Editor’s note: This piece is adapted from a story that first appeared in the Winter 2011/2012 issue of Carolina Pharmacy.
Fred Eshelman ’72 believes the school bearing his name has all the pieces in place to advance the field of pharmacy. So much so that this seasoned entrepreneur and businessman invested $100 million in the school to create the Eshelman Institute for Innovation, elevating his already-extraordinary generosity to historic heights.
“We must be relentless in our pursuit of pre-eminence, and I mean pre-eminence,” Eshelman said during the Dec. 3, 2014, event announcing his transformative gift. “This requires focus. It requires a dogged determination to be the best. We cannot get to the top and remain there without a combination of talent—and that’s both faculty and students—facilities and vision.”
Eshelman’s vision for what works in pharmacy began when he was a teenager. It continued through his education at UNC, and evolved over his many years of entrepreneurship.
‘That’s the job for me’
Born in High Point, N.C., Eshelman has worked since he was 13 years old. During high school, he worked in a drug store, mixing sodas at the fountain and ringing up over-the-counter medicines. When the store wasn’t busy, he’d go to the back to see what the pharmacist was doing. He was fascinated by the drugs and enjoyed watching the pharmacist compound medicines. One day, he asked the pharmacist how much he made. “He told me he made nearly $10,000 a year, plus a $500 bonus,” Eshelman said. “I thought, ‘Holy smokes, that’s the job for me.’”
After high school, Eshelman attended High Point University but eventually transferred to Carolina to enroll in chemistry. When he realized chemistry offered little financial reward, he remembered his high school job in the drug store and switched to pharmacy. Professional courses awakened his ambition, and he realized his passion for clinical pharmacy. Professors Steve Caiola and Fred Eckel selected him to join three other pharmacy seniors in interdisciplinary clinical training in the Duke University Medical Center’s Physicians Assistant Program. “No one had done that before,” Eshelman said. “Caiola and Eckel were forward thinking.” By joining Duke’s chief medical resident on rounds, Eshelman received an invaluable education in clinical pharmacy. “He taught us what would be important in terms of a clinical diagnosis,” Eshelman said.
Armed with a quality education and vital experience, Eshelman graduated from Carolina with his B.S. in pharmacy in 1972. He followed up the degree with a doctor of pharmacy from the University of Cincinnati in 1974.
Blind hogs and acorns
Eshelman shares the same educational credentials as many pharmacy graduates, so how has he climbed so high up the professional ladder while managing to stay grounded? He capitalized on his strengths and recognized his weaknesses.
Eshelman is also defined by his introspection—his ability to honestly appraise what he knows and what he doesn’t.
In 1985, he started PPD as a one-man consulting firm, fueled by confidence in his education and experience.
“It’s so trite—but follow your dreams,” Eshelman said. “Give it a shot. What have you to lose? If you don’t try it, you’ll wake up 20 years later and say, ‘I can’t believe I didn’t try that.’”
Hire-by-hire, Eshelman fleshed out an organization. “We started off small, and I intended to stay small,” he said. “I didn’t want to do sales and marketing. I only wanted to take the high-class contract research business that came in the door.”
In retrospect, the growth of PPD looks like a straight line. It wasn’t. “People think you’re this great visionary—you had this grand plan,” Eshelman said. “It’s such baloney, at least in my case. Yes, we were adaptable. Yes, we changed our business plan. But was it because we were geniuses? Not at all. Even a blind hog can find an acorn now and then.”
Now a global contract research organization (CRO), PPD boasts some 13,000 employees who provide drug discovery, development and post-approval services as well as compound partnering programs.
Knowing his business
As PPD grew, so did Eshelman’s self reflection, and it was returning an uncomfortable message. “I was scared to death,” he said. “I realized I didn’t know squat about managing a large company.”
“It’s so trite—but follow your dreams. Give it a shot. What have you to lose? If you don’t try it, you’ll wake up 20 years later and say, ‘I can’t believe I didn’t try that.’”
— Fred Eshelman
He enrolled in the Owner/President Management Program at the Harvard Business School. Three weeks a year for three years, he and his fellow students plowed through case study after case study to hone their skills in business, finance, accounting and marketing. “It was very applied,” Eshelman said. “It was for people who knew the subject matter of the businesses they were in but didn’t know business, and I’d had no business training.”
PPD flourished. “Could I have done some things better? Of course,” Eshelman said. “But if you second-guess decisions—if you say, ‘I wish I’d done this or that’—well, you didn’t. And if you had, you don’t know how it would have turned out.”
As a small business owner, Eshelman recognized the value of cash. “We managed very conservatively,” he said. “We had plenty of cash to take advantage of opportunities, and when we hit a rough spot, we had cash to ride it out. Cash is king.”
He sought the most promising, talented colleagues in his field. “The biggest trick of all is surrounding yourself with people who are smarter than you,” he said. “Look for bright people who are willing to work hard, and bring them with you.”
For Eshelman, one of the most fulfilling aspects of leadership is watching younger colleagues grow professionally (see related story on his mentoring relationship with Laura Bonifacio). Before PPD, he held many jobs traditionally held by physicians. “People took chances on me,” he said. “It’s part of your mission as a leader to bring people along behind you.”
In June 2010, PPD spun out Furiex Pharmaceuticals, Inc., a drug development company focusing on treatment for gastroenterology disorders. In December 2011, PPD was sold to two private equity firms for $3.9 billion, making it the largest buyout of a CRO in history, according to the Triangle Business Journal.
In May 2014, a unit of Forest Laboratories bought Furiex for an estimated $1.46 billion.
Go big or go home
In 2003, Eshelman gave $20 million to the School of Pharmacy. At the time, it was the third-largest single commitment in the University’s history. It provided scholarships to Pharm.D. students, enriched and expanded graduate student education, created graduate student fellowships and supported faculty development in teaching and research. He followed that gift with more generosity:
» In 2008, he gave $9 million for cancer research;
» In 2012, he gave $2.5 million for pharmacy education, pharmacy practice, research and training;
» In 2014, he gave $3 million to support the school’s drug-discovery center.
“If you’re going to do something to make a positive impact, then get on with it,” Eshelman said. “I’ve been so fortunate, and the school is a big part of my success. Giving back is the right thing to do.”
Confidence in leadership
When Bob Blouin, dean of the school and the Vaughn and Nancy Bryson Distinguished Professor, first came to the school in July 2003, Eshelman met with him. “I thought, this guy is going to make this thing into a huge success,” he said. “So like in business, you bet on people, and I bet on Dean Blouin big time.”
In announcing this most recent gift, Eshelman reiterated his confidence in Blouin, along with the entire leadership of the University. “When I look to make an investment, I look at the underlying thesis, I look at the technology,” he said. “Equally important, if not more so, is leadership. We now have that leadership. … I think that we truly have the prescription for success.”