Dive Brief:

• The International Brotherhood of Teamsters, along with three state treasurers from West Virginia, Illinois and Pennsylvania have a bone to pick with drug distributor McKesson for its perceived mishandling of opioid dispensing, MarketWatch reported Tuesday.
• The union is a significant investor in McKesson, which the union believes has left itself open to lawsuits due to improper management and the ongoing over-availability of addictive painkillers. A company spokesman claims that the Teamster's labor dispute with one McKesson location plays a role in the conflict.
• The Teamsters and state treasurers have called for independent board chairs, executive pay reforms and a special investigation into the company’s role in the opioid crisis.

Dive Insight:

McKesson is not the first pharmaceutical distributor to come under scrutiny for its role in the opioid crisis. 

Earlier this year, Cardinal Health settled with the Drug Enforcement Agency (DEA), paying $44 million for its negligence in complying with the agency's anti-diversion programs for painkillers. The episode suggested a clear stance by the DEA that all stakeholders in pharmaceutical supply chains, from manufacturer to retailer, are responsible for the opioid epidemic. In this light, McKesson seems to be but the latest target.

However, a closer look at claims against McKesson reveals deeper issues plague the company.

The New York Times reports McKesson has a history of opioid mismanagement, dating back at least to 2008.Like Cardinal, McKesson failed to report suspicious orders for controlled substances, including opioids. Ultimately, the company paid $13.25 million to the government over the case and pledged to intensify its compliance program.

Yet, nine years later, another lawsuit reveals the company failed to improve its compliance efforts. McKesson paid another $150 million to the government in January, 2017, and is still being prosecuted by West Virginia for its responsibility in the crisis.

If drug distributors are to take greater responsibility for their role in the opioid crisis, companies must move beyond compliance. Distributors, as the middlemen between opioid producers and retailers, have the opportunity to use private data to spot, report, and stem the flow of suspicious drug orders down the chain. If distributors do not take responsibility for their role as a middleman, the supply of opioids will always exceed real demand, as manufacturers produce the painkillers in bulk. Retailers, in turn, will continue stocking the medicine and personnel will face the pressure to sell more than must be sold.

Addressing these structural problems takes leadership from drug distributors. But that's exactly what is lacking, according to the Teamsters. Despite the stunning payouts and numerous settlements, McKesson continues to reward its leaders: The New York Times reports McKesson CEO John H. Hammergren has received more than $690 million in compensation since 2008 for leading the company. He also personally heads the Board of Directors, a position both the Teamsters and the state treasurers involved wish to contest.

When Cardinal Health settled with the DEA, it created an educational video for pharmacists that would help instruct them on spotting suspicious orders. A spokesperson for McKesson told MarketWatch the company was investing more in its existing oversight and monitoring programs and had appointed an independent commission to review the issue.

Whether these initiatives suffice are up to the jury, but one trend is certain: As the opioid crisis intensifies, so will the blame cast on pharmaceutical supply chains and their leaders. Distributors, currently under scrutiny, have an opportunity to devise and publicize the myriad ways middlemen can help more accurately forecast demand for opioids, and begin hacking on the structural issues behind the opioid crisis.