Hedge fund mogul Larry Robbins seeks overhaul at struggling CVS: report

Hedge fund mogul Larry Robbins will meet with executives at struggling drugstore chain CVS on Monday to present a turnaround plan that the Glenview Capital founder hopes will improve the firm’s operations, according to a report.

Robbins, 55, made his name with a 2012 bet on health companies that he thought would benefit from Obamacare and his fund specializes in healthcare investments.

Glenview has built up a large position in CVS that represents about $700 million of Robbins’ $2.5 billion fund, according to The Wall Street Journal reported, which first reported on the meeting.

The Journal quoted people familiar with the matter that Glenview’s large stake is a sign of Robbins’ belief in the company’s potential and his confidence that he can get executives to sign up to his ideas to boost profitability.

But the report did not outline any of the details of Robbins’ blueprint to overhaul CVS’s operations

Glenview did not return The Post’s calls seeking comment.

CVS shares have been in free fall since the start of this year, dropping by nearly 24%, after it repeatedly slashed its full-year profit outlook. Shares rose nearly 1.6%, to $62.40, in midday trading Monday.

The company’s insurance coverage arm, Aetna, has seen higher medical costs eat away at its bottom line and last month CVS chief executive Karen Lynch took the step of firing Aetna president Brian Kane after less than a year on the job.

Speculation has mounted among fund managers that an activist investor may swoop in to push CVS to make changes that would boost its share price.

Investment firm Sachem Head Capital Management built a new 0.2% stake in the company during the second quarter, according to a regulatory filing in August.

As many as 2,900 people are set to be laid off as part of previously-announced job cuts, or roughly 1% of the drugstore giant’s overall workforce.

A CVS spokesman said the layoffs “will not impact front-line jobs in our stores, pharmacies and distribution centers.”

Earlier in August, CVS cut its annual profit forecast to $6.40 to $6.65 per share from its prior view of at least $7, marking the third time CVS lowered its outlook for the year.

It also announced a multi-year plan to save $2 billion in costs through measures such as streamlining operations and using artificial intelligence and automation across its business.

The company also saw its woes mount with a recent lawsuit brought by the Federal Trade Commission.

The FTC accused CVS Health’s Caremark, the firm’s prescription drug benefit manager (PBM), and rivals Optum Rx and Express scripts of artificially inflating the prices of insulin drugs.

PBMs work with insurance companies to negotiate discounted prices from drug companies in exchange for including the drugs in their coverage. In theory, they are supposed to save patients money.

Glenview is based in Manhattan, but founder Robbins announced his move to Florida in April, following other notable hedge fund titans such as Ken Griffin of Citadel.

He told Bloomberg at the time that that he was leaving New York because of its high income taxes.

“I know of no business that has generated long term success by driving away its highest paying customers,” he told the outlet on April 10.