State Treasurer Seth Magaziner today announced that the Rhode Island pension fund has co-filed a shareholder proposal at McKesson Corporation (NYSE: MCK), one of the largest pharmaceutical distributors in the United States, requesting full disclosure of the pharmaceutical giant’s direct and indirect lobbying activities and expenditures – to assess whether McKesson’s lobbying is consistent with its expressed goals and in the best interests of stockholders.
«As investors, we have a right to know if pharmaceutical executives are using our money to influence lawmakers,» said Treasurer Magaziner. «I am particularly concerned with the possibility that McKesson is using investors’ dollars to block common-sense public health policies related to the opioid epidemic.»
Rhode Island Treasury joins UAW Retiree Medical Benefits Trust as a filer on the proposal, which requests that McKesson report on the policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. Additionally, investors are requesting an annual report to investors disclosing information on payments by the company which are used for direct or indirect lobbying or grassroots lobbying communications, as well as membership and payment information to any tax-exempt organization that writes and endorses model legislation.
There are growing concerns over the legal, financial and reputational risks to McKesson related to the opioid epidemic, particularly the board’s efficacy of managing these risks despite numerous warnings by regulatory agencies and the company’s own internal monitoring systems.
In 2017, McKesson paid $150 million to the U.S. Drug Enforcement Agency for failure to meet its oversight obligations related reporting suspicious orders of controlled substances to the Agency, despite repeated warnings to comply with reporting requirements.
«The pharmaceutical industry bears tremendous responsibility for addressing the opioid epidemic in the United States,» added Treasurer Magaziner. «Given the scope and size of the mounting litigation the company is facing, McKesson has provided investors with little transparency on what the company is doing to mitigate these risks.»
Rhode Island Treasury is a member of Investors for Opioid Accountably, an investor coalition with a combined $1.4 trillion in assets. Treasurer Magaziner is also a member of the State Treasurers’ Opioid Coalition, whose members include California Treasurer John Chiang, Illinois Treasurer Michael Frerichs, Pennsylvania Treasurer Joe Torsella, and West Virginia Treasurer John Perdue.
These investor coalitions are actively engaging with opioid distributors and manufacturers on issues including board oversight of business risks related to opioids.