AmerisourceBergen shareholders reject opioid crisis proposal
Accountable for Opioids?
While the majority of shareholders of AmerisourceBergen (ABC), the large Philadelphia-based drug wholesaler, rejected a proposal last Thursday that would have forced the company to “report steps taken to manage the financial and reputational risks associated with the opioid crisis,” the proposal did have the support of many independent shareholders, according to an article by Ed Silverman in Pharmalot.
At ABC’s annual shareholders’ meeting at the Ritz-Carlton resort in Naples, Florida, 62 percent of independent shareholders voted in favor of the proposal for the company to define the ways in which it has managed financial risks in the face of lawsuits and a congressional investigation into the role of drug distributors in the opioid epidemic. However, insiders, including the Walgreen drug chain that owns 26 percent of ABC’s stock, enabled the rejection, according to Investors for Opioid Accountability, a coalition of investors that submitted the proposal. These investors included the Teamsters union, the United Autoworkers Retiree Medical Benefits Trust, the Connecticut Retirement Plans and Trust Funds, the Sisters of St. Francis of Philadelphia and Trinity Health.
ABC’s board of directors encouraged shareholders to reject the proposals, calling them “unnecessary,” “vague,” “misleading” and “overly prescriptive,” according to an article by Eric Eyre in the Charleston Gazette Mail. A group of 43 institutional investors asked for “independent board oversight and stronger disclosure practices that would show whether the company ‘clawed back’ executive pay for misconduct,” the article said. Board members told shareholders before the vote that they are “actively engaged in overseeing AmerisourceBergen’s efforts to help combat prescription drug abuse.”
Recently, the U.S. Justice Department announced that it is establishing a task force to crack down on opioid manufacturers and distributors and hold them accountable for illegal practices. Several major drug wholesalers – including AmerisourceBergen, and competitors McKesson and Cardinal Health -- have been subjected to the possibility of hundreds of lawsuits filed by cities and counties all over the country to “recoup costs related to the opioid epidemic,” Eyre’s article said. As a result, the Justice Department has filed a “statement of interest” in support of the cases, which have been consolidated.
Last month, the U.S. House Energy & Commerce Committee sent letters to the three companies, requiring that they turn over documents and answer questions about their shipments to West Virginia. ABC paid the state of West Virginia $16 million in January 2017 to settle a lawsuit saying that the company neglected to “report and block suspicious orders of prescription pain pills across the state.” While ABC denied any wrongdoing, the company shipped more than 132 million hydrocodone and oxycodone pills to West Virginia between 2007 and 2012, the article said.
West Virginia is being used as an example, because it has the highest drug overdose death rate in the country. A recent study by the American Enterprise Institute estimates that this public health crisis costs West Virginia an estimated $8 billion a year.