CVS is continually exploring ways to create shareholder value, a spokesperson said in a statement, declining to answer further questions about the company’s future direction.
CVS been grappling with falling profit margins at its retail pharmacies and rising costs of patient care from Aetna, which generates about a third of its revenue. In August, the company cut its 2024 earnings forecast for a third straight quarter.
Surging medical costs have been affecting companies throughout the insurance industry, including Humana Inc. and UnitedHealth Group Inc. CVS also recently took a hit when Medicare, the US health program for the elderly, lowered quality ratings for one of its national health plans, reducing reimbursement levels.
Brian Kane, who had headed the insurance unit, departed in August after less than a year in the role. Kane was replaced by Chief Executive Officer Karen Lynch and Chief Financial Officer Tom Cowhey while CVS searches for a successor.
The Wall Street Journal previously reported that CVS executives would meet Monday with Glenview Capital Management on how to improve operations amid a drop in share value. The investor’s founder, Larry Robbins, has a large position in CVS — which represents about $700 million of his $2.5 billion fund — the paper wrote.
Reuters earlier reported the news of the review.
© 2024 Bloomberg L.P.