‘Win-win situation’: Pharma trade CEO resigns after clash with board

The unrest in the industry group comes as Democrats look to push through one of the most sweeping drug reform packages in a decade and underscore the complexity of leading a large board with different political goals and views on its mission.

There are a half-dozen members of BIO’s 120-member board, sometimes referred to as the “Gang of Six,” who have wanted the organization to be more assertive on issues such as opposing efforts to limit voting rights in Georgia and abortion after the Supreme Court decision. The decision of the court to cancel Roe v. Wade. Otherwise, some of them organized a letter pledging to cut ties with Russia after its invasion of Ukraine — and they wanted their trade association to make a strong statement about it, too.

At the Washington D.C. Hotel, a stone’s throw from the White House, Jeremy Levin — the immediate past chairman of the BIO board and CEO of Ovid Therapeutics — wanted to convey to his fellow board members, some of whom had undergone surgery or clinical trials in Russia, what they needed respond to the war.

At the meeting, he called the invasion the most significant act of aggression in Europe since World War II — and suggested that anyone who refused to end their business or investment in Russia could be seen as similar to the people who appeased the Nazis. they came to power in Germany, according to one of the six people in the room. Another person familiar with the conversation confirmed the account.

After debating the issue, McMurry-Heath ultimately declined to allow BIO to take a position, according to three people with knowledge of the meeting.

“Nobody wants to pounce on Russia in the middle of a BIO board meeting. There are too many other things, literally Rome is burning,” said a third person with direct knowledge of the meeting. At the time, Democrats in Congress were trying to restore their drug pricing package, which the industry saw as an existential threat.

“This is not an example of Michelle not running the board,” the person continued. “This is an example of how difficult it is to run this board.”

In an email to POLITICO, Levin said he has been consistent in his views on how the industry should approach Russia. repeating the promises made in the letter he helped write shortly after the invasion.

“As an industry that exists to protect and improve people’s health, I urge colleagues to reflect on the implications and consider what their respective companies and employees should do,” he said. “When I look at myself in the mirror, I usually ask myself: Do my actions reflect my values?”

McMurry-Heath declined to comment on the circumstances surrounding her departure. But in a statement to POLITICO, she said she was proud of what she accomplished at BIO.

“We have achieved many of the organization’s strategic priorities,” she said through a spokeswoman. “I was brought in at the start of the COVID-19 pandemic and have led the organization through perhaps the most challenging period in its history. Despite this, we have raised BIO’s political and social influence to its highest level in more than a decade, and strengthened its financial position by prudently dealing with the pandemic.”

The dispute over whether the industry group should take a hard line on Russia was just one of many behind-the-scenes disagreements between McMurry-Heath and a group of half a dozen influential BIO board executives who played a role in her hiring and her resignation, according to five people who know the situation.

POLITICO spoke with more than a dozen people, including current and former BIO employees, lobbyists and a health care executive, about the organization’s internal dynamics and the circumstances surrounding McMurry-Heath’s tenure and departure. All but four were granted anonymity due to the sensitivity of the personnel matter or fear of retaliation.

Ted Love, vice chairman of the BIO board, said the group “has had a change in executive leadership, but not a change in direction,” in a statement after POLITICO reached out to BIO and other board members for comment. “We look forward to all that BIO can achieve in the future in support of the biotech sector and the people and patients who benefit from biotech innovation and breakthroughs.”

The statement misspelled McMurry-Heath’s name, referring to her as McMurry-Heath.

In a subsequent statement, Lau called the description of a small number of CEOs who wield enormous influence — and McMurry-Heath’s departure came as a result of disagreements with them — an apparent “campaign of disinformation.”

Because of its size, “BIO’s executive hiring and transition process is extensive, fair, thorough and informed by independent outside experts. The idea that a small group of people can unilaterally do anything in such a large organization with an active board of directors is simply not feasible,” said Love.

McMurry-Heath remains an advisor to the group, according to a news release about the leadership change. But more details about her role are unclear. Rachel King, BIO board member and co-founder and former CEO of GlycoMimetics, has been named interim executive director while the association searches for a permanent replacement.

In June 2020, in the early months of the pandemic, a physician and former Food and Drug Administration official, McMurry-Heath became BIO’s executive director. The group’s first female and African-American leader, she was hired by Johnson & Johnson to transform the association.

