Former chairman, president, and chief executive officer of AdvancePCS
Born: 1956, in Abilene, Texas.
Education: Abilene Christian University, BS, 1978.
Family: Son of a physician; married (wife's name unknown).
Career: AdvancePCS, 1987–2004, chairman and chief executive officer; president, 2003–2004.
Awards: Named one of the 40 best Dallas-area executives under 40, Dallas Business Journal , 1991.
■ David Dean Halbert was cofounder, chairman, president, and chief executive officer of AdvancePCS, a pharmacy benefit management service company. Halbert led the company from its modest beginnings in 1987 to a multibillion-dollar industry leader in the early 2000s. Halbert's success has been likened by some to that of the business greats Ross Perot and Bill Gates, "founding executives who created something from nothing" ( Fort Worth Star-Telegram , September 10, 2003). AdvancePCS was acquired by Caremark Rx in 2004, and Halbert left the company.
Raised in the western Texas town of Abilene, Halbert had early aspirations to make it big in the business world. His grandfather had become rich on Texas oil, and his father was a prominent Abilene physician who led the building of one of the city's hospitals. His father said that young Halbert's ambitions started in high school: "David Dean tells me, 'Dad, if you're going to do something, you may as well do something big because it doesn't take any more time than something smaller…. If you're going to spend your time on something, spend it on something worth your time" ( Abilene Christian University Alumni Profiles , June 11, 2004).
Halbert attended Abilene Christian University, graduating with a BS in 1978. His Christian upbringing and education became a guiding force in his personal and professional life: "I feel a stewardship responsibility to use my resources to the best of my ability…. Nothing any of us have is the result of what we've earned. It's all a gift from God. Christ taught that to those whom much has been given, much is expected. I've learned to appreciate that teaching through the success I've experienced" ( Abilene Christian University Alumni Profiles , June 11, 2004).
After completing his education, Halbert began working in the oil-and-gas industry, as did his younger brother, Jon. In the mid-1980s, however, the brothers took an interest in the rising trend of home healthcare and began looking for investors to start a mail-order pharmacy. (One of the original investors was George W. Bush, who would later become president of the United States.) Advance Paradigm was formed in 1987, and David Halbert became chairman and chief executive officer.
The home prescription business was wildly successful. In 1983 the industry as a whole saw $50 million in business, growing to over $2.3 billion by 1992. By providing clients with a 25–30 percent discount on medications for chronic illnesses over that provided by retail pharmacies, Halbert's company saw business triple each year from 1989 to 1991. In 1991 the brothers were named to Dallas's "40 under 40" list, featuring the city's top 40 executives under the age of 40.
Halbert led the company through rapid growth in the 1990s. From 1987 to 1999 Advance grew at a compounded rate of 103 percent. By 1993 the company had more than 1.5 million members. Halbert began to look outside the company to fuel Advance's ongoing growth and diversify its services. Acquisitions of Paradigm Pharmacy Management in 1993 and Foundation Health Pharmaceutical Services in 1999 gave the company solid footing in the pharmacy benefit management industry and increased the member count to 27 million. Other innovations in the 1990s included initiating diseasemanagement services, launching an online health portal called BuildingBetterHealth.com, and starting an online drugstore.
In 1995 Halbert said of his goals for the company: "We'd like to be the largest in the country, and fully intend to stick to that track. We might go public. We've certainly considered that in the past" ( Dallas Business Journal , July 21, 1995). The company hit Wall Street in October 1996 with its initial public offering; opening at $9 per share, the stock value rose quickly, hitting a high of $43.50 and settling at around $27 two years after the IPO. Said one analyst, Ken Miller of Hambrecht & Quist: "The company is well-managed and headed by people with a track record of making money. Advance Paradigm is a consistent financial performer" ( Dallas Business Journal , October 23, 1998). By 2000 the company was managing 165 million pharmacy claims and $6 billion in drug expenditures per year.
Halbert set his sights higher in 2000 with the purchase of PCS Health Systems from Rite Aid Corporation, to establish AdvancePCS, the nation's largest pharmacy benefit management company. Analysts called it "a home run for Advance Paradigm" ( Dallas Morning News , July 12, 2000). In 2001 Halbert collaborated with two of the company's competitors, Express Scripts and Merck-Medco, to establish RxHub, a prescription computer network that would link doctors, pharmacies, and insurers.
In 2001 President George W. Bush came under fire for his business connections with Halbert in the mid-1990s. Halbert and his family had contributed funds to several of Bush's campaigns. Bush had sold off his stocks in Advance Paradigm in 1998, to avoid a conflict of interest. The two had remained friends, however, and Bush had approached Halbert in 2001 to help write a controversial proposal to offer drug discount cards to seniors. Many felt the move was inappropriate, however, because AdvancePCS stood to benefit from the program if Medicare endorsed the company to issue the cards. David Sirota, author of The Progress Report , was quoted as saying, "The White House is supposed to be the people's house, not the drug industry's corporate headquarters. The president needs to explain why he allowed his longtime Texas crony and benefactor to help write key pieces of Medicare legislation that guarantees nothing for seniors but billions for his friend's business" ( Boston Globe , December 12, 2003). The Medicare Prescription Drug Discount Card Program was enacted into law on December 8, 2003.
The management at AdvancePCS announced in the fall of 2003 that the company had been acquired by Caremark Rx, a pharmaceutical services company, in a $5.6 billion deal, under which Halbert would leave his post and most likely be retained by the company as a consultant. The deal closed in March 2004, but not before AdvancePCS experienced its 37th consecutive quarter of record earnings, up 22 percent from the prior quarter.
"David Dean Halbert ('78)," Abilene Christian University Alumni Profiles , June 11, 2004, http://www.acu.edu/campusoffices/development/programs/coba/alumni/halbert.html .
Fairbank, Katie, "Texas Firm Buying Rite Aid Unit," Dallas Morning News , July 12, 2000.
"40 under 40," Dallas Business Journal , September 27, 1991, pp. 21–32.
Fuquay, Jim, "AdvancePCS, Caremark Rx to Merge Pharmacy Benefit Management Operations," Fort Worth Star-Telegram , September 4, 2003.
Mabray, D'Ann, "Drug Benefit Managers Try for Part of Health Care Market," Dallas Business Journal , July 21, 1995, pp. 5–6.
Mason, Todd, "Bush Connection Raises Questions on AdvancePCS' ties with Harken Energy," Fort Worth Star-Telegram , August 18, 2002.
Schnurman, Mitchell, "A Parachute Is Worth Its Weight," Fort Worth Star-Telegram , September 10, 2003.
Tanner, Lisa, "Advance Paradigm Moving into Richardson Offices," Dallas Business Journal , October 23, 1998, p. 11.
Washington, Wayne, and Susan Milligan, "Bush Ally's Firm Vies for Medicare Cards," Boston Globe , December 12, 2003.
—Stephanie Dionne Sherk