Teamsters Warn PharMerica Investors of Risky Ties to AmerisourceBergen
13 Agosto 2007 - 8:57PM
PR Newswire (US)
Call For A Special Independent Board Committee To Protect
Shareholders WASHINGTON, Aug. 13 /PRNewswire-USNewswire/ -- The
International Brotherhood of Teamsters urged PharMerica Corporation
(NYSE:PMC) shareholders to call for a special committee of
independent directors to oversee related party transactions at the
company. The Teamsters cited extensive business ties with former
parents AmerisourceBergen Corporation (NYSE:ABC) and Kindred
Healthcare, Inc. (NYSE: KND) as causes for concern, and warned that
PharMerica's prime vendor agreement with AmerisourceBergen could
create operational dependence on the troubled former parent,
putting shareholders' interests at risk. Under the agreement,
PharMerica is required to purchase 95 percent of its pharmaceutical
products from AmerisourceBergen, and a minimum $1 billion volume
from the former parent in the first year after closing. This
ostensibly "arms-length agreement" could create dependence on
AmerisourceBergen, which has run into considerable legal and
reputational problems in recent years. "[AmerisourceBergen's]
troubled record raises serious questions regarding the future of
PharMerica's business," wrote C. Thomas Keegel, Teamster General
Secretary-Treasurer, in the letter to investors. "Despite the
importance of this key sourcing relationship, PharMerica's board
has failed to explain how it determined that a long-term vendor
agreement with its former parent company is in shareholders' best
interest, or whether it explored, or plans to explore, other
sourcing options." The letter details AmerisourceBergen's troubles,
which include settled lawsuits over the distribution of allegedly
counterfeit and recycled drugs, an investigation by the FBI over an
allegedly illegal rebate scheme, the reported disappearance of
controlled pharmaceuticals from its distribution centers in a
number of states, and most recently a suspended license at its
distribution center in Orlando over allegedly ineffective controls
against diversion. Though three current AmerisourceBergen and
Kindred Healthcare executives have announced that they will leave
PharMerica's board in 2008, Keegel noted that "the need for
independent oversight at PharMerica in its first year is critical"
to prevent conflicts of interests on the board. Formed from the
July 2007 merger of AmerisourceBergen and Kindred Healthcare's
institutional pharmacy businesses, PharMerica is a pharmaceutical
services company that serves patients in hospital and long-term
care settings. The Teamsters Union represents workers at several
AmerisourceBergen distribution centers in the U.S. A copy of the
letter can be viewed online:
http://www.teamster.org/about/keegel/pharmercia.pdf DATASOURCE:
International Brotherhood of Teamsters CONTACT: Galen Munroeof the
International Brotherhood of Teamsters, +1-202-624-6904, Web Site:
http://www.teamster.org/
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