“It’s a tough job with a divided industry and an unclear mission. She wasn’t a tinkerer — like, a real scientist and a real regulator — who wanted to really take this, in a sense, more seriously in terms of their simple policy objectives,” said a health industry executive who advised BIA. “It’s going to be a loss, and it’s going to blow up in their faces at some point because she’s going to be controlling them to some degree.”

Interviews with people familiar with the inner workings of the group put a different emphasis on the various factors that led to her resignation. They describe a combination of pressure from some BIO board members, McMurry-Heath’s difficult transition into the role and the early changes that were made, some layoffs or staff departures, and a review of her overall performance that some saw as targeted.

The association represents corporate giants, but also aims to be the voice of small and medium-sized companies outside of groups like the Pharmaceutical Research and Manufacturers of America, which has just 33 members and annual revenue of nearly $600 million. million — about seven times more than BIO.

“The fact that we have a lively debate on so many pressing issues in America is a strength, not a weakness, and that’s why we believe we’re in a great position to influence policy now and in the future,” said Lau in his statement.

Three people with knowledge of the group’s inner workings acknowledged that some of that dynamic existed before McMurray-Heath took the job, particularly because of concerns about then-President Donald Trump’s immigration policies. However, it gained momentum after her predecessor, former Republican congressman Jim Greenwood, left the group after leading it for 15 years.

“When you’re the president of a trade association with 1,000 member companies and a board of 120 people, you have to spend a significant amount of time reaching out to the board members, listening to the board members, respecting the board members — always knowing that you’re serving at their request,” Greenwood told POLITICO. “You earn your ability to stay in that position day in and day out.”

Three people with knowledge of the organization’s history said McMurry-Heath was not as experienced as Greenwood — a former politician — at managing board personalities. Two of them acknowledged that the lack of office work for employees and business trips for board leaders made it difficult to win allies.

Since McMurry-Heath’s appointment, the organization has experienced layoffs due to the pandemic and some staff turnover, the latter of which three people with knowledge of the matter said is similar to any personnel changes that occur during a leadership change. Four others, also close to BIO, said there were grievances about the departure of some high-ranking staff and how layoffs or layoffs were handled.

There was a general awareness of a difference of opinion among some board members about where the group should focus its attention, including Levin and Paul Hastings, the board’s chairman. The duo was among those who wanted BIO to be stronger on social issues, said five people familiar with the discussions.

Levine and Hastings referred all questions about board dynamics to a group spokesperson.

“All of this came to mind because you have a group of CEOs—not all of them, but remember, these are the people who hired her—I really believe that they wanted to turn BIO into a social change organization, beyond being a trade o “unification”, – said one of the people familiar with the events. “In that respect, she was in a no-win situation.”

Although Democrats passed an inflation-reduction law that would allow Medicare to negotiate drug prices, three people close to BIO said it did not contribute to her resignation.

Running a trade association can be difficult under ideal circumstances, but BIO’s broad composition, which includes companies from the pharmaceutical and agricultural sectors, makes it a particular challenge.

“On a good day, you spin. On a bad day, they all fall apart,” said a former BIO employee about the complex nature of running an organization and building consensus among members.

While large companies influence BIO, smaller companies have always been a force on the board because the association prides itself on being a platform for companies with fewer resources.

While the overall board has more than 100 members, there is a 21-strong executive committee, which the group has expanded over the past year to “ensure that the voices of companies of all sizes are heard when we make decisions,” it said in a statement Lava. According to him, Hastings initiated the expansion of the executive committee.

her exit for the first time reported a The Wall Street Journal, which described her as “on leave” caught most people by surprise, said three people familiar with the events. By Monday, the board of directors called and announced McMurry-Heath’s impending departure, the Journal reported and POLITICO confirmed.

“The executive committee of the board of directors has been pretty stealthy,” said an in-house lobbyist for one of the BIO member companies, “to be able to do something like this and keep it quiet.”

“We’ve seen an improvement in response, an improvement in advocacy materials and member engagement. Maybe she just needed another year to start seeing more tangible results,” said tenured lobbyist McMurry-Heath. “Maybe some of these council members are too close to that.”