CVS Shuffles Executive Roles With Drug-Plan Chief Set to Depart

(Bloomberg) — CVS Health Corp. unveiled a series of management changes, including appointing a new chief for its pharmacy-benefit management business, as the health giant absorbs insurer Aetna, its biggest-ever acquisition, and makes over more of its drugstores.

The company said in a statement Wednesday that Alan Lotvin had been named president of CVS Caremark, taking the reins from Derica Rice, who will depart CVS. Rice, a former Eli Lilly & Co. executive who joined the company in 2018, will remain through this month to help ensure a smooth transition.

Additionally, Jonathan Mayhew was named executive vice president, transformation, and Alec Cunningham was named president and chief operating officer for the Aetna business.

Shares of CVS were little-changed at $73.76 at 9: 42 a.m. on Wednesday in New York. The company also projected better-than-expected revenue for 2020 and posted stronger-than-forecast fourth-quarter results.

The Aetna acquisition, announced in December 2017, was a bet that the U.S. health-care system is shifting to a more integrated model. Former Aetna Chief Executive Officer Mark Bertolini stepped down from CVS’s board last week. Bertolini said he had offered to remain on the board past his current term but that he wasn’t renominated.

CVS CEO Larry Merlo told analysts on a conference call that the executive changes “really reflect the priorities that we have today, the opportunity and excitement around these products and services coming to market and the opportunity to get them in the hands of more and more people as much as we possibly can.”

“We’re very pleased with where we’re at today and we’re excited about what’s in front of us,” Merlo said.

In a separate investor presentation on Wednesday, CVS said it expects 2020 revenue of $261.97 billion to $265.48 billion, above analysts’ average forecast of $256.89 billion. The company’s pharmacy-services business is expected to be a critical plank of that growth, with projected 2020 sales of $137.50 billion to $139.45 billion.

Same-store sales for CVS’s pharmacy business rose 4.1% year-over-year in the fourth quarter. By the end of 2020, CVS plans to complete as many as 650 HealthHUBs, the company said in its presentation.

(Updates stock-price information in fourth paragraph)

To contact the reporter on this story: Angelica LaVito in New York at alavito@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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