UPDATE 1-Three US state treasurers seek change in McKesson exec pay policy

(Adds McKesson's response)

July 25 (Reuters) - U.S. state treasurers from Illinois, Pennsylvania and West Virginia on Tuesday urged drug distributor McKesson Corp to appoint an independent chair and link executive pay with progress in combating opioid epidemic.

The three state treasurers in a letter also asked the company to take stock of the role it played in contributing to opioid abuse. (http://bit.ly/2uxBAmk)

"Should no action be taken, each treasurer's office would re-evaluate its financial position in the San Francisco-based company and strongly encourage other institutional investors to do the same," the treasurers said. (http://bit.ly/2uWtkP5)

McKesson, which will hold its annual general meeting on Wednesday, said in an email that it had received the letter and was in the process of reviewing it.

"While we don't manufacture, prescribe or dispense opioids to patients, we are doing everything we can to help address this crisis," the drug distributor added, pointing out that controlled substances are "a very small part" of its business.

The treasurers, who did not disclose their stake in the company, requested that McKesson submit a report examining the causes, impacts and possible responses to the country's opioid problem within six months.

The letter follows criticism from International Brotherhood of Teamsters, who earlier this month urged shareholders to vote against executive pay practices after McKesson's CEO and chairman, John Hammergren, was paid more than $20 million for the year ended March 31.

Earlier this year, the company paid a record $150 million to resolve a probe into whether the drug distributor failed to report suspicious orders of addictive painkillers.

McKesson said that it had also appointed an independent review committee to examine questions related to its distribution of controlled substances.

Opioid drugs, including prescription painkillers and heroin, killed more than 33,000 people in 2015, according to the Centers for Disease Control and Prevention (CDC), and nearly half of all opioid overdose deaths involve a prescription opioid.

Several West Virginia counties have filed lawsuits in recent months against McKesson and its rivals Cardinal Health and AmerisourceBergen for failing to report suspicious orders of opioids in the state. (Reporting by Tamara Mathias in Bengaluru; Editing by Amrutha Gayathri and Maju Samuel)