Over a period of 10 years, Andrew Witty made his reputation selling drugs around the world as CEO of London-based GlaxoSmithKline. Now, a year after his retirement, he’s taking a leadership role in managing drug benefits in one of the largest, fastest growing outfits in the US.
Witty has been named the new CEO of UnitedHealth’s giant Optum division, a pharmacy benefit management group and healthcare analytics company. Now, instead of talking about drug pricing and access from a manufacturer’s perspective, he’ll play a key role in molding real-world practices for the world’s biggest drug market.
Optum, which has 140,000 staffers around the world, earns roughly half of UnitedHealth’s revenue — $201 billion last year — from three key subsidiaries: OptumHealth and OptumInsight as well as OptumRx.
Ironically, OptumRx is one of three PBMs that controls 72% of the US market, giving it a huge amount of leverage over the prices paid for drugs, who gets to use them and who will be barred by hurdles and high out-of-pocket costs.
Sir Andrew made a rep for himself by pushing hard on patient access to drugs, which led the company to cut prices for poor countries. That was widely heralded. But GSK joined all the big drugmakers in steadily marking up the price of its blockbusters in the US. In 2016, a study by Reuters found that Glaxo had raised the price of Advair by 67% over a 5-year period, part of an industry-wide practice of jacking up list prices — particularly just ahead of the loss of patent protection. The company, though, insisted that with discounts and rebates to companies like Optum, they were actually charging less.
Witty, who’s been on the board at UnitedHealth, is replacing Larry Renfro, who goes on to become the managing partner of Optum Ventures, which is described as “a series of domestic and international funds, including a new, $100 million Global Fund, dedicated to emerging and advanced technology, data analytics and health care services companies with transformative capabilities to make health care better for everyone.”
With a proven strategy, great leadership and top talent, Optum has the unique opportunity to continue improving the health care experience, outcomes and value people receive in the U.S. and globally, and I am honored to participate in that mission – especially having come to know the leaders of the enterprise through my work as a director. In many ways, even with all its accomplishments, Optum feels as though it is just getting started.
Image: Andrew Witty. BLOOMBERG
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