Information for Wholesalers

Global CSR bodies recommends that companies wishing to effectively protect their products from misuse and guard against the potential legal, financial and reputational risks of association with executions should consult with stakeholders and experts with knowledge of the capital landscape in the US.

In the Final Statement by the Dutch National Contact Point (NCP) of the OECD Guidelines for Multinational Enterprises in the case of Bart Stapert vs. Mylan, the NCP recommended a “Multi-stakeholder approach”:

“In the NCP’s view, a multi-stakeholder approach like the one to which Mylan subscribes in its statement fosters the wider application of due diligence in a sector. The NCP urges pharmaceutical companies to work with distributors, human rights organisations and others to prevent […] medicines being used in lethal injections.”

A UN Global Compact Good Practice Note on Addressing Adverse Human Rights Impacts Connected to Product Misuse notes:

“Civil society can also help companies devise ways to effectively address product misuse. For example, a human rights organization worked with pharmaceutical companies to devise a medicine distribution model to help protect medicines from being sold to prisons for use in lethal injection executions. This model is so effective that it is now considered an industry standard.”

Since the landscape of the death penalty is continuously changing, companies wishing to stay apprised of developments should maintain an open line of communication with experts such as those at the Lethal Injection Information Center at Reprieve.

The OECD also recommends that wholesalers should engage actively with investors, many of whom have detailed knowledge of these issues from their experience working with other companies within the pharmaceutical sector.

Principle 16 of the UN Guiding Principles on Business and Human Rights states:

“As the basis for embedding their responsibility to respect human rights, business enterprises should express their commitment to meet this responsibility through a statement of policy.”

In order for a wholesaler to demonstrate to investors and other stakeholders that steps are being taken to mitigate the risks associated with the diversion of medicines to death rows in line with the OECD Guidelines, companies should publish a clear public statement on the issue of the misuse of medicines in capital punishment.

The statement 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.

The statement should be published on the company’s website and communicated to state officials seeking access to restricted medicines.

Such statements not only align with industry best practice and provide reputational cover for the wholesaler, they also serve an important deterrent function, discouraging entities that might otherwise try to divert products for use in executions.

All FDA-approved manufacturers of the medicines listed in state execution protocols oppose the misuse of their medicines in executions and have adopted strict policies to prevent this.

Wholesalers play a critical role in ensuring that supply chain controls are effective and medicines are protected from diversion and misuse. Best practice on this issue articulated by CSR experts suggest wholesalers licensed to distribute restricted medicines should adopt a robust policy to ensure that these products are not sold directly or indirectly to correctional facilities for use in lethal injection executions.

The existence of such a 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.

In its Final Statement in the case of Stapert vs. Mylan, the Dutch NCP stressed the importance of monitoring compliance in the supply chain, noting that “the implementation and monitoring of the distribution policy deserves [the company’s] undivided attention” and adding:

“[T]he NCP is of the opinion that compliance in the distribution chain should be monitored both through [the company’s] own sales data and through sales data requested from [the company’s’] customers. In line with industry best practise, [the company] is recommended to do after sales checks on a monthly or bimonthly basis.”

Effective auditing systems can be used to identify suspicious orders, block prohibited sales, and guarantee that supply chain controls remain watertight. These safeguards minimise the possibility of diversions of restricted products, and the associated reputational, fiscal and legal risks.

Companies should report regularly to stakeholders on the results of their monitoring and evaluation of the controlled distribution systems.

Where a breach in a company’s controlled distribution system has been identified, CSR experts recommend that the company should take appropriate action to remedy the breach.

This may include: sending cease and desist letters to customers or correctional facilities to prevent the diversion or misuse of a restricted medicine; communicating with correctional facilities to request the return of missold or misappropriated product; terminating contracts with customers who have violated agreements or contracts; and initiating legal action to recover medicines obtained through breach of contract.

Such actions allow the company to defend the integrity of its contracts and the interests of its partners in the manufacturing sector, as well as protect against the risks associated with providing medicines for executions.

Ultimately, prevention is better than cure, and a robust distribution system, coupled with a clear public position statement and regular monitoring and evaluation of the controls will help ensure companies have no need to take recourse to the actions outlined above.

For more information, please contact us.