Following a bombshell investigation that exposed how drug distribution companies lobbied in Congress to weaken government drug enforcement powers, investors are demanding major changes—including a housecleaning in the management ranks.
The reports, published and aired Sunday, put top drug distributors McKesson, Cardinal Health and AmerisourceBergen in the hot seat. With the help of a DEA whistleblower, the investigation at CBS' 60 Minutes and the Washington Post detailed a lack of controls at the companies to stop illicit painkiller sales. Then, as the opioid epidemic worsened, the companies undermined enforcement efforts by using their influence in Congress and Washington, D.C., to get the rules changed, the outlets reported.
In a statement on Monday, Ken Hall, general secretary treasurer of the International Brotherhood of Teamsters, said that the "lobbying tactics" on display are a "dangerous abuse of power."
"While these drug companies were promising to strengthen their anti-diversion programs and compliance practices, they were diverting resources to rig the system in their favor," Hall said in a statement. "No responsible shareholder can see this corporate behavior as justified, even under the mantra of shareholder value."
The teamsters are calling for a "massive shakeup at the drug wholesalers starting at the top," and for changes to "governance and compensation practices" at the distributors. The labor group sent a letter to Cardinal Health shareholders last week urging a vote for a new independent board chairman.
In response to the stories, Healthcare Distribution Alliance CEO John Gray wrote in a statement that distribution companies are "supportive of initiatives by the government, public health organizations and our supply chain partners to reduce opioid prescribing, increase disposal of unused medicine, and improve patient, pharmacist and physician education."
The organization also published a fact check that argues the reports "presented a misleading picture" about the companies' role in the pharma supply chain.
It's not the first time the companies have come under fire. Earlier this year, McKesson paid a record $150 million fine for a repeat offense of not reporting suspicious orders for opioid drugs. Cardinal Health and AmerisourceBergen settled smaller lawsuits earlier this year in West Virginia.
As the opioid epidemic has worsened in recent years, top U.S. agencies have made it a priority to address its causes. The CDC overhauled its prescribing guidelines, while the FDA pledged to work with PBMs and insurers to limit dispensing. The drug regulator also recently pushed Endo to remove its Opana ER from the market, saying the benefits aren't worth the risks in light of the situation.