Drug firm draws heat over opioid distribution
Teamsters protest AmerisourceBergen’s annual meeting; West Virginia collects $16 million in settlement
A prescription drug distribution company based in Chesterbrook is coming under increased scrutiny amid allegations its business practices are helping to fuel the nation’s opioid epidemic.
AmerisourceBergen last week was the subject of a protest organized by the Teamsters union outside of a Philadelphia hotel where the company was holding its annual shareholders’ meeting.
The protest came after AmerisourceBergen, along with another large prescription drug distributor, Cardinal Health, in late December agreed to pay $36 million to settle a lawsuit brought by West Virginia alleging they contributed to the overdose crisis in that state. Of that, Cardinal Health agreed to pay $20 million and Amerisource-Bergen agreed to pay $16 million. The companies did not admit to any wrongdoing. The case against a third large drug distributor, McKesson Corp., is ongoing.
A Charleston Gazette-Mail investigation found drug wholesalers shipped 780 million hydrocodone and oxycodone pills to West Virginia in six years, a period when 1,728 people statewide fatally overdosed. West Virginia has the highest per capita opioid overdose rate of any state in the na--
“As owners of shares (in a pension fund), we are very troubled by the lack of oversight the big three distributors have displayed with the distribution of these drugs.” – Louis Malizia, assistant director of the Teamsters’ Capital Strategies
tion.
On Thursday, around 40 people at a protest outside of Sofitel Hotel in Philadelphia where shareholders were meeting, carried signs with the slogans: “AmerisourceBergen: Making a Killing on Opioids;” and “Corporate Crime: 62 Opioid Deaths Every Day.”
“As owners of shares (in a pension fund), we are very troubled by the lack of oversight the big three distributors have displayed with the distribution of these drugs,” Louis Malizia, assistant director of the Teamsters’ Capital Strategies, said in a phone conversation Monday.
Among the assertions in a Teamsters fact sheet on the opioid crisis:
• 62 Americans die each day from prescription opioid-related overdoses;
• In 2015 alone, 475 million doses of oxycodone and hydrocodone products were distributed in Pennsylvania, which equates to 37 pills for every Pennsylvanian;
• Last year, more than 900 Philadelphians died from drug overdoses, 80 percent of which involved prescription opioids or heroin. By contrast, there were only 277 homicides in Philadelphia during the same period.
• One city, Kermit, West Virginia, with a population 400, received 9 million pills in just two years. (That town, in late January, filed a separate suit against five drug wholesalers, including AmerisourceBergen.)
• AmerisourceBergen, San Francisco-based McKesson and Ohio-based Cardinal Health, known as “The Big Three,” account for 85-to-90 percent of all revenues from drug distribution in the U.S;
• In calendar year 2015, U.S. revenues from the drug distribution divisions of these “Big Three” wholesalers were $378.4 billion, a 14.8 percent increase from 2014.
• Since 2007, “The Big Three” wholesalers have been subjected to DEA enforcement actions, with McKesson and Cardinal Health paying more than $238 million to settle cases alleging they failed to report suspicious orders, as required by federal law.
“The role of the ‘Big Three’ in fueling the nation’s opioid epidemic parallels the corporate integrity failure seen at Wells Fargo, albeit with far more tragic consequences,” the union said in its fact sheet. “In response, the Teamsters are pushing corporate governance and executive pay reforms at the three drug wholesalers.”
Efforts to reach AmerisourceBergen Monday for comment on recent events were unsuccessful.
In response to the union’s questions Thursday, AmerisourceBergen executives offered to meet with Teamsters officials to “share
ideas and provide accurate information on our role in the supply chain and the significant steps we take to prevent drug diversion,” Gabe Weissman, a company spokesman, told the Gazette Mail... “We depend on pharmacies ordering products appropriately and doctors ... prescribing them appropriately. We’re interested in collaborating with those who share in our mission to provide safe access to medication.”
Two Pennsylvania state representatives – John J. Taylor, R-177, of Philadelphia and Gene DiGirolamo, R-18, of Bucks County – addressed the protesters in Philadelphia.
In a video posted on the Teamsters’ website, Rep. Taylor gave an impassioned plea for better oversight from drug distributors.
“I’m here today on behalf of my community and on behalf of Philadelphians,” Taylor said. “No one in that community escapes that problem. Everyone has it in their family or in a neighbor, I have it in my own family ... So what we are asking for here today, what I am personally asking for, it’s not just this company (Amerisource-Bergen), it’s every distributor to have maximum diligence on where these drugs go ... We’re overprescribing, we need to stop.”