Wholesalers sit at the point in the supply chain where a diverted medicine is either stopped or shipped. Five best practice steps to keep restricted medicines out of executions.
In the context of executions, that means ensuring that medicines designed to save and improve patients’ lives are not sold to prisons for use in executions.
The products named in state execution protocols are made by manufacturers who strongly oppose their misuse, and who have asked their distributors to apply supply chain controls — controls that allow at-risk medicines to reach patients for treatment, but not correctional facilities for executions. Those controls are only effective if they are implemented by pharmaceutical wholesalers.
The importance of controlling the supply chain to prevent the use of medicines in executions has been recognized by corporate responsibility bodies including the Organisation for Economic Co-operation and Development and the United Nations Global Compact. Over the past fifteen years, more than 100 companies across the sector have taken action, and an industry standard has emerged in the process.
Investors in the healthcare sector have made clear that preventing the misuse of medicines in executions is an important corporate governance issue, and their scrutiny follows the product down the chain. One shareholder publicly divested a $70 million stake in a manufacturer after it emerged that the company had not effectively restricted sales of its products for use in executions. In another instance, a pension fund divested millions of euros in shares over the use of a company’s drugs in executions, citing its failure to “engage in a genuine dialogue” about their efforts to ensure their products are not used “in an undesirable way.”
For wholesalers the exposure is the same in kind. Distribution agreements for at-risk products carry commitments that manufacturer partners, regulators and investors now expect to see monitored, audited and reported on — and a distributor unable to show how its controls work is the weak point those stakeholders look for first.
When a restricted medicine reaches a death chamber, the company that shipped it is drawn into a controversy that has nothing to do with healthcare. Major US distributors have been the subject of sustained public campaigns over whether they would decline to supply drugs for executions.
In one example, two companies were named in connection with a horrific botched execution in Oklahoma, which received international media coverage. Both were publicly criticized for having taken insufficient steps to protect their medicines from misuse in executions.
Court testimony has described how that damage attaches to the product itself rather than to any one company. An anesthesiologist testifying in Alvogen Inc. v. State of Nevada, Case No. A-18-777312-B (Sept. 12, 2018, Day 3, p. 34), explained that once the public associates a drug with deaths and adverse outcomes, clinicians and patients grow fearful of it and seek to avoid it — an effect felt by every business that handles the line.
Companies whose medicines are misused in executions face several forms of legal exposure. Companies have been sued by family members when executions go badly wrong, on the allegation that they should have known the drugs would cause unnecessary and extreme suffering.
Wholesalers have also had to go to court to recover diverted product. One of the largest US wholesalers sued a state after its medicine was obtained for a series of executions through what the company described as false pretense, trickery and deceit. In a separate matter, a District Court granted a preliminary injunction after a manufacturer sued a state for acquiring its drugs illicitly and through subterfuge; the state was prohibited from using the supply in executions and subsequently agreed to return drugs to that company and two others that had intervened.
Litigation of this kind lets a company defend the integrity of its contracts and the interests of its supply chain partners. But robust distribution systems, coupled with a clear public position statement and regular monitoring and evaluation of the controls, will help ensure a wholesaler has no need to take legal recourse in the first place.
Wholesalers seeking to protect the products they distribute from misuse — and to guard against the fiscal, reputational and legal risks set out above — should consult stakeholders and experts with knowledge of the capital punishment landscape in the United States.
The Dutch National Contact Point for the OECD Guidelines for Multinational Enterprises has urged pharmaceutical companies to work alongside distributors, human rights organizations and other partners to keep medicines out of lethal injections. Its recommended multi-stakeholder approach names wholesalers as participants in the solution, not bystanders to it.
The UN Global Compact’s good practice note on product misuse records how well this works in practice: a specialist organization worked with pharmaceutical companies to design a distribution model that protects medicines from being sold to prisons for use in executions — a model so effective it is now considered an industry standard.
