The next chief executive officer of Walgreens Boots Alliance will have “deep healthcare experience,” the drugstore giant’s board and chairman say.
Rosalind Brewer, 61, stepped down last week as chief executive officer with Walgreens share price trading at a 14-year-low and the company spending billions of dollars to transform into a provider of primary medical care. The departure of Brewer as CEO comes less than three years after she started and less than two months after Walgreens chief financial officer said he was leaving.
Brewer’s background, which impressed Walgreens board when they hired her in 2021, was largely retail, having been chief operating officer at Starbucks before joining Walgreens. She also worked in key executive roles at Walmart and rose to be CEO of Sam’s Club during a career in retail executive roles that spanned more than two decades.
Now Walgreens is less reliant on retail in the front end of the store and wants to expand healthcare offerings both inside the store, behind and near the pharmacy counter as well as attached to the store in the form of doctor-staffed clinics.
“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,” said Walgreens executive chairman Stefano Pessina, the 82-year-old Italian billionaire who preceded Brewer as CEO and was instrumental in her hiring.
Much is at stake.
Walgreens-backed VillageMD earlier this year purchased Summit Health-CityMD for $8.9 billion to expand doctor-staffed clinics across the country. That transaction also included investments from Walgreens, which owns more than 50% of VillageMD, and Cigna’s Evernorth Health Services.
Walgreens has also made other acquisitions and sources say have more healthcare deals in the works while they also look for a permanent CFO that also has healthcare experience. Walgreens said in June it was taking “immediate actions” that include another $600 million in cost-cutting so the company’s so-called “transformational cost management program” target is now $4.1 billion by fiscal 2024 compared to an earlier goal of $3.5 billion.
Meanwhile, Walgreens rivals, including CVS Health, Amazon and Walmart, are gobbling up medical care providers, hiring physicians and nurse practitioners and looking to expand their primary care operations as well.
It’s little wonder Walgreens stressed the healthcare bona fides of Ginger Graham, who last week was named the company’s interim CEO.
“For nearly three decades, Ms. Graham held leadership positions across the healthcare industry,” Walgreens said. “She has served on the WBA Board of Directors since 2010, and in October 2022, was named the WBA Board Lead Independent Director. From 2003 to 2007, she was President and CEO of Amylin Pharmaceuticals, a biopharmaceutical company focused on first-in-class medicines for people with diabetes. Prior to that, she was Group Chairman, Office of the President for Guidant Corporation, a global leader in cardiology medical technology.”