Nearly every American can tell a story about or put a face to the opioid epidemic that is gripping this country. As a native West Virginian, I’ve heard far too many experiences of families gutted by this insidious crisis. The story that set off the alarm in my union, the International Brotherhood of Teamsters, is that of Travis Bornstein, an Ohio local union president, a former Marine, and a grieving father.
He lost his son Tyler — a star athlete — to opioid addiction. After an injury that required multiple elbow surgeries, Tyler became addicted to pain medication and, ultimately, heroin. Then he was gone.
After Bornstein shared the story of his family’s tragic loss at our convention in 2016, dozens of Teamsters from across the country spoke out about how this epidemic has ravaged their families and their communities.
In response, the International Brotherhood of Teamsters — an investor with more than $100 billion in the capital markets — spearheaded a shareholder movement to bring accountability and critical reforms to the industry that has flooded communities with an oversupply of prescription painkillers. Our hope was to ensure that fewer families and communities will have stories like Travis’ to tell.
Focusing on the “Big Three” drug distributors — Cardinal, McKesson, and AmerisourceBergen — we called for sweeping reforms to address the operational, cultural, and compliance problems that allowed these three companies to pump more than 420 million opioid pills into my home state of 1.8 million people in just six years. (All drug companies combined sent 780 million doses to the state.) As our successes demonstrate, shareholders of these companies have an inherent self-interest in reforming such reckless corporate behavior.
At McKesson, our efforts led to an historic shareholder revolt in 2017 to reject a bloated CEO pay package that failed to consider the company’s record-setting regulatory fines and establish the first independent board committee to investigate opioid distribution practices. Echoing our calls for independent oversight, McKesson announced last week that its longtime CEO and chairman, John H. Hammergren, would step down next year, with the board to be chaired by an independent director.
At Cardinal Health, two days before shareholders were to vote on a Teamster proposal for an independent board chair at the 2017 shareholder meeting, then-CEO and chairman George Barrett announced he would step down and be replaced by an independent board chairman.
While these moves are in the right direction, we stand ready to continue fighting to ensure that management is held accountable for the mistakes they have made — not shareholders, workers, or communities.
Today, a broader $2.2 trillion investor coalition known as Investors for Opioid Accountability — which includes the Teamsters and more than 40 other concerned state treasurers, comptrollers, public pension plans, faith-based investors, and other labor funds — has reinforced its demands with the distributors and expanded the initiative to include opioid manufacturers and retailers. The coalition has secured significant governance reforms and improved transparency at Cardinal as well as at many of the country’s largest opioid manufacturers.
We are encouraged by the progress we’ve made, but recognize important work remains to be done as we approach the annual meeting of Cardinal Health on Nov. 7.
This year, the Teamsters are pressing the company to stop excluding legal settlement costs from the profit metrics used to determine executive compensation. Cardinal has paid millions of dollars to settle claims by federal and state authorities over the last decade and the number of opioid-related lawsuits against the company has increased from two dozen to more than 1,000 in just one year.
Our proposal is based on the commonsense principle that the CEO and other executives should not be insulated from the impact of legal or regulatory settlements while shareholders and American families are left to pay the price. The accusations against the company go directly to the core responsibility of the management team: to ensure the safe and secure distribution of drugs. CEOs who profit from decisions or, just as importantly, inactions that have exacerbated the opioid crisis and created risks for shareholders and employees should also bear the cost.
Every day the opioid epidemic claims 115 American lives. While we still have a long way to go, I have great hope that we are turning a corner on this fight. As I look back over the work we have done these last two years, I am confident that we can stem the tide of the opioid epidemic.
Ken Hall is secretary general of the International Brotherhood of Teamsters.