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UnitedHealth Group announced the surprise exit of CEO Andrew Witty on Tuesday and suspended its 2025 forecast due to surging medical costs, sending its shares down more than 10% premarket.
UnitedHealth said Tuesday that Chairman Stephen Hemsley will become CEO, effective immediately.
Hemsley was UnitedHealth Group CEO from 2006 to 2017. He will remain chairman of the company’s board. Witty will serve as a senior adviser to Hemsley.
UnitedHealth said that it suspended its 2025 outlook as medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare were higher than expected.
UnitedHealth anticipates returning to growth next year.
Under Witty, UnitedHealth has met with a series of challenges in the past year - including the murder of its top health insurance executive, Brian Thompson, last December.
Earlier in 2024, it was the target of a cyberattack at its tech unit that shut the U.S. healthcare processing system for days, affecting 200 million Americans.
Witty was also at the helm in April, when the company posted its first earnings miss since the 2008 financial crisis and lowered its annual outlook citing higher-than-expected medical costs and "unanticipated changes" in its Optum business that impacted planned 2025 reimbursements.
On Monday President Donald Trump delivered a blow to the private-sector middlemen who negotiate U.S. drug prices in his executive order on drug pricing, saying he would cut them out as part of a goal to bring the U.S. in line with other countries.
The news drove their shares down even as pharmaceutical stocks rose in investor relief about the broad order. "
We're going to cut out the middlemen and facilitate the direct sale of drugs at the most favored nation price, directly to the American citizen," Trump said during a press conference.
The U.S. pays about three times more than other nations for drugs, and Trump's wide-reaching executive order directs pharmaceutical companies to charge similar prices in the U.S. and Europe.
The order says its health department will establish a mechanism for patients to buy more drugs directly from manufacturers.
Shares of CVS Health, UnitedHealth Group and Cigna fell 5%, 0.5% and 6%, respectively after the news
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