A coalition of 30 investors representing more than $1.3 trillion in assets is calling on 10 opioid distributors and manufacturers to examine how they are responding to business risks related to opioids.
“The opioid crisis has already taken many lives and is a blight on the pharmaceutical industry,” said Denise L. Nappier, Connecticut treasurer, principal fiduciary of the Hartford-based $34 billion Connecticut Retirement Plans & Trust Funds, and a member of Investors for Opioid Accountability, in a news release Monday. “It is imperative that independent board chairs and directors of companies that manufacture and distribute opioids fortify their leadership roles in protecting shareholder interests. This means addressing — and mitigating — the risks associated with reputational harm, escalating fines and mounting legal costs arising from the toll that misuse of opioids is causing nationwide. Of equal importance is the need for the companies to explore ways to strengthen their opioid risk management programs as a best practice for promoting long-term shareholder value and the well-being of the communities they rely on for business.”
Scott M. Stringer, New York City comptroller and fiduciary for the $170.6 billion New York City Retirement Systems, added:
“This is a national emergency that is devastating lives across our country. Questionable practices by pharmaceutical companies have only exacerbated the crisis, exposing those companies to legal and regulatory scrutiny as well as increased reputational risk. As a result, strong governance reforms are absolutely essential.”
The 10 companies that will receive shareholder proposals in the 2018 proxy season are McKesson Corp., Cardinal Health, AmerisourceBergen Corp., Depomed Inc., Endo International PLC, Insys Therapeutics Inc., Johnson & Johnson, Mallinckrodt Pharmaceuticals, Mylan and Pernix Therapeutics, said a spokeswoman for the UAW Retiree Medical Benefits Trust, the group’s co-organizer, in an email.
The coalition’s efforts expand on an earlier shareholder campaign for accountability at pharmaceutical companies that was launched by the International Brotherhood of Teamsters and the treasurers of California, Illinois, Pennsylvania, West Virgina and at opioid distributors this year and resulted in McKesson launching an investigation into its opioid-related business practices, separating the roles of CEO and board chairman when the current CEO retires, and committing to reviewing its pay practices, which was rejected by 73% of investors in 2017 following issues with the company’s opioid distribution practices, the news release said.
Investors for Opioid Accountability was formed in July and is led by the $55 billion UAW Retiree Medical Benefits Trust, Ann Arbor, Mich.; and Mercy Investment Services, the socially responsible asset management program for the Sisters of Mercy and its ministries. Other members include the $215.3 billion California State Teachers’ Retirement System, West Sacramento, and $13.8 billion Ohio School Employees Retirement System, Columbus.
“McKesson delivers lifesaving medicines to millions of Americans each day and is committed to maintaining — and continuously enhancing — strong programs designed to detect and prevent opioid diversion within the pharmaceutical supply chain,” a McKesson spokeswoman said in an email. “This complicated, multi-faceted public health crisis cannot be solved by any one participant. It needs to be addressed through a comprehensive approach that includes the doctors, patients, pharmacists, insurance companies, government payers (such as Medicaid and Medicare), distributors, manufacturers, law enforcement and regulators. We remain committed to engaging with all who share our dedication to acting with urgency to address this epidemic and working together to end this national crisis.”