No Soft Landing for Walgreens' New CEO

Tim Wentworth, the founding CEO of Evernorth, will face daunting challenges from Day One at the retail chain.

Walgreens Boots Alliance, Inc., rocked by financial woes, a leadership shakeup, the wobbly launch of a value-based care initiative, and pharmacists in open revolt, has named veteran healthcare executive Tim Wentworth as its new CEO, effective on October 23.

The announcement comes on the eve of Walgreens Q4 earnings report. Analysts are predicting that the company will end the fiscal year with earnings of about $34 billion, down 7.3% year-over-year. Walgreens has seen its stock value halved in the past year, reaching a 12-year low in mid-July.

The company’s cost-cutting measures, announced in early July, include layoffs for about 10% of its workforce and closing 150 stores nationwide and another 300 stores in the United Kingdom by August 2024.

Walgreens’ recent financial woes may have prompted the surprise departure of CEO Rosalind Brewer in early September, who left abruptly after only two years at the helm. Following her out the door were CFO James Kehoe and CIO Hsiao Wang.

In addition to the financial woes, Walgreens is staring at an open revolt among pharmacists and technicians, who this week walked off the job at several stores to protest chronic understaffing, long hours, and a volatile work environment. The walkout brought with it a boatload of bad publicity for Walgreens and forced the chain to temporarily close several stores.

Rocky Launch of Value-based Care

In October 2021, Walgreens unveiled Walgreens Health, which it described as a "new consumer-centric healthcare strategy to drive sustainable, long-term profitable growth." The venture partnered with VillageMD and CareCentrix -- where WBA owns a majority stake -- to "accelerating the company's capabilities in primary care, post-acute care and home care." However, the rollout has been rocky and unprofitable for Walgreens, and also played a role in Brewer's departure.

In mid-September, Walgreens announced a partnership with clinical technology provider Pearl Health that they said would accelerate the drug retailer's expansion into value-based care.

Veteran Leader

Wentworth says he sees his new post as an "incredible opportunity to lead the next phase of WBA's evolution, working with the Board and WBA leadership to deliver sustainable value and results.”

"WBA has a differentiated model with the power to build on the company’s pharmacy strength and trusted brand to evolve healthcare delivery, Wentworth said in a media release. "I believe in WBA’s vision to be the leading partner in reimagining local healthcare and well-being for all.”

Wentworth's blue-chip resume in the healthcare sector includes his most-recent role as founding CEO of Cigna subsidiary Evernorth.

Before that, he was CEO of Express Scripts, the largest pharmacy benefit manager in the United States, following the company's merger with Medco Health Solutions, Inc. in 2012, where he grew the company into a Fortune 22 company with more than $100 billion in revenue and 26,000 employees. He has also served in leadership roles at Accredo, Medco’s specialty pharmacy, and Mary Kay, Inc.

"I’ve spent my career working to improve the health of the patients we've served. I believe WBA is well-positioned to deliver more personalized, coordinated care, and achieve better outcomes at a lower cost,” Wentworth said.

"I fully recognize the challenges that health plans, healthcare providers, pharmacies, and retailers are confronting today and am confident that WBA, and its customer- and patient-focused teams, can seize the opportunities of a dynamic marketplace and be the partner of choice.”