Under CEO John Hammergren, McKesson Corp. Is Upping Its Customer-Centric Goals

mckessonJohn H. Hammergren is chairman and CEO of McKesson Corp., a San Francisco-based distributor of medications and medical surgical supplies. McKesson partners with pharmaceutical manufacturers, providers, pharmacies, governments and other health care organizations to help provide “the right medicines, medical products and health care services to the right patients at the right time, safely and cost-effectively.”

Hammergren’s introduction into the business came very early on, as his father, a traveling salesman in the healthcare business, often took his son with him on business trips — which Hammergren felt was a valuable educational experience.

His father died when Hammergren was just 16, increasing the son’s will to succeed, he told Daniel S. Morrow, executive director of the Computerworld Honors Foundation. While on scholarship at the Institute of Technology engineering program at the University of Minnesota, Hammergren realized he preferred management, and then graduated with a business degree.

He worked for a series of medical supply companies, including Kendall Healthcare Products, which in 1991 was in the midst of a leveraged buyout. “I was, and I am, not afraid to take on a risk and I believe that in risk, if you perform, it produces great opportunities,” Hammergren told Morrow. “We saved a 90-year-old company, and ultimately sold it to Tyco, which became the beginning of Tyco HealthCare.”

Hammergren joined McKesson in January 1996 to lead McKesson Health Systems, a division focused on the pharmaceutical supply management needs of healthcare institutions. When he became president and CEO in 2001, he introduced ICARE, an acronym for customer centered, accountability, respect and excellence. Hammergren also implemented business scorecards to measure how well the company and its employees were adhering to ICARE’s principles.

In the time since Hammergren became CEO, the company has more than quadrupled revenues to $208.4 billion, expanded into global markets and advanced to No. 6 on the Fortune 500. Harvard Business Review named Hammergren as one of its 100 “Top Performing CEOs in the World.” In addition, buy-side analysts, money managers and sell-side researchers identified Hammergren as the 2015 Best CEO for the health care technology and distribution segment.

McKesson has been named the “Most Admired Company” in the healthcare wholesaler category by Fortune, a “Best Place to Work” by the Human Rights Campaign Foundation, and a top military-friendly company in the Military Friendly Company survey.

In June, Hammergren agreed to a 10 percent pay cut amid shareholder concerns, a year after the company announced a $150 million settlement with the U.S. government over allegations it failed to properly oversee opioid shipments.

“Our compensation committee undertook a robust process to review the company’s executive compensation structure, taking into account feedback from our shareholders gathered during an extensive outreach effort,” Ed Mueller, McKesson’s lead independent director, said in an emailed statement to Bloomberg.

Earlier in March, the company announced the formation of the independent Foundation for Opioid Response Efforts, a 501(c)(3) nonprofit dedicated to combatting the U.S. opioid crisis. Initiatives are expected to include the education of patients, caregivers, and providers; opioid research; and increased access to life-saving and dependence treatments. McKesson has committed $100 million to the foundation as part of its ongoing mission of delivering better care for patients.

“At McKesson, we are deeply concerned by the impact the opioid epidemic is having on families and communities across our nation. That’s why we are taking new steps to help combat the epidemic,” Hammergren said. “These new initiatives will provide additional tools to fight abuse, combat overprescribing, and increase doctor and patient education.

“We believe our investment and continued actions can have a positive impact, particularly when done in partnership with others in the healthcare industry, as well as with government policymakers, administrators and regulators,” he said.

He’s No. 5 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies.

John Hammergren, Chairman & CEO, McKesson Corp.

Headquarters: San Francisco, CA

Age: 59

Education: University of Minnesota (BA), Xavier University (MBA)

First joined company: 1996

Positions prior to being named CEO: President of Supply Management

Named CEO: 2001