Providence, RI - 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
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.