United States Securities and Exchange Commission
Washington, D.C. 20549
NOTICE OF EXEMPT SOLICITATION
Pursuant to Rule 14a-103
Name of the Registrant: Walgreens Boots Alliance, Inc.
Name of persons relying on exemption: Katie Carter, Presbyterian Church
(U.S.A.)
Address of persons relying on exemption: 100 Witherspoon St., Louisville,
KY, 40202
Written materials are submitted pursuant to Rule 14a-6(g)(1) promulgated
under the Securities Exchange Act of 1934. Submission is not required of this filer under the terms of the Rule but is made voluntarily
in the interest of public disclosure and consideration of these important issues.
PROXY MEMORANDUM
TO: |
Walgreens Boots Alliance, Inc. Shareholders |
RE: |
Item No. 9 (“Stockholder proposal requesting report on risks of reproductive healthcare legislation”) |
DATE: |
December 22, 2023 |
|
|
CONTACT: |
Katie Carter, Presbyterian Church (U.S.A.) at Katie.Carter@pcusa.org |
This is not a solicitation of authority to vote your proxy. Please
DO NOT send us your proxy card; Presbyterian Church (U.S.A.) is not able to vote your proxies, nor does this communication contemplate
such an event.
Presbyterian Church, U.S.A. urges shareholders to vote YES on
Item No. 9 on the 2024 proxy ballot of Walgreens Boots Alliance, Inc. (“Walgreens” or “the Company”). The Resolved
clause states:
RESOLVED: Shareholders request that Walgreens issue a public
report prior to December 31, 2024, omitting confidential and privileged information and at a reasonable expense, detailing any known and
any potential risks and costs to the company caused by enacted or proposed state and federal laws regarding mifepristone and other reproductive
health medications, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate
these risks.
The full text of the proposal can be read here:
https://s1.q4cdn.com/343380161/files/doc_financials/2023/ar/wba-2024-notice-of-annual-proxy-statement.pdf#page=120
Summary
| ● | Mifepristone, a medication prescribed for miscarriage management or to induce abortion in combination with the drug misoprostol that
has been safely used for over 20 years, is now able to be sold at retail pharmacies such as Walgreens after the pharmacy applies for certification. |
| ● | Walgreens has provided various, arguably contradictory, statements related to mifepristone. To the extent Walgreens has clarified
its current policy, it is still unclear how Walgreens is managing related risks, such as how it makes decisions on where it can legally
distribute medication. |
| ● | Walgreens is exposed to risks as a result of its statements and management. For example, Walgreens’ oversight of this issue
has already risked a $54 million dollar contract with the state of California. |
Investors are concerned that Walgreens has not properly overseen
risks related to the decision to distribute, or not distribute, mifepristone.
Government regulation for certain medications is constantly developing
through Food and Drug Administration (FDA) regulations, legislation, and judicial decisions. Walgreens must necessarily navigate these
evolving regulations to mitigate legal and reputational risks.
Mifepristone was first approved by the FDA in September 2000.1
In the 23 years since approval, mifepristone has been used by millions of women in over 50% of abortions and has been proven to be overwhelmingly
safe and effective.2 In January 2023, the FDA enacted a regulatory change allowing retail pharmacies such Walgreens to apply
for certification to sell and dispense mifepristone, a medication prescribed for miscarriage management or to induce abortion in combination
with the drug misoprostol.
After the FDA regulatory change, twenty Republican attorneys general
sent a letter to Walgreens and CVS warning the companies of potential legal violations from dispensing mifepristone through the mail.3
Fifteen days later, on February 16th, twenty-three Democratic attorneys general also wrote to Walgreens refuting the claims made in the
Republican attorneys general letter and supporting Walgreens’ ability to offer mifepristone.4
Walgreens’ response to the Republican attorneys general stated
that it would not dispense this medication in any of their respective states.5 This included Kansas, where it is legal to do
so.6 At the same time, a statement released by Walgreens also maintains that once certified by the FDA, it “will dispense
this medication consistent with federal and state laws” in “any jurisdiction where it is legally permissible to do so.”7
These statements appear to be contradictory. Walgreens’ policy regarding mifepristone is confusing and unclear to customers, the
medical community, shareholders and other stakeholders. The company failed to reply to several attempts by shareholders in recent months
to obtain a clarification of the policy.
