Pharma Execs are Attractive Candidates for Healthcare Leadership Roles
Sir Andrew Witty, the former chief executive officer of GlaxoSmithKline, has gone from a drugmaker to a drug benefits manager. Earlier this month Witty was named the next CEO of Optum, the pharmacy benefits unit for UnitedHealth Group.
After years of setting prices for his company’s medications, Witty’s new role will provide him with a platform to address the price of prescription drugs. Witty has been outspoken about the need to lower prescription drug prices in order to provide greater patient access, particularly in poorer countries. As CEO of Optum, he will be in a position to negotiate drug prices for the people enrolled in the company’s 300 health plans that serve about 124 million people.
Witty’s new role may not be as unique as it sounds. This week The Wall Street Journal reported that healthcare companies are now looking at pharma executives for leadership roles as the landscape of healthcare is changing dramatically. With a greater emphasis on consolidation of the healthcare industry, such as the recent $79 billion acquisition of Aetna by CVS Health and UnitedHealth Group’s acquisition of DaVita Inc.’s medical group, more former pharma execs are being sought. In addition to Witty taking over at Optum, the Journal noted that CVS tapped former Eli Lilly executive Derica Rice as the head of its pharmacy benefits business. Walgreens named former Takeda Pharmaceuticals executive James Kehoe as its new head of global finances.
The move to bring these pharma leaders into the fold is occurring largely as “previously disparate businesses” are being integrated. Tim Dietlin, a partner at executive recruitment firm Heidrick & Struggles International Inc., told the Journal that companies “are looking for executives who can add outside expertise, in an effort to keep costs down while integrating.”
Yogesh Bahl, a managing director of the life science practice at AlixPartners LLP, told the Journal that with a changing dynamic it’s important to have leadership that understands the provider side of the industry as well as the manufacturing side.
In the case of Witty, who retired last year after 30 years at GSK, David Wichmann, CEO of UnitedHealth, said the former GSK head has a record of fostering innovation and strategic partnerships.
“Critically, he has deep experience with how data and analytics and new technologies can be used to improve patient outcomes, better serve consumers, lower costs and drive value across the system,” Wichmann said in a statement about Witty.
Rice, who was named president of CVS Caremark on Tuesday, briefly served as interim CEO of Indianapolis-based Eli Lilly in 2013. That experience, combined with his role as chief financial officer of the pharma company, drew him to the attention of CVS.
“Our PBM clients and the members they serve are asking for innovation, especially around value-based reimbursement models and the role pharmacy can play in improving health outcomes and lowering total health care costs," Jon Roberts, chief operating officer of CVS Health said in a statement. “We believe Derica is a great addition to our team, and the experience he brings with regard to innovation in these value-based models, in particular, will help us continue to serve our clients' needs while also developing and delivering innovative solutions and offerings.”