Opioids: As litigation progresses towards a national settlement between communities affected by the opioid crisis and the companies that made and sold prescription drugs that helped fuel the epidemic, proponents continue to call for more transparency and accountability. Prompted by clear financial risks from lawsuits, legislation and reputational damage, votes on the subject have been high—majorities above 60 percent in 2018 and 2019 at Walgreens Boots Alliance, Assertio Therapeutics (the former Depomed) and Rite Aid and 41.2 percent at Amerisource Bergen in 2018. Proponents have withdrawn four other resolutions seeking reports since the start of a campaign from faith-based investors, the UAW Retirees’ Medical Benefit Trust and state pension fund. Investors for Opioid Accountability issued a report last year recapping the efforts and describing an array of corporate governance reform requests.
OPIOID CRISIS & INSULIN PRICES PROMPT SHAREHOLDER PUSH FOR BIG PHARMA BOARD ACCOUNTABILITY
DONNA MEYER, PH.D.
Director, Shareholder Advocacy, Mercy Investment Services
In July 2019, Investors for Opioid Accountability, which has been at the forefront of the fight against the opioid crisis, broadened its focus to encompass companies with insulin and generic legal risks and those under scrutiny for anticompetitive practices. Now known as Investors for Opioid and Pharmaceutical Accountability (IOPA), this diverse global coalition of 60 public, faith-based, labor, and sustainability funds, as well as asset managers, represents investors with more than $4.4 trillion in assets under management.
Pending—Two resolutions at new recipients seek comprehensive reports on the crisis. At Johnson & Johnson the request is for a report
describing the governance measures JNJ has implemented since 2012 to more effectively monitor and manage financial and reputational risks related to the opioid crisis, given JNJ’s sale of opioid medications, including whether increased centralization of JNJ’s corporate functions provides stronger oversight of such risks and any changes in how the Board oversees opioid-related matters, how incentive compensation for senior executives is determined, and how the Board obtains input regarding opioids from stakeholders.
A substantially similar resolution is at Walmart. The proposal notes the company is a defendant in the national class action litigation because it is “accused of failing to adequately train employees or monitor suspicious orders of prescription opioids.” It says the company’s Opioid Stewardship Initiative addresses restrictions on prescriptions, but not changes such as board oversight and links to executive pay that the proponents believe are needed.
Withdrawal—Proponents withdrew a proposal this year at Walgreens that asked for the same report. That proposal also said the company should explain “whether and how the Board oversees Walgreens’ opioid-related programs and AmerisourceBergen’s opioid- related risks, and whether and how Walgreens has changed senior executive incentive compensation arrangements.” The requested report is available on the company website.