Behind CVS CEO’s ouster, a question: Do a pharmacy and a health insurer make sense together?

Does it make sense for a chain of drug stores to own a major health insurance company?

That has been the existential question for CVS Health for six years, since its $70 billion acquisition of the massive insurer Aetna. The biggest pharmacy chain in the U.S. had already been moving beyond retail since its 2007 deal for pharmacy benefit manager Caremark.

These days, investors seem convinced a drug store chain isn’t adding much to the health insurance business, or vice versa. CVS shares have fallen 25% this year as the company has repeatedly missed investor earnings expectations and withdrawn guidance as its health insurance business faltered. On Friday, matters came to a head when the board ousted the company’s telegenic and charismatic CEO, Karen Lynch, a longtime health insurance executive, and replaced her with David Joyner, who is associated with the pharmacy benefit business.

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