By Alan Murray and Tom Huddleston Jr.
June 13, 2017

Good morning.

While the rise of technology companies is the biggest story behind this year’s Fortune 500 list, skyrocketing health company growth is an equally impressive theme. The big-three drug distributors stand out, with McKesson grabbing the number 5 spot on the list, AmerisourceBergen taking number 11, and Cardinal Health clocking in at 15.

But as those companies’ revenues and profits have skyrocketed, so too has another set of statistics, documenting the nation’s opioid crisis—causing 30,000 deaths in 2015, or approximately 91 lives every day. That has led some to say the big drug distributors must take responsibility for the crisis. A Pulitzer Prize winning series in the Charleston Gazette Mail last year highlighted the sheer volume of opioids being pumped into West Virginia—433 pills for every man, woman and child. “In my thinking,” says Martin West, who is both sheriff and treasurer of McDowell County, W.Va.—one of the hardest hit by the crisis—drug distribution companies are “no different than drug dealers selling on the street.”

The distributors insist they are just middlemen, following all relevant laws and regulations. But even if true, is that sufficient? That’s a question that leaders of companies of all stripes must ask themselves in today’s world, where a social-media-stoked public is quick to assign moral responsibility to companies that they believe have gone astray.

Fortune’s Erika Fry has done a fascinating, in-depth look at McKesson’s effort to deal with this quandary. Her story shows that the company was slow to accept responsibility. “I’m sure there was no malevolent desire to flood the streets with narcotics,” says assistant U.S. attorney Alan McGonigal. But “there was just too much emphasis on sales numbers and not enough with keeping an eye on suspicious orders.”

More recently, the companies—prodded by various lawsuits and regulatory efforts—have begun to get religion. Last year, McKesson CEO John Hammergren put together a task force that is circulating a white paper in Washington calling for, among other things, a high-tech Patient Safety System that provides real time data to physicians and pharmacists to help identify at-risk patients. That’s overdue.

Erika’s story on McKesson—a case study that every business leader needs to read—is in the new issue of Fortune magazine, and can be found online here.

I’m at the Fortune Most Powerful Women London summit, where supermodel Naomi Campbell captivated the group with a discussion of her philanthropy over dinner last night. You can read full coverage from the summit here.

News below.

 

Alan Murray
@alansmurray
alan.murray@fortune.com

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