Essner, Robert A. 1947–
Robert A. Essner
Chairman, chief executive officer, and president, Wyeth
Education: Miami University, bachelor's degree; University of Chicago, master's degree.
Family: Son of Arthur Essner and Charlotte E. Levy; married Rosalind (maiden name unknown; divorced); married Anne (maiden name unknown); children: five (first marriage, two; second marriage, three).
Career: Sandoz Pharmaceuticals Corporation, 1978–1986, various management positions; 1986–1987, vice president; 1987, corporate vice president and COO for business management; 1987–1989, president of Sandoz Consumer HealthCare Group; Wyeth-Ayerst Laboratories, 1989–1991, senior vice president for sales and marketing; 1991–1993, executive vice president; 1993–1997, president; Wyeth-Ayerst Global Pharmacueticals, 1997, president; American Home Products Corporation, 1997–2000, executive vice president; 2000–2001, president and COO; 2001–2002, CEO and president; Wyeth, 2002, CEO, president, and COO; 2003–, chairman, CEO, and president.
Awards: Prix Galien Suisse, 2003; Science/Technology Medal, Research and Development Council of New Jersey, 2003.
Address: Wyeth, 5 Giralda Farms, Madison, New Jersey 07940; http://www.wyeth.com.
■ After a decade of climbing the corporate ladder at Sandoz Pharmaceuticals, Robert Essner joined Wyeth-Ayerst Laboratories. He eventually became president, chief executive officer, and chairman of the board of directors at Wyeth, one of the world's largest producers of over-the-counter and prescription medications. Essner guided the company's transition from conglomerate with an assortment of consumer products back to focused drug developer and producer. His steady management style led Wyeth through years of legal entanglements, including the fen-phen diet-pill scandal of the 1990s.
UP THE CORPORATE LADDER
Born and raised in New York City, Robert Alan Essner graduated from Miami University in Oxford, Ohio, and earned his master's degree from the University of Chicago. In 1978 he joined Sandoz Pharmaceuticals Corporation, the manufacturer of over-the-counter and prescription medicines based in East Hanover, New Jersey. By 1987 Essner was president of the Sandoz Consumer HealthCare Group in Parsippany, New Jersey.
In 1989 Essner moved to Wyeth-Ayerst Laboratories, the subsidiary of American Home Products Corporation (AHP), as senior vice president for sales and marketing. AHP was one of the world's largest research-based producers of pharmaceutical and health-care products. In 1993 Essner became president of Wyeth-Ayerst, responsible for the company's U.S.-based pharmaceutical business. In March 1997 Essner was named president of Wyeth-Ayerst Global Pharmacueticals.
Later in 1997 Essner became executive vice president and a member of the board of directors of the Madison, New Jersey–based AHP. In 2000 he was elected president and chief operating officer, with responsibility for all of AHP's three divisions: Wyeth-Ayerst Pharmaceuticals, Whitehall-Robins Healthcare, and Fort Dodge Animal Health. In March 2001, while remaining president and a member of the board, Essner replaced Jack Stafford as CEO. Stafford was quoted by PR Newswire as saying, "The appointment of Bob Essner as the next CEO of AHP provides for continuity of our strategic direction as a first-tier pharmaceutical company" (March 6, 2001). Essner undertook a complete reorganization of the company. On January 1, 2003, he replaced Stafford as board chairman.
GUIDED AHP THROUGH GROWTH AND SCANDAL
AHP grew under Essner's leadership, introducing new products and increasing its drug-manufacturing capacity. Although its nasal flu vaccine FluMist proved disappointing, the anti-depressant Effexor became AHP's biggest seller. The company's over-the-counter brands—including Advil, Centrum vitamins, Preparation H, and Robitussin cough suppressant—remained steady.
On the other hand, under Essner AHP was plagued by scandal and faced thousands of lawsuits. The company was forced to recall Duract, a short-term pain reliever, as well as a new rotavirus vaccine. The company settled thousands of lawsuits from women suffering side effects from the implantable contraceptive Norplant.
