Teamsters Say "Nay!" to McKesson for Its Role in the Opioid Crisis | Pharmaguy's Insights Into Drug Industry News | Scoop.it

In the latest bid to hold drug distributors accountable for the opioid crisis, a major union is urging McKesson shareholders to vote against executive compensation and appoint an independent chairman.

 

The International Brotherhood of Teamsters, which claims to have “substantial holdings” in the wholesaler, sent a letter on Monday to McKesson shareholders, arguing the pay package given chief executive officer John Hammergren is “excessive,” because the distributor has “emerged as a central figure” in the nation’s opioid epidemic.

 

Specifically, the union pointed to a “record” $150 million fine that McKesson paid earlier this year for failing to report suspicious orders, as well as an agreement to suspend sales of controlled substances from warehouses in four states. The Drug Enforcement Administration described the move as among the “most severe sanctions” ever to involve a drug distributor.

 

In arguing against his pay package, the union maintained that the settlement with the DEA “appears to have been excluded from the profit metrics used in both the company’s short- and long-term incentive plans.” Meanwhile, Hammergren received a 150 percent “individual performance modifier,” which boosted his annual bonus by $1.1 million, the Teamsters wrote to McKesson shareholders.

 

The union chided the McKesson board for following a “long-standing practice of insulating executive pay from the legal and regulatory liabilities built up by” company practices. The Teamsters also pointed to litigation charges taken over allegations the distributor conspired to raise average wholesale prices for medicines. The union believes these appeared to have been excluded from calculating executive pay.

 

“With criticism mounting over McKesson’s role in helping to fuel the nation’s opioid epidemic, recent pay decisions also send completely the wrong message to shareholders, regulators, lawmakers, and the public about executive accountability,” the Teamsters wrote.