Walgreens CEO steps down. What’s next?

With Rosalind Brewer stepping down as CEO of Walgreens Boots Alliance, the pharmacy chain is searching for a leader at a time when the company has tried to play a bigger role in the delivery of healthcare.

Rosalind Brewer has stepped down as CEO of Walgreens Boots Alliance. The company says it's looking for a new leader with deep healthcare experience. (Photo: Walgreens)

The company announced Friday that Brewer was stepping away, describing it as a mutual decision between her and the board of directors. She became CEO of the nation’s second-largest pharmacy chain in March 2021.

Analysts have noted the company’s stock has plunged, down about 37% in 2023. By comparison, the S&P 500 has risen about 18% since the beginning of the year.

Stefano Pessina, executive chairman of Walgreens Boots Alliance, said the company’s board is looking to find someone with a strong background in healthcare to lead the company.

“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,” Pessina said in a statement.

The company has struggled in recent months as demand for COVID-19 vaccines has dropped and sales of other items in stores have lagged, CNBC reported.

Here’s a quick look at Walgreens’ next steps.

Interim plans

Ginger Graham is taking over as the company’s interim CEO. She’s the lead independent director of Walgreens Boots Alliance. Brewer has agreed to stay with Walgreens in an advisory capacity while the company looks for a permanent CEO.

Graham previously served as president and CEO of Amylin Pharmaceuticals, a company focused on treatments for people with diabetes.

Pessina said Graham 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."

Doing the search

Walgreens said a leading executive search firm is working with the company to find a new leader. Walgreens didn’t disclose the name of the firm.

Expanding its reach

Like other retailers such as CVS Health, Amazon and Walmart, Walgreens has sought to get more involved in healthcare delivery.

VillageMD, which is backed by Walgreens Boots Alliance, purchased Summit Health-CityMD in an $8.9 billion deal. Walgreens owns the majority of VillageMD, a primary care provider. Cigna Corp.’s Evernorth also invested in the transaction. Summit Health-CityMD offers primary, specialty and urgent care. With the deal, the companies operate more than 680 provider locations in 26 markets.

When the Summit deal was announced, Brewer hailed it as "transformational for our U.S. Healthcare segment and reinforces our intent to create greater access to quality healthcare across the care continuum."

Looking ahead

Evercore ISI analyst Elizabeth Anderson told Reuters that as Walgreens aims to offer more healthcare services, it’s logical for the company to find a new CEO, particularly in light of the disappointing stock prices.

"With the increased focus on growing the Walgreens Healthcare segment ... it makes sense to retrench and search for a new leadership team with more extensive backgrounds in healthcare services," Anderson added.

Neil Saunders, managing director of GlobalData, told the Associated Press that Brewer has more background in retail, while the company sees more growth in healthcare.

“Healthcare is a lucrative sector and Walgreens is not wrong to see it as a major part of its future playbook,” Saunders told AP. “However, the new permanent CEO will need to remember that it is possible to invest in both healthcare and retail. It should not be an either/or decision.”

Brewer’s legacy

The company hailed Brewer for her work in leading Walgreens through the COVID-19 pandemic.

Brewer said she was proud of her work at Walgreens to expand healthcare services for consumers.

“I am confident that WBA is on track to be a leading consumer-centric healthcare company, serving thousands of communities across the country, especially those that need access to healthcare the most,” she said in a statement.

Only 10% of the Fortune 500 companies are run by women, and Brewer was the only Black woman on that list when she became CEO, The New York Times noted.