Walgreens’ Pessina: Don’t Think Of Us ‘As A U.S. Business’
Stefano Pessina, the Italian billionaire running Walgreens Boots Alliance (WBA), said he doesn’t plan to be a “caretaker CEO” as the company closes 200 U.S. stores, searches for a permanent top executive and cuts more than $1.5 billion as part of its global expansion.
Pessina, who took over as Acting CEO and Executive Vice Chairman after the retirement of Greg Wasson in December, has been running Walgreens for the last three months as he and the board search for a permanent successor. He has just shy of 140 million Walgreens shares, he said, and is the company’s largest individual shareholder.
One the first of a two-day meeting with investors in New York, Pessina said the company isn’t ruling out any acquisitions or mergers, including a potentially closer partnership with a pharmacy benefit management (PBM) firm. Walgreens chief U.S. rival, CVS Health (CVS) owns Caremark, a pharmacy benefit manager and some investors would like to see a PBM under the Walgreens Boots Alliance umbrella.
“We don’t exclude anything,” Pessina said this afternoon in response to a question about a potential PBM acquisition. “We are open to any kind of commercial joint venture.”
But for the most part, Pessina said Walgreens is focused on integrating the Walgreens U.S. operation with the European and global operations of Alliance Boots. The two iconic brands completed their merger at the end of last year forming Walgreens Boots Alliance.
Looking ahead, Pessina urged investors to no longer think of Walgreens as a U.S. company and that its strategy would be a global one. Based on his experience running Boots pharmacies in Europe where government health programs are dominant, he has said consolidation will escalate in the U.S. now that the Affordable Care Act has increased government influence on more reimbursement to pharmacies here.
Though it’s “tempting to think of us as a U.S. business . . . we cannot afford to be parochial and nor would we choose to be,” Pessina said.
To that end, Pessina said Walgreens next CEO will be from outside of the company with consultants are looking at external candidates.
“Finding the right person is proving more difficult than we might have hoped,” Pessina said. “It’s not easy to find someone with the experience and gravitas that we want.”
Wondering how the Affordable Care Act will impact pharmacies like Walgreens? The Forbes eBook Inside Obamacare: The Fix For America’s Ailing Health Care System answers that question and more. Available now at Amazon and Apple.
Filed under: General Problems
Charles Walgreen senior is probably turning over in his grave.