Most of the lawsuits faced by the company, however, involved the popular—but potentially lethal—diet drug known as fen-phen. In 1997, in the largest consumer drug recall to date, the U.S. Food and Drug Administration (FDA) yanked AHP's diet pills off the market. Court testimony indicated that AHP used temporary, undertrained employees to review and process adverse-effects reports and failed to notify the FDA of its actions. Furthermore the company had resisted the packaging of warnings with the drugs. Essner denied all charges but nevertheless instituted a new computer-tracking system for adverse-event reports. The Wall Street Journal quoted Essner as remarking, "We're going to fight the things that are wrong with diet-drug litigation tooth and nail, and we intend to win" (October 26, 2003). By 2004 the company had paid out $13 billion and set aside another $16.6 billion for diet-drug claims while continuing to struggle toward a final resolution. Having opted out of the original class-action settlement, some 78,000 people were eligible to sue Wyeth on individual bases.
RESPONDED TO SCANDAL WITH NAME CHANGE
The business practices of Wyeth-Ayerst and AHP had come into question, and the company was accused of putting its own interests, and those of its stockholders, above public safety. In March 2002 Essner changed the company's name to Wyeth, claiming that this name better reflected the company's increasing global presence, its emphasis on research-based pharmaceuticals, and its divestitures of other products, including herbicides, candy, food, household products, and medical devices. Most observers assumed that Essner was attempting to erase the public's association of AHP with fen-phen.
In the summer of 2002 the National Institutes of Health reported that Wyeth's top-selling hormone-replacement-therapy (HRT) drug Prempro increased the risks of breast cancer and heart disease. Sales of Wyeth's line of HRT drugs—known as Premarin and accounting for 14 percent of company revenue—fell. Essner told the Philadelphia Inquirer, "We believe that, once the media sensation subsides, hormone replacement therapies will remain an important part of women's health care" (July 24, 2002). Wyeth's HRT drugs also became a target of animal-rights groups because they were produced from the urine of pregnant horses. When Wyeth announced a cutback in Premarin production—an action that would send about 40,000 mares and foals to probable slaughter—animal-advocacy groups began a letter-writing campaign directed at Essner.
INCREASED RESEARCH AND DEVELOPMENT
Essner's growth philosophy focused on the development of innovative products; the company had previously licensed many more drugs than it discovered. Essner told the Wall Street Journal, "Innovation is the most important, scarcest, and most fragile asset in the industry today" (June 3, 2004). With 34 new drugs in the pipeline Wyeth invested more than $2 billion in research and development in 2002. In June 2003 Essner announced that he was spending an additional $100 million to investigate a single lead for an Alzheimer's vaccine. He also signed new partnership agreements with Japan's largest drug company, reinforcing his expansion into the world's second-largest pharmaceutical market.
In 2003, after introducing Prevnar, the only vaccine against meningitis in young children, Essner accepted the Prix Galien Suisse—the "Pharma-Oscar"—for the most innovative preventive therapy of the year. After the Centers for Disease Control and Prevention recommended that all children receive four doses of Prevnar before the age of 15 months, production could not keep up with demand.
Essner garnered both good and bad press in 2003. Wyeth was named one of the 100 Best Companies for Working Mothers by Working Mother magazine for the sixth consecutive year and was selected as a Workplace Model of Excellence by the National Healthy Mothers, Healthy Babies Coalition. However, along with CEOs from other drug companies, Essner informed Canadian companies that they could no longer buy drugs at wholesale prices for marketing to American consumers.
In 2004 Essner announced that beginning in 2006 Wyeth would introduce two new drugs per year. Since 2000, 12 new drugs per year had been moved into full development. In 2004 research spending increased more than 10 percent over the $2.1 billion spent in 2003.
See also entry on Wyeth in International Directory of Company Histories.
sources for further information
Hensley, Scott, "Wyeth Is Upbeat about Innovation at Its Drug Laboratories," Wall Street Journal, June 3, 2004.
Hensley, Scott, and Peter Landers, "Drug Companies Report Pain: Results for 3rd Quarter Diagnose Industry's Flagging Health," Wall Street Journal, October 26, 2003.
Loyd, Linda, "Wyeth's Profits Grew by 26 percent in 2nd Quarter," Philadelphia Inquirer, July 24, 2002.
"Robert A. Essner Named Next CEO of American Home Products Corporation," PR Newswire, March 6, 2001.