Long-term CVS Health Chief Executive David Joyner has succeeded Karen Lynch as CEO as the company struggles to deliver higher profits and stock performance, CVS announced Friday.

The move takes effect Thursday, the day before the announcement, as CVS shares have fallen nearly 20% this year. The stock plunged 8% on Friday.

CVS has faced challenges as higher medical costs weigh on its Aetna insurance unit and a pharmacy retailer pressured by weaker consumer spending and prescription drug reimbursement headwinds. In August, the company cut its full-year profit forecast for the third straight day and said it would cut $2 billion in costs over the next few years.

In its press release Friday, CVS also said it expects third-quarter adjusted earnings to be between $1.05 and $1.10 per share. It expects medical costs to be higher than previously expected.

“Given continued elevated medical cost pressures in the Health Care Benefits segment, investors should no longer rely on the Company’s prior guidance provided in its second quarter 2024 earnings conference call on August 7, 2024,” CVS said in the Press release.

The company is expected to report its third-quarter results on November 6.

Last month, major CVS shareholder Glenview Capital launched a significant push for changes at the company, CNBC previously reported.

In a statement Friday, Glenview Capital said it respects and supports Lynch’s departure from the company and looks forward to working with Joyner. The company asked CVS to renew its board.

“We believe that the company’s culture, governance and leadership should be strengthened by individuals who have both relevant industry experience and fresh perspectives, and that the company would be best served by a rapid replacement of the board,” Glenview said.

CNBC also reported last month that CVS’s board had hired strategic advisers to weigh its options, including the possibility of dissolving its insurance and retail businesses. But CVS will now move forward unscathed, a company spokesman told CNBC on Friday.

Most recently, Joyner led the company’s pharmacy services business as president of Caremark, CVS’s primary pharmacy benefits manager, a position similar to Lynch, before taking the top job in February 2021. He retired from CVS in 2019 before returning to the helm of Caremark early last year.

“I came back to CVS Health in 2023 because I believed I could give more to the company, and for the same reason I am pursuing this opportunity today,” Joyner said in a statement.

He began his career at Aetna in pharmacy benefit services and previously held the role of executive vice president of sales and marketing at CVS Health.

Joyner also worked at Caremark for about eight years before CVS acquired it in 2007. Caremark is one of the country’s three largest so-called PBMs, which are at the center of the U.S. drug supply chain. PBMs negotiate drug discounts with manufacturers on behalf of insurers, create lists of preferred drugs covered by health plans, and reimburse pharmacies for prescriptions.

“We believe David and his deep understanding of our integrated business can help us more directly address the challenges facing our industry, accelerate the operational improvements our business requires, and fully realize the value we can uniquely create,” CEO Roger Farah said in a statement.

Lynch also resigned from the company’s board this week, the company said Friday. Joyner will take a seat on the board and Farah will assume the role of chairman.

As CEO of CVS, Joyner will deal with increased scrutiny of Caremark and other PBMs by the Biden administration and lawmakers, which is likely to continue regardless of which party holds the White House after the US election. The Federal Trade Commission last month sued Caremark and two other large PBMs, saying they engage in practices that increase their profits while driving up insulin costs for patients.

He also must contend with higher medical costs for Medicare Advantage patients, which have skyrocketed for insurers over the last year as more seniors return to hospitals to undergo procedures they had put off during the Covid-19 pandemic . Medicare Advantage is privately owned health insurance covered by Medicare.

The company hopes to achieve its goal of 100 to 200 basis points of margin improvement in its Medicare Advantage business next year, CVS executives said in August.

Next month, CVS will report that medical costs were still elevated in the third quarter.

The company expects its insurance unit’s medical claims ratio – a measure of total medical costs paid relative to premiums collected – to be around 95.2% for the quarter, up from 85.7% in the year-ago period. A lower ratio typically indicates that a company has collected more in premiums than it has paid out in benefits, leading to higher profitability.

— CNBC’s Sara Salinas and Rohan Goswami contributed to this report.