Because the death penalty landscape shifts continuously — protocols are rewritten, states substitute one drug for another, and new products come under threat — wholesalers should keep an open line of communication with experts such as those at the Lethal Injection Information Center. The OECD further recommends engaging actively with investors, for whom, as the divestments above show, this is a live corporate governance issue, and many of whom bring detailed knowledge from their work with other companies in the sector.
A public position statement shows investors, manufacturer partners and other stakeholders that a wholesaler is taking steps to mitigate the risk of medicines being diverted to death rows, in line with the OECD Guidelines. As the divestments above demonstrate, shareholders have pulled substantial stakes from companies precisely for failing to engage on this issue — making a published policy a matter of corporate governance as much as principle.
The UN Guiding Principles set the expectation plainly: a business embeds its responsibility to respect human rights by expressing that commitment through a published statement of policy.
UN Guiding Principles on Business and Human Rights, Principle 16The statement may be apolitical in nature. It should confirm that the company opposes the misuse of medicines in executions, and that it has tailored distribution controls available to protect medicines through the supply chain.
For a wholesaler, where the statement lands matters as much as what it says. It should be published on the company’s website and communicated directly to state officials seeking access to restricted medicines — the people most likely to test the policy. Beyond aligning the company with industry best practice, a clear public position provides reputational cover and serves an important deterrent function, discouraging entities that might otherwise try to divert products for use in executions.
Every FDA-approved manufacturer of the medicines listed in execution protocols opposes their use in executions, and each has adopted strict policies to prevent it. Those policies depend on wholesalers to carry them into effect.
Best practice on this issue, as articulated by ethical supply chain experts, is that wholesalers licensed to distribute restricted medicines adopt a robust policy of their own, ensuring these products are not sold directly or indirectly to correctional facilities for use in lethal injection executions. In practice that means screening new accounts, flagging at-risk product lines, blocking ship-to addresses associated with departments of corrections, and requiring written commitments from customers that they will not resell onward for that purpose.
As the litigation described above shows, recovering product after the fact is far costlier than declining the order. The existence of the policy should be communicated to manufacturers, correctional facilities, state authorities, regulators and other interested stakeholders.
In order to ensure that supply chain controls are working effectively, ethical supply chain experts at the OECD recommend that companies commit to regular auditing of their systems, including monitoring, evaluation and reporting.
Ruling on a case concerning a pharmaceutical company’s distribution policy, the Dutch National Contact Point found that implementing and monitoring that policy deserved the company’s undivided attention — and that compliance should be checked against both its own sales data and data requested from its customers. In line with industry best practice, it recommended after-sales checks every one to two months.
Dutch National Contact Point, Final Statement in Stapert v. MylanThat second element — data requested from customers — is the wholesaler’s part of the work. Effective auditing systems can be used to identify suspicious orders, block prohibited sales, and keep supply chain controls watertight. These safeguards minimize the possibility of diversion and misuse of restricted products, and the associated reputational, fiscal and legal risks documented above.
Companies report regularly to stakeholders on the results of their monitoring and evaluation of the controlled distribution systems.
Where a breach in a controlled distribution system has been identified, companies act quickly to remedy it. As the legal cases above show, distributors have pursued these remedies all the way to court — including litigation over product obtained for an execution series in breach of a distribution agreement. Actions taken include:
Acting decisively defends the integrity of a company’s contracts and the interests of its partners across the manufacturing sector, and protects the wholesaler against the risks that follow from medicines being supplied for executions.
Ultimately, prevention is better than cure. A robust distribution system, coupled with a clear public position statement and regular monitoring and evaluation of the controls, will help ensure a company never needs to resort to the remedies above.
Guidance on this page draws on the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles, and the UN Global Compact’s good practice note on product misuse. Quoted findings are summarized from the published documents linked alongside each. For tailored advice on distribution controls or position statements, please contact us.
We support wholesalers, distributors and manufacturers pro bono on distribution controls, and keep companies apprised as the landscape changes.