Lilly White House Connections On Display; Tobias To Oversee AIDS Fund

Former Lilly CEO Randall Tobias will oversee the Bush Administration's new fund to treat and prevent HIV in developing countries, President Bush announced July 2.

With the title of coordinator for international HIV/AIDS assistance at the State Department and the rank of ambassador, Tobias "will be responsible for overseeing all U.S. international HIV/AIDS assistance and coordinating the efforts of various agencies and departments that deliver it," the White House said.

Tobias' position was created by the U.S. Leadership Against AIDS, Tuberculosis and Malaria Act (HR 1298), which authorizes funding for the President's Emergency Plan for AIDS relief.

The bill was signed into law May 27 (¹ (Also see "Global HIV/AIDS Bill Clears Senate; Kennedy Pricing Amendment Fails" - Pink Sheet, 19 May, 2003.), p. 32).

Tobias will have the authority to "transfer and allocate funds among executive branch agencies and to contract with and provide grants to nongovernmental organizations," the White House explained.

Bush called on the Senate to confirm the former Lilly head quickly, and said Tobias "has a mandate directly from me to get our AIDS initiative up and running as soon as possible."

Tobias' tenure as CEO of Lilly in the mid-1990s was a relatively brief coda to a much longer career in the telecommunications field.

Tobias spent 30 years at AT&T, moving up to vice chairman of the company before stepping in to head Lilly in 1993.

His appointment as CEO of the drug company came during a difficult period for Lilly. He replaced Vaughn Bryson just 18 months after Bryson was selected to succeed Richard Wood, who had served for 18 years. Tobias had been an outside director of Lilly since 1986, but otherwise had no direct experience in the drug industry.

Tobias served as CEO for five years, turning over the reins to pharmaceutical division President Sidney Taurel in 1998.

Tobias is credited with seeing the company through a difficult transition period, although his one major strategic move - the $4.4 bil. acquisition of the pharmacy benefit management company PCS - did not pay off.

Lilly is not directly involved in the HIV market; in fact, Tobias oversaw the unwinding of Lilly's historic role as an antibiotics company and its transformation into a neuroscience business, focused first on the antidepressant Prozac and now on the antipsychotic Zyprexa .

Two themes of Tobias' tenure at Lilly, however, are relevant to his new position. First, Tobias made a priority of transforming Lilly into a "truly global" company. Although the U.S. market remains by far Lilly's most important, Tobias spent considerable energy building the company's presence in international markets.

Second, Tobias stressed the importance of global public policy debates and pledged a more active role for Lilly in shaping the image of the pharmaceutical industry. In the U.S., Taurel represented Lilly on the board of the Pharmaceutical Research & Manufacturers of America during most of Tobias' tenure.

Tobias' appointment to head the international HIV fund further highlights Lilly's close ties to the Administration.

Another former Lilly exec, Mitch Daniels, served as Bush's first head of the Office of Management & Budget. He resigned this spring to run for governor of Indiana (² (Also see "Lilly Remains Attentive To Corporate Affairs; Strattera Head Nobles Named VP" - Pink Sheet, 2 Jun, 2003.), p. 13).

Bush's announcement of Tobias to coordinate funding through HR 1298 comes just prior to a Presidential visit to Botswana, South Africa, Nigeria, Senegal and Uganda, where he will highlight the Administration's efforts on the HIV problem in Africa.