Diplomat CEO, chairman Hagerman retires
Diplomat Pharmacy has announced that co-founder, CEO and chairman Phil Hagerman is retiring. The Flint, Mich.-based company has named board member Jeff Park as interim CEO, effective immediately. Hagerman will continue as a member of the board and become chairman emeritus, with Ben Wolin taking over as chairman, effective immediately.
Hagerman co-founded Diplomat in 1975 and has served as chairman and CEO since 1991. The company said that it has launched a search for a permanent successor. During the search process, Hagerman will act as a consultant to ensure a smooth transition, advising the management team on the execution of the company’s growth plans. His retirement comes as the company transitions into a more broad-based healthcare company, having recently completed the acquisition of LDI Integrated Pharmacy Services — one of two pharmacy benefits managers the company acquired at the end of 2017.
“Diplomat has a significant opportunity to enhance shareholder value by building on our recent acquisitions and accelerating our evolution from a specialty pharmacy provider to a broader health care company,” Wolin said. “While we have made meaningful progress over this past year, there remains work ahead to build on the growth plans we have in place. Phil and the Board have mutually determined that now is the right time to identify a new CEO to help drive the Company forward and position Diplomat for long-term growth and success. As we continue to execute on our strategy, we will remain true to our one essential tenet: take good care of patients and the rest falls into place.”
The company has emphasized its leadership team as a core component of its new strategy in conference calls. Park — formerly executive vice president and CEO of Catamaran joined the company in 2017 and has worked in the PBM and pharmacy industry.
“Throughout his career, Jeff has overseen the integration of over a dozen transactions, and we look forward to benefitting from his operational expertise as we continue to integrate our recent acquisitions,” Wolin said. “As Jeff and the management team work to realize Diplomat’s potential, the Board will conduct a comprehensive search to identify a leader with a proven track record of performance in the key areas of growth and focus for Diplomat. We look forward to Phil’s continued contributions on the Board, and wish him the best in his well-deserved retirement.”
Alongside the announcement of Hagerman’s retirement, Diplomat affirmed its 2017 guidance and offered a preliminary 2018 outlook. The company said it anticipates revenue to be in the midpoint between $4.4 billion and $4.6 billion in 2017.
“Our continued expansion into a broader-based healthcare company, driven by our entry into the pharmacy benefit management space, presents new opportunities,” Diplomat president Joel Saban said. “In addition to our integral PBM capabilities, we can accelerate our specialty and infusion services growth. Now, we are focused on continuing to realize synergies from these acquisitions as we move through the integration process.”
The company projected a 2018 revenue range of between $5.3 billion and $5.6 billion — or a roughly 20% increase based on the midpoint of 2017’s range. The 2018 projection includes the impact of LDI’s integration, as well as the addition of National Pharmaceutical Services.
“With expanded capabilities under our three complementary focus areas of pharmacy services, payer services, and industry services, we can meet stakeholders’ evolving needs and enable exceptional patient care through our unique industry position and innovative service model,” Saban said. “We are proud to have made a number of strategic, disciplined acquisitions; added to our leadership team; and diversified our services—all to be a springboard for growth in 2018.”
Hagerman said, “We have added great talent to Diplomat’s leadership team over the past year, and the time is right for this leadership change to help accelerate Diplomat’s growth into a broader-based healthcare company. I look forward to presenting together with Jeff on this strategy next week at the JP Morgan Healthcare conference in San Francisco.”