Updated from 8:15 a.m. ET with the addition of Mark Thompson of Concordia International.
Elizabeth Holmes of Theranos is the Worst Biopharma CEO of 2016.
Even with a crowded field of awful CEO candidates this year, no one else in health care -- or any industry for that matter -- could touch Holmes' loathsome mix of arrogance, incompetence and duplicity.
Holmes is the first female CEO to be singled out for this (dis)honor since I started highlighting biotech executive misbehavior in 2009. Theranos is a privately held blood-testing firm, which would normally put Holmes beyond the reach of my focus on executives running publicly traded biotech and drug companies.
Exceptions, however, needed to be made. Holmes' performance as CEO of Theranos was so irredeemably atrocious that it couldn't be contained within a single calendar year.
The deeply sourced investigative reporting of Wall Street Journal reporter John Carreyrou revealed Theranos' finger-prick blood-testing technology to be a sham that put patients at risk. Holmes' compelling backstory -- Stanford University dropout who turned a simple idea into a billion-dollar Silicon Valley startup -- was a myth. Unicorns really are make-believe.
Let's take a look at the other super-bad CEOs of 2016.
Michael Pearson, Joe Papa -- Valeant Pharmaceuticals (VRX)
Pearson won the title of Worst CEO in 2015, so I could have cut him some slack this year.
Pearson was still running Valeant in March when the beleaguered, price-gouging specialty pharma company reported dismal financial results, cut the 2016 earnings forecast, disclosed creditor problems because of bloated debt, and made a $600 million "typo" that overstated projections for future profits.
The value of Valeant shares plunged by half and Pearson was fired soon after.
Papa took over for Pearson in May but has not fared any better. Valeant's stock price has dropped by another 50% due to the continued deterioration of the company's core business units, some of which may now be sold for pennies on the dollar just to meet debt payment obligations.
Papa was hired to turn around Valeant, but so far, he looks to be driving the company further into the ground.
Tim Wentworth -- Express Scripts (ESRX)
Once upon a time, tobacco companies funded a public relations campaign to convince Americans that smoking cigarettes was good for their health. Today, a similar spin job is underway to portray pharmacy benefit managers like Express Scripts (the largest PBM in the country) as the good actors in the fight over drug prices.
Wentworth, the CEO of Express Scripts, and his sidekick, Chief Medical Officer Steve Miller, go to work every day to prevent consumers from being fleeced by evil, price-gouging drug companies.
It's a compelling story well told. Too bad it's not true.
In their middleman role representing insurers and employers, PBMs like Express Scripts negotiate lower prices largely by demanding rebates -- discounts off the list price of a drug -- from manufacturers. If a drug company refuses, Express Scripts removes their products from its formulary. The drug companies comply because they can't afford to be frozen out from the millions of consumers Express Scripts represents.
What happens to that rebate?
Express Scripts pockets a big chunk of the money as profit. How much? No one really knows, because Express Scripts demands secrecy in its dealings with drugmakers over pricing and rebates. That's on purpose, of course, lest people discover that higher rebates demanded by PBMs can contribute to higher, not lower, drug prices.
When a mobster demands and receives protection money from a local business owner, it's extortion. When a PBM demands and receives a rebate from a drug manufacturer, it's perfectly legal and hailed as a victory against rising drug costs.
Only in America!
Kapoor is a health care billionaire, founder and chairman of Insys. He's also acted as Insys' CEO since November 2015 following the resignation of Michael Babich.
In December, federal prosecutors indicted Babich and five other former Insys employees on racketeering changes. The criminal complaint alleged Babich and the other Insys employees bribed doctors to prescribe Subsys, a spray form of the powerful opioid fentanyl. Subsys is approved to treat extreme pain in cancer patients, but Insys allegedly bribed doctors to prescribe the dangerous, highly potent painkiller to patients that did not have cancer.
The aggressive off-label marketing scheme helped Insys generate $330 million in Subsys sales last year. Some of the patients who should not have been prescribed Subsys died.
Kapoor has not been charged with any crimes connected to Insys. In a recent Forbes profile published before Babich's indictment, Kapoor claims not to have any knowledge of what was happening inside Insys, the company he founded.
"I think what happened with Insys is that we grew very rapidly," Kapoor told Forbes. "We have over 500 employees. I think a lot of things in a business, any business, especially when you have a fast-growing company, you're in a very dynamic situation. Every day there is some decision that needs to be made. Mike [Babich] did a good job. Yeah, we have some issues with DOJ. But I think operationally, I felt that Mike may not be able to handle that with so many things happening."
I need a shower to wash off the stink after reading that quote, how about you?
Kapoor's place on this year's Worst CEO list is well-deserved.
I could have expanded this year's Worst CEO list to include these contenders:
Mark Thompson of Concordia International (CXRX) . A D-list CEO (now former) who tried to create a Valeant clone -- and failed badly.
Hans Bishop of Juno Therapeutics (JUNO) for falling well out of the CAR-T race against Novartis (NVS - Get Report) and Kite Pharma (KITE) . Two clinical holds in a single clinical trial because of unexplained patient deaths gets you on this list.
In 2015, Bristol-Myers Squibb (BMY - Get Report) CEO Giovanni Caforio was being hailed for the huge success of Opdivo, the company's breakout cancer immunotherapy. But in 2016, Bristol-Myers stumbled badly when a poorly designed clinical trial wiped out Opdivo's chance to expand into the lucrative treatment market for newly diagnosed lung cancer patients. The Opdivo setback and damage it did to Bristol's stock price puts Caforio on this list.
Chris Anzalone of Arrowhead Pharmaceuticals (ARWR - Get Report) for ditching the company's entire drug pipeline and starting over from scratch. Better to return what cash remains to shareholders and find another job, Chris.
Eddie Gray of Dynavax (DVAX - Get Report) . Hiding FDA concerns about the company's hepatitis B vaccine from shareholders before the vaccine was rejected -- for the second time -- was not a wise career move.