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Soon after President Donald Trump declared the opioid abuse crisis a “public health emergency," shareholder activist groups said they aim to hold drug manufacturers and distributors liable for their part in the crisis.
Soon after President Donald Trump declared the opioid abuse crisis a “public health emergency,” shareholder activist groups said they aim to hold drug manufacturers and distributors liable for their part in the crisis.
Leaders of a 30-fund group that includes state pension officials and religious and labor organizations said they are filing shareholder resolutions at 10 companies, including distributors AmerisourceBergen Corp. and Cardinal Health, along with manufacturers such as Johnson & Johnson and Insys Therapeutics, Reutersreported.
Federal prosecutors also charged John Kapoor, the founder of Insys, with participating in a scheme to bribe doctors to prescribe a particularly potent opioid. A lawyer for Kapoor said in a statement that Kapoor is innocent and will fight the charges, Reuters reported.
The shareholder activists seek corporate-governance reforms including allowing more grounds to claw back pay from executives who inappropriately promote opioid painkillers and creating independent board chairs to provide better oversight. They are also urging independent directors to review and report on how the boards are managing the legal, financial and reputational risks their enterprises face from their involvement with opioids.
“We believe these companies have played an important role in this epidemic,” Donna Meyer, director of shareholder advocacy for Mercy Investment Services, an investment fund for Roman Catholic nuns that is leading the push against drugmakers and distributors, told Reuters. The UAW Retiree Medical Benefits Trust, which oversees benefits for about 700,000 retirees of the United Auto Workers, is another group involved in the campaign.
Late last week, Trump declared the opioid crisis a “public national health emergency”, which does not automatically direct additional federal funding to combat the crisis, CNN reported.
However, federal agencies will be directed to devote more grant money already in their budget to the problem and take "action to overcome bureaucratic delays and inefficiencies in the hiring process," according to a fact sheet on Trump's order.
Meanwhile, Cardinal Health will face a resolution calling for an independent board chair in order to improve oversight at its annual meeting on November 8.
“These considerations are especially critical at Cardinal given the potential reputational, legal and regulatory risks Cardinal faces over its role in the nation’s opioid epidemic, including its history of compliance challenges concerning the distribution of controlled substances,” the resolution’s sponsors, including the International Brotherhood of Teamsters, said in a supporting statement.
The statement cited Cardinal’s payment of tens of millions of dollar to settle various federal and state charges related to opioids, Reuters reported.
Meanwhile, AmerisourceBergen “welcomes a productive dialogue with all shareholders,” Spokeswoman Keri Mattox said. “The issue of opioid abuse is a complex one that spans the full healthcare spectrum, including manufacturers, wholesalers, insurers, prescribers, pharmacists and regulatory and enforcement agencies.”