(Bloomberg) -- Drug companies that profit from opioids need to do more to limit the risks of the addictive products and protect shareholders against losses, according to a group of investors managing more than $1.3 trillion.
Investors for Opioid Accountability plans to file shareholder proposals on board oversight of business risks at 10 manufacturers and distributors, the coalition of unions, public pension funds and state treasurers said Monday in an emailed statement.
The group “came together out of escalating concerns that opioid company business risks can both threaten shareholder value and have profound long-term implications for the economy and society,” said Meredith Miller, chief corporate governance officer for the United Automobile Workers Retiree Medical Benefits Trust.
The effort adds pressure on drugmakers and the nation's three major drug distributors amid an addiction and overdose crisis that claims a life every 19 minutes in the U.S. and has been deemed a public-health emergency by President Donald Trump. States, counties and cities have sued several of the companies, claiming they aggravated the epidemic with misleading marketing and aggressive distribution.
The coalition requests that the boards of the 10 companies investigate their responses to the business risks related to opioids. Earlier this year, the International Brotherhood of Teamsters led a campaign to strip McKesson Corp. Chief Executive Officer John Hammergren of the role of chairman. The company vowed to split the posts whenever Hammergren steps down. The union has filed a similar proposal with Cardinal Health Inc., which is scheduled to hold its annual meeting on Nov. 8.
Besides McKesson and Cardinal Health, the group's statement lists AmerisourceBergen Corp., Depomed Inc., Endo International Plc, Insys Therapeutics Inc., Johnson & Johnson, Mallinckrodt Plc, Mylan NV and Pernix Therapeutics Holdings Inc. Half of the companies have CEOs who also serve as chairman, according to data compiled by Bloomberg.
Johnson & Johnson said it is committed to finding solutions to the epidemic and that it no longer promotes opioids, which account for a sliver of its sales. AmerisourceBergen said it welcomes a productive dialog with shareholders. McKesson said it supports reducing diversion from the supply chain. Cardinal declined to comment. Requests for comment from Depomed, Endo, Insys, Mallinckrodt, Mylan and Pernix were not immediately returned.
--With assistance from Jared S. Hopkins Robert Langreth and Jenn Zhao
To contact the reporter on this story: Anders Melin in New York at amelin3@bloomberg.net.
To contact the editors responsible for this story: Alicia Ritcey at aritcey@bloomberg.net, Timothy Annett
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