Will Walgreens look to hospitals for new CEO?

In relaying the departure of CEO Rosalind Brewer on Sept. 1, Walgreens said it was looking for a replacement with "deep healthcare experience."

But could that person come from the hospital industry?

Experts told Becker's a new CEO with hospital experience is possible given Walgreens' push into directly providing healthcare. In 2021, the company paid $5.2 billion for a majority stake in primary care chain VillageMD. Earlier this year, VillageMD acquired provider group Summit Health for $8.9 billion, giving it more than 700 practices across 26 markets.

"Walgreens is very focused on building out the healthcare side of its business. … As such, it wants a CEO who has deep experience in the complex landscape of healthcare," Neil Saunders, an analyst with GlobalData Retail, told Becker's. "Someone with a background in the hospital industry, which is at the sharp end of healthcare, may fit the bill. However, I suspect Walgreens will cast the net very wide across all parts of the healthcare sector."

But it wouldn't be entirely without precedent. Two other healthcare disruptors — Walmart Health and Amazon's One Medical — both have hospital industry veterans at the helm. Brian Setzer, executive vice president of health and wellness for Walmart, is a former top executive with Pittsburgh-based Highmark Health. Both the outgoing and incoming CEOs of One Medical — Amir Dan Rubin and Trent Green — have years of experience in the hospital C-suite.

But both Walmart Health and One Medical are parts of larger conglomerates. Despite Walgreens Boots Alliance's forays into healthcare — the company also bought home health provider CareCentrix outright in March — pharmacy and retail still drive the vast majority of its revenues.

"We believe that the relationship between Roz and Walgreens soured due to the slow profitability ramp-up of WBA's U.S. healthcare business and expect the company to bring in someone who can appropriately guide this new business in the right path," Morningstar equity analyst Keonhee Kim told Becker's.

Asked whether that person could come from the hospital business, Mr. Kim said: "That is a difficult call to make, and management has not provided any information on where they will recruit the new CEO from."

Ms. Brewer arrived at Walgreens in 2021 after serving as COO of Starbucks and president and CEO of Sam's Club. Interim CEO Ginger Graham, a longtime Walgreens board member, comes from a pharma and medtech background. A Walgreens spokesperson told Becker's it wasn't providing any additional comment beyond what was in the Sept. 1 press release.

"Ginger is the ideal person to serve as interim CEO, given her leadership experience across multiple segments of the healthcare industry, deep knowledge of WBA, and strong operational skills," Walgreens executive chair Stefano Pessina said in the release. "Our board and leadership team will intensify our focus on creating value for our customers and our shareholders while we advance the search for a successor with deep healthcare experience to lead in today's dynamic environment."

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars