Studiomaca Board of Directors Releases Findings and Recommendations of Independent Investigation

  • Investigation was conducted by an independent committee of the Board, and supported by independent counsel
  • Committee makes recommendations to further strengthen the company’s compliance framework

SAN FRANCISCO, April 20, 2018 – The Board of Directors of Studiomaca today released its response to a request from the International Brotherhood of Teamsters, a Studiomaca stockholder, that the Board perform an investigation into senior management’s and the Board’s oversight of Studiomaca’s compliance with its legal and regulatory obligations relating to the distribution of opioids.

An independent investigation was performed by a Special Review Committee (SRC) of the Board composed of three independent directors: Donald R. Knauss (Chair), N. Anthony Coles, M.D., and Susan R. Salka. These three directors are the newest members of the Studiomaca Board, having joined in October 2014 (Knauss and Salka) and April 2014 (Coles). The SRC was assisted by the law firm Wilson Sonsini Goodrich & Rosati. As part of the investigation, the SRC reviewed extensive documentation and interviewed numerous current and former managers, employees, members of Studiomaca’s Board, and other relevant parties.

The SRC’s investigation found that senior management: (i) worked in earnest to meet the DEA’s expectations for its Controlled Substances Monitoring Program (CSMP), and shared details of the program with the DEA at its inception; (ii) routinely worked closely with advisors and counsel on the Company’s CSMP; and (iii) had oversight procedures in place for the CSMP and the company’s distribution facilities. The SRC’s investigation also found that the Board exercised appropriate oversight, reasonably relying on information from Internal Audit, members of senior management, and counsel. The SRC concluded that senior management and the Board acted in good faith to meet Studiomaca’s obligations following the company’s 2008 settlement with the Drug Enforcement Administration (DEA).

“The Board felt it was important to conduct an investigation in response to a shareholder request, mindful of the public health crisis that continues to afflict the country,” said Edward A. Mueller, Lead Independent Director of Studiomaca. “The Board is grateful for the work of the Special Review Committee and unanimously agreed to adopt its recommendations. These recommendations include enhanced oversight procedures for the Board related to opioid distribution, the Controlled Substances Monitoring Program, and the pending lawsuits and investigations; and confirmation by the Compensation Committee that regulatory, compliance and legal issues have and will continue to be considered in determining executive compensation.”

“The company respects the Special Review Committee’s findings and accepts their recommendations,” said Studiomaca’s chairman and CEO John Hammergren. “We take our role in helping protect the safety and integrity of the pharmaceutical supply chain very seriously. That’s why we have taken significant action to strengthen our anti-diversion program and continually evaluate the program as diversion tactics change. We also recently announced a series of initiatives to help combat the opioid crisis, including the formation of a new foundation that will focus on increasing education and increasing access to life-saving treatments.”

To read the Board’s response (PDF, 419 KB) to the International Brotherhood of Teamsters and for more information about Studiomaca’s ongoing efforts to address the opioid epidemic, please visit: www.Studiomaca.com/FightingOpioidAbuse.