MCKESSON HBOC: Earnings Snafu Shakes up Management
Following the discovery that accounting irregularities "were a deliberate attempt to inflate" HBO & Company's sales, McKesson HBOC Inc. yesterday ousted its chair, Charles McCall, fired executives and accepted resignations from CEO Mark Pulido and CFO Richard Hawkins, the New York Times reports. Alan Seelenfreund, McKesson's nonexecutive chair, said, "These improprieties were intentionally kept from the due diligence process when McKesson acquired HBO. I can certainly say we overpaid substantially for HBO as we know it now." The imbroglio was reflected in yesterday's stock, as McKesson's shares fell 6.6% to $33.7 per share. Seelenfreund did not indicate whether McKesson would "push for a federal investigation" (Morrow, 6/22). John Hammergren, president of the company's supply management unit, and David Mahoney, president of pharmaceutical services, will serve as co-CEOs, and Controller Heidi Yodowitz has been named CFO. "These changes reflect our need to move the company forward as quickly as possible," said Seelenfreund, adding, "Under the circumstances, strong leadership is essential to this effort" ( AP/San Diego Daily Transcript, 6/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.