“We were texting when he OD’ed” and died, an Ohio acquaintance of mine told me in a May catch-up phone conversation about a young man we both knew. “He’s, like, the third one in the last 10 days,” she said. She’d had a relapse, too, while she’d been pregnant. Her baby, like her other children, was removed from her care, becoming one more in a wave of children flooding child-services agencies.
The crisis can be attributed to many parties—drug manufacturers, drug distributors, unscrupulous doctors, and, of course, drug dealers, smugglers, and users—some of whom are profiting from it. Last month, a group of shareholders of one distributor strove to bring the company’s goals more in line with society’s.
On July 26, at the annual shareholder meeting of McKesson, the nation’s largest distributor of pharmaceuticals, including opioid drugs, shareholders refused to approve the company’s generous executive-compensation plan after the International Brotherhood of Teamsters—which holds stock in McKesson—campaigned against it, citing the company’s “role in fueling the prescription opioid epidemic.” McKesson rejected that characterization, and denied that it had any such role. Calling the opioid, heroin, and fentanyl epidemic “complicated,” Jennifer Nelson, a spokesperson for McKesson, told me that “in our view, it is not to be laid at the feet of distributors.” The Teamsters, she charged, were trying to use the addiction crisis to their advantage in their ongoing labor dispute with the company involving the union’s efforts to represent workers at a McKesson distribution center in Florida.
The shareholder vote, which isn’t binding—McKesson says it’s still reviewing its current compensation plan—may seem like a minor slap over an esoteric bit of corporate governance, but it was a notable exception among public companies. According to the consulting firm Compensation Advisory Partners, of 447 say-on-pay votes among S&P 500 companies this year before early August, only five, including McKesson, suffered rejection. The Teamsters view the outcome as a success, especially at a time when unions’ power has waned. “Unions have been pushing for years for standard good-governance practices” in companies, says Michael Pryce-Jones, the union’s senior governance analyst. “This has importance across political divides.”
During the Progressive era, Americans concluded that companies could not be counted on to prioritize the greater good. So they passed laws like the Pure Food and Drug Act. Over the decades, the country kept developing new ways to keep business in line, with agencies like the Federal Trade Commission, the Securities and Exchange Commission, the Environmental Protection Agency, and, more recently, the Consumer Financial Protection Bureau. All along, the animating idea has been that, without oversight, corporations can do significant social damage.
But starting around 1980, the gospel of “shareholder value,” the assertion promoted most famously by the economist Milton Friedman that a company’s only responsibility is to its investors’ financial return, became ingrained in corporate thinking. The dogma lent a simplistic, and welcome, cover to executives. They found their decision-making ruled by a binary choice: It was either good for shareholder value, or bad.