- An Insider analysis of 182 biotech and pharma companies revealed that 92% of CEOs are men.
- The lack of diversity in the drug industry’s CEO ranks costs women an estimated $532 million a year.
- Drug industry CEOs and other experts said equity is achievable if companies make it a priority.
- This article is part of a series called “The Cost of Inequity,” examining the hurdles that marginalized and disenfranchised groups face across a range of sectors.
The top ranks of the biotech and pharmaceutical industry remain overwhelmingly male, an Insider analysis has found.
Even as biopharma executives have paid more attention to gender inequity, men still account for 92% of the industry’s CEO roles, according to Insider’s review of nearly 200 leading drug companies. That percentage is unchanged since a similar analysis by the trade publication BioPharma Dive in 2018.
The dearth of women in CEO roles costs women about $532 million in forgone annual compensation, according to Insider’s analysis, but experts said the inequity takes an even broader toll on the companies and society.
Extensive research has shown that companies with diverse executive teams are likely to perform better financially than companies lacking in diversity. Companies with policies that encourage diversity are also likely to be more innovative.
“The economic toll it takes on our industry is ridiculous,” said Laurie Cooke, the CEO of the Healthcare Businesswomen’s Association.
Lack of progress in CEO ranks is ‘pitiful,’ revealing persistent challenges in achieving gender equity
Insider analyzed companies included in the S&P Biotechnology Select Industry Index, as well as 14 publicly traded pharmaceutical giants not in the index. Out of 182 CEOs included in Insider’s review, 167 were men and 15 were women.
The average 2019 CEO compensation was $7 million, according to BioPharma Dive’s 2020 analysis. Using that figure, Insider estimated that male CEOs bring in a total of $1.2 billion in annual compensation, while $105 million goes to female CEOs.
If the CEO seats were equally split between men and women, $637 million would go to female CEOs. That means women are missing out on $532 million each year, Insider’s analysis found.
“The statistics are pitiful because they show that we aren’t breaking through yet,” said Bonnie Anderson, the former CEO of genomic diagnostics company Veracyte, in an April 1 interview while she was still leading the biotech.
The problem extends beyond the CEO ranks. Each rung up the corporate ladder sees fewer women.
“We still have an issue at every step of the way,” Helen Torley, the CEO of the biotech Halozyme, said.
Data from the biotech industry trade group BIO released in June showed the industry skewed slightly male. A survey of 100 companies by BIO found 47% of all workers were women and 53% were men overall. But the proportion of women shrinks further up the ladder, to 31% of executives and 23% of CEOs.
BIO set industry-wide goals in 2018 on gender parity, aiming to have women make up 50% of company leadership and 30% of board seats by 2025. The group didn’t set a goal for the CEO position and hasn’t released an updated version of the report. BIO’s latest report didn’t gather enough data to evaluate gender representation at the board level.
While the trade group has a role to play in improving the industry’s diversity, Torley said the primary responsibility falls to company leaders.
“BIO can talk about that and appeal to the heart and the mind, but the next step comes down to boards and CEOs spending more time prioritizing this,” she said.
Woman-led biotechs show equity is achievable when made a priority
Despite the lack of progress in the CEO ranks over the past few years, several women leaders said they were optimistic. The problem of too few women in positions of power can be fixed if companies make the effort, they said.
“If you identify and adjust the systemic issues, these are not crazy complicated,” Cooke said. “They are pretty straightforward. If you fix the systemic issues, you will see movement. This is not something that is out of reach.”
Woman-led biotechs like Halozyme and Veracyte are prime examples of companies prioritizing gender diversity.
Torley said 45% of Halozyme’s employees at the senior director level and higher are women. For Veracyte, which Anderson cofounded in 2008, almost 60% of all employees are women and nearly 40% of leaders at the vice president level or higher are women, she said.
Both CEOs, as well as Dr. Diana Brainard, the CEO of AlloVir who was previously a top executive at Gilead Sciences, highlighted the importance of CEOs taking the lead on diversity measures. Once those priorities are set, and diverse hires are made, it starts its own virtuous cycle of attracting more diverse talent to the company.
Torley said CEOs should analyze their own talent funnel, examining each rung to see if there’s “a systematic dropoff in diversity in the people who are making it to the next level.”
Building a company culture that values diversity
Before joining as AlloVir’s CEO in May, Brainard said in an April interview that she was already mulling ways to drive more diversity at the company. She relinquished a seat on the biotech’s board of directors in April, so she said she’ll be sure to interview diverse candidates when filling that seat.
Longer term, she plans to build a culture that values all forms of diversity by speaking up frequently about the value of it.
“It can’t be underestimated how important it is for someone like the CEO and then others around the company to talk about diversity and the value of it, and to show it through actions and hiring principles,” she said.
Venture-capital firms can also play a role in driving diversity in leadership at companies they invest in.
Abbie Celniker, a partner at Third Rock Ventures, a Boston venture capital firm that invests in biotech startups, said the firm is deliberate about including more women on its founder and investor syndicates, as well as the management teams and boards of its portfolio companies.
Some companies are doing a great job at building diverse teams, but others need a “kick,” she said.
Celniker, like other experts, acknowledged that it’ll take time to see real change at the CEO level.
“The biggest challenge that we have is people becoming complacent or bored and they forget about it,” she said. “So the voices have to stay loud and we have to keep talking about it and it has to be something we’re patient enough to start to see the momentum, and then it takes off by itself, but this is not going to be a quick fix.”