Medicare Advantage membership grew more than three times the industry average, generating membership growth of over 30% in 2019. Lynch has also been instrumental in the design of the HealthHUB strategy, which incorporated the HealthHUB’s differentiated services into Aetna’s offerings.
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. She has been named to Business Insider’s Top 100 People Transforming Business, and from 2016 to 2020 she was on Fortune’s Most Powerful Women in Business list.
Lynch also serves on the board of U.S. Bancorp and is the chair of its Audit Committee. She will also join the CVS Health’s Board of Directors upon assuming her new role.
Merlo began his career with the company as a community pharmacist more than 40 years ago, and has been serving as president and CEO for a decade. He will continue to serve on the CVS board of directors until the company’s next annual meeting of stockholders in May 2021.
David W. Dorman, chair of the Board of CVS Health Corporation, thanked Merlo for his service and said that during his tenure, CVS Health transformed from a regional retail pharmacy into one of the nation’s leading diversified health services companies, with over $250 billion in revenues.
“Larry led CVS Health’s industry-disrupting acquisition of Aetna in 2018, and strategically positioned the company’s community-based health clinics to provide integrated and holistic health care services to all Americans,” Dorman said. “In doing so, he created new ways to deliver health care through CVS Health’s unparalleled suite of assets, including a national health insurance plan provider, a pharmacy benefits manager, community-based retail pharmacies and a long-term care pharmacy services business.”
Merlo was also responsible for the company’s decision to eliminate the sale of tobacco products from all CVS Pharmacy stores, which Dorman said was widely credited as being a catalyst for the reduction in smoking levels in the U.S.
“This leadership transition comes at the right time for CVS Health,” Dorman said. “This month marks the two-year anniversary as one company, with our foundation clearly established and significant positive momentum across the company. As Larry has been transparent with us about his overall plans, we were able to put a thorough, multiyear process in place to consider and evaluate internal and external candidates. That process led to the selection of Karen Lynch. Larry’s collaboration with Karen in the coming months will ensure an effective leadership transition.”
Lynch said she was deeply honored for the opportunity.
“Never before has our purpose been more critical than during these unprecedented times,” she said. “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 healthcare more accessible and affordable, driving better health outcomes for our consumers and communities.”
“I am incredibly proud to have had the opportunity to lead CVS Health over the past decade as we pursue our important purpose to help people on their path to better health,” Merlo 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 healthcare is delivered across the country. 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.”
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