Merck has elected Paul Diaz to its board of directors. The pharmaceutical group announced the appointment from its Rahway headquarters in New Jersey, and the new director takes his seat at the start of November. He will stand for election by shareholders at the annual meeting in May of next year.
Diaz is a managing partner at Cressey and Company, a private investment firm focused on healthcare. He was previously president and chief executive officer of Myriad Genetics, the molecular diagnostics company, and before that president and chief executive of Kindred Healthcare, a Fortune 500 healthcare services group.
He also sits on the board of Centene Corporation, the managed care company, and holds trustee roles at Johns Hopkins Medicine and on the Board of Visitors of the Georgetown University Law Center. He holds a degree in finance and accounting from American University and a juris doctor from Georgetown University.
Rob Davis, Merck's chairman and chief executive officer, said the company was pleased to welcome the new director to its board. With his arrival the board will consist of fourteen members.
The appointment fills a particular gap rather than adding generic healthcare experience. Merck's board already carries deep scientific and commercial pharmaceutical expertise, which is what a research driven drugmaker would be expected to have. What Diaz brings is the payer and provider side of the same industry: managed care through Centene, hospital and post acute services through Kindred, diagnostics through Myriad, and the investor's view of all three through Cressey.
That matters because the commercial pressure on large pharmaceutical companies increasingly comes from the people who pay for medicines rather than from the regulators who approve them. A director who has run businesses on the purchasing side of that relationship, and who has sat on a managed care board, is positioned to tell the company how its pricing and access decisions look from the other side of the table.
The combination of an operating career and a private equity seat is also worth noting. Executives who move from running companies into investing tend to bring a sharper view of capital allocation and of which assets are worth keeping, which is a live question for a group of Merck's size as it manages the patent cliff facing its largest product.
Merck is listed on the New York Stock Exchange. The company did not name a committee assignment for the new director, which is normal at the point of appointment and usually settled at the first board meeting after a director is seated.
