AmerisourceBergen could be the next victim of the opioid crisis, says Teamsters' general secretary-treasurer

  • Drug distributor AmerisourceBergen will hold its annual shareholder meeting on Thursday.
  • This comes as AmerisourceBergen and its peers are under renewed scrutiny from a congressional investigation into the opioid crisis and pill-dumping.
  • AmerisourceBergen must enact sweeping reforms that address its role in the epidemic.
Bottles of prescription painkiller OxyContin made by Purdue Pharma LP sit on a shelf at a local pharmacy in Provo, Utah, April 25, 2017.
George Frey | Reuters
Bottles of prescription painkiller OxyContin made by Purdue Pharma LP sit on a shelf at a local pharmacy in Provo, Utah, April 25, 2017.

Right now, the three biggest drug distributors in the nation are facing a reckoning for their role in the opioid epidemic from a force as powerful as the judicial system, Congress or law enforcement: their own shareholders.

As the deadliest overdose crisis in U.S. history claims an American life every 13 minutes, AmerisourceBergen – one of the "Big Three" distributors – is preparing for its annual shareholder meeting on Thursday.

There, it will be forced to confront the growing power of an investor movement that launched outside its doors a year ago – one that has already forced the board of directors at its two biggest competitors, McKesson and Cardinal Health, to change the way they are responding to this crisis.

This comes as AmerisourceBergen and its peers are under renewed scrutiny from a congressional investigation into pill-dumping. Earlier this month, the House Energy and Commerce Committee demanded new information on how the so-called Big Three distributors — McKesson, AmerisourceBergen, and Cardinal Health – authorized the distribution of more than 423 million pain pills into West Virginia over just a six-year period. AmerisourceBergen pumped more than 132 million of those doses.

Whether the result of corporate greed or executive negligence, AmerisourceBergen failed in its responsibility to both shareholders and American families, inflicting unimaginable misery on communities, exposing itself to hundreds of lawsuits, and triggering inquiries from Congress and 41 state attorneys general into its callous and potentially illegal behavior.

As a West Virginian, I've witnessed the devastation of the opioid crisis up close and as general secretary-treasurer of the International Brotherhood of Teamsters, I have heard countless stories from members across the country whose families have suffered the loss of loved ones to this epidemic.

In Pennsylvania, which has the fourth-highest overdose death rate in the country, opioids are killing more people than any other health crisis in the state's modern history, prompting Gov. Tom Wolf to declare a disaster emergency in January.

Fed up with feeling helpless as our communities drown in opioids, Teamsters, Pennsylvania State Representatives, and local addiction recovery groups rallied outside of AmerisourceBergen's shareholder meeting in Philadelphia last year to demand accountability and a change to how the company does business.

The Teamsters, along with our affiliated pension and benefit funds, have $100 billion invested in the capital markets and we are long-time shareholders of AmerisourceBergen and the other big pill distributors.

It was a small action that kicked off a movement of investors demanding accountability from the nation's most prominent opioid distributors and manufacturers.

Last July, at McKesson – the nation's fifth largest company– the Teamsters spearheaded a historic shareholder revolt over executive pay and successfully pushed the company to a future separation of the roles of chairman and CEO; this after having already compelled the board to launch an investigation into the company's opioid practices.

Four months later, Cardinal Health conceded to Teamster demands for an independent chairman and calls from other investors to enhance the company's ability to claw back executive pay for misconduct around, for example, the opioid crisis.

A year after we first rallied in Philadelphia, AmerisourceBergen now finds itself engulfed in a shareholder-led effort spearheaded by the "Investors for Opioid Accountability," a coalition with more than $2.2 trillion in assets. From state treasurers and public sector investors, labor groups and members of the faith-based community, we are uniting to demand sweeping reforms that will address the structural, operational and governance failures that have fueled this public health crisis.

This week, shareholders will have the opportunity to support key accountability measures at AmerisourceBergen, including independent board oversight, stronger disclosure practices around claw back policies, and greater transparency on the measures the board has taken since 2012 to address opioid-related risks.

To date, AmerisourceBergen's most visible response to this growing investor pressure has been to move its shareholder meeting from its hard-hit, home-state of Pennsylvania, to the Ritz-Carleton Golf Resort in Naples, Florida.

Forcing these corporations to look in the mirror is the right thing to do for Americans, and the smart thing to do for investors. AmerisourceBergen faces growing threats to its reputation and its financial health from its behavior – risks its investors share. At the same time, our portfolios are exposed to the escalating economic costs of this crisis – estimated by one recent study to have exceeded $1 trillion since 2001.

Drug distributors still have a chance to join their investors in making our healthcare industry a part of the solution to the opioid epidemic, rather than the problem. But if they continue to care about nothing but money, shareholders will keep using ours to send a clear message: We refuse to finance behavior that pays for profits with American lives.

Commentary by Ken Hall, general secretary-treasurer of the International Brotherhood of Teamsters.

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