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UnitedHealth Group has said former chief executive Stephen Hemsley will return to the helm as its current boss Andrew Witty steps down amid a tumble in the US healthcare giant’s shares.
The group on Tuesday said Witty was quitting the top job immediately for “personal reasons” as it suspended its annual outlook. UnitedHealth shares were down almost 12 per cent in early Wall Street trading, taking the stock’s year-to-date loss to about 34 per cent.
Witty, who was appointed chief executive in 2021, has overseen the group through a tumultuous period. UnitedHealth slashed its profit forecast less than a month ago. It is also grappling with the aftermath of the killing last year of Brian Thompson, who was the CEO of its sprawling insurance division.
Hemsley, UnitedHealth’s executive chair, was CEO from 2006 to 2017, and had held senior positions at the group since the late 1990s. He will remain the chair of the board.
“I am deeply disappointed in and apologise for the performance setbacks we have encountered with both external and internal challenges,” Hemsley said on an investor call on Tuesday morning.
He did not give additional information about why Witty was leaving, but said he would remain a senior adviser.
UnitedHealthcare, which in addition to its insurance business runs medical practices across the US, had sharply reduced its annual profit forecast in mid-April after a surge in demand for medical services from older customers that was “far above” expectations. The cut also reflected a “greater than expected” hit from reductions to spending on older patients by the previous Biden administration.
The group, which covers about 50mn Americans, is also facing a US antitrust investigation over its status as the country’s biggest health insurer.
The shake-up at UnitedHealth comes at a time when the Trump administration is seeking to reduce US drug prices.
President Donald Trump said on Monday that he hoped to achieve that in part by facilitating Americans’ access to medicines directly from pharmaceuticals groups, bypassing intermediaries. UnitedHealth is among the US’s biggest pharmacy benefit managers, which act as intermediaries for the drug industry.
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