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Neighbors Growing Together | Nov 21, 2017

Investor group presses US drug companies on opioid controls

By Ross Kerber, Reuters | Oct 30, 2017

BOSTON — U.S. shareholder activists are addressing a soaring death toll from opioid drug abuse, asking companies that make and distribute the painkillers to review the risks their businesses could face from their role in the sector.

Leaders of a 30-fund group that includes state pension officials and religious and labor organizations plan to reveal on Monday they have begun filing shareholder resolutions at 10 companies, including distributors AmerisourceBergen Corp  and Cardinal Health Inc  and manufacturers Johnson & Johnson  and Insys Therapeutics.

In resolutions aimed at annual shareholder meetings to be held in 2018 and in letters to the companies, activists are 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.

They also seek corporate-governance reforms such as allowing more grounds to claw back pay from executives who inappropriately promote the drugs, or creating independent board chairs to provide better oversight.

Representatives of Cardinal and Insys did not immediately respond to requests for comment.

Johnson & Johnson spokesman Ernie Knewitz said the company was preparing a response to the investors, and that the company had acted responsibly.

“Opioid abuse is a serious public health issue that must be addressed, and doing so will require collaboration among many stakeholders, and our company is committed to working with federal, state and local officials to help find meaningful solutions,” he said in an emailed statement.

In a statement emailed by AmerisourceBergen spokeswoman Keri Mattox, the company said it “welcomes a productive dialogue with all shareholders. The issue of opioid abuse is a complex one that spans the full healthcare spectrum.”

The statement said the company worked closely with officials “to combat drug diversion while supporting appropriate access to medications.”

At an annual meeting on Nov. 8, Cardinal Health will face a resolution calling for an independent board chair in order to improve oversight.

Shareholder activists said healthcare providers may have underestimated how addictive the drugs were, but said the crisis points to a need for stronger oversight within drugmakers.

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