Walgreens’ letters to the attorneys general resulted in significant
negative media attention and reputational damage. (For instance, see articles in Vanity Fair titled “Walgreens Caves to Antiabortion
Republicans”8 and in the LA Times titled “A spineless Walgreens bows down to anti abortion crusaders.”9)
Senator Richard Blumenthal referenced Walgreens in letters to its competitors such as CVS by stating,
“[Walgreens’] blanket decision is an abdication
of Walgreens’ responsibility as a health care provider. It has decided, in effect, to put profits over people. It is succumbing
to bullying and intimidation by hard right ideologues, saying, ‘you win, women lose.’”10
_____________________________
1 https://www.fda.gov/drugs/postmarket-drug-safety-information-patients-and-providers/questions-and-answers-mifepristone-medical-termination-pregnancy-through-ten-weeks-gestation
2 https://www.guttmacher.org/article/2022/02/medication-abortion-now-accounts-more-half-all-us-abortions
3 https://ago.mo.gov/wp-content/uploads/attachments/2023-02-01-fda-rule---walgreens-letter-danielle-gray.pdf?sfvrsn=ff1e6652_2
4 https://ag.ny.gov/sites/default/files/2-16-23_multistate_pharmacy_letter.pdf
5 https://ag.ks.gov/docs/default-source/documents/dg-mifepristone-letter-to-ks-ag.pdf?sfvrsn=bc6bd1a_2
6 https://tinyurl.com/yc5nhpkj and see https://tinyurl.com/yc64puxc
7 https://news.walgreens.com/press-center/mifepristone-resources/
8 https://tinyurl.com/yusczce8
9 https://tinyurl.com/bdy5f2pw
10 https://www.blumenthal.senate.gov/imo/media/doc/03062023cvs_mifepristone_dispensingletter.pdf
Walgreens’ failure to publicly clarify its position invites boycotts
or other retaliation. In response to Walgreens’ statement that it would not distribute mifepristone in 21 states, including states
where abortion is legal, Governor Gavin Newsom announced that California would not be renewing its $54 million contract with Walgreens.11
Governor Newsom tweeted: “California won’t be doing business with @Walgreens -- or any company that cowers to the extremists
and puts women’s lives at risk. We’re done.”12 Ultimately, the state was unable to cancel the contract because
of federal Medicaid requirements, but future boycotts may be successful.
This ongoing lack of clarity on how Walgreens
is overseeing risk leaves investors with uncertainty regarding potential or realized costs, reputational risk, compliance issues, and
more. Walgreens must demonstrate to investors that it has, and is prepared to continue, proper oversight of these risks and uncertainties.
Response to Opposition Statement
Walgreens’ Board of Directors issued an Opposition Statement
in response to the Proposal. First, Walgreens argues that: “The Board believes that Walgreens has been and remains clear on its
position, which is to dispense mifepristone where it is legal to do so.”
To the contrary, Walgreens has been far from clear on its position
on mifepristone. As explained above, Walgreens told the Kansas Attorney General that it “does not intend to dispense Mifepristone
within your state”13 even though abortion is legal in Kansas up to 22 weeks.14 This appears to be in direct
contradiction to its current position that it “will dispense this drug where it is legal to do so.”
Further, determining the clarity of Walgreens’ position does
not satisfy the Proposal request because the Proposal does not ask for the Company’s position. Instead, after identifying instances
of concerning oversight and decision making, the Proposal requests a public report “detailing any known and any potential risks
and costs to the company caused by enacted or proposed state and federal laws regarding mifepristone and other reproductive health
medications, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or
mitigate these risks.” The Supporting Statement then continues to request that the report identify the Company's policy on
reconciling federal and state law and how political factors or litigation threats may influence the Company's decision of where it
can legally dispense medications.
_____________________________
11 https://www.gov.ca.gov/2023/03/08/governor-newsom-california-pulls-back-renewal-of-walgreens-contract/
12 https://apnews.com/article/california-walgreens-contract-abortion-medication-newsom-b3e04f48503fcaec414b456d083c56ed
13 https://tinyurl.com/yc5nhpkj and see https://tinyurl.com/yc64puxc
14 https://states.guttmacher.org/policies/kansas/abortion-policies
Walgreens has not detailed any known or potential risks to the Company.
It has not detailed any strategies that it may deploy to minimize those risks. Walgreens has not explained how the Company reconciles
federal and state law, nor has it explained how political factors or litigation threats may influence decisions on where the Company can
legally dispense medications. Further disclosure is necessary.
Walgreens continues to state that it will dispense mifepristone “where
it is legal to do so.” But that begs the questions - where is it legal to do so and how does the Company make those decisions? Investors,
pharmacists, physicians, and patients are still left in the dark. Walgreens itself appears to have made contradictory determinations about
what states legally allow for distribution of mifepristone. Clarity on how it makes these determinations will assist investors in overseeing
Walgreens’ risk management.
Second, Walgreens argues that “The Board believes that the report
requested is unnecessary and does not enhance stockholder value.”
The economic risks posed by Walgreens’ management of this issue
are clear from the $54 million contract with the State of California that was nearly canceled. Governor Gavin Newsom attempted but failed
to revoke the contract due to federal Medicaid requirements. However, future institutional boycotts may find ways to be successful.
Further, Walgreens is at risk of falling behind its competitors. Medication
abortion accounts for over 50% of all abortions.15 There is a large, new market for retail distribution of mifepristone. Some
pharmacies are already distributing the medication. Large competitors of Walgreens have been consistent in their position that they would
seek certification and dispense mifepristone in states where it is legal. Unlike Walgreens, those competitors did not receive negative
media backlash or risk the loss of major contracts because they were consistent in their messaging.
Ultimately, the requested report enhances stockholder value by providing
transparency and ensuring that risk is being properly mitigated. The full spectrum of potential risks and costs to the Company is vast
and there could be significant consequences to the value of the Company if Walgreens is not exercising proper oversight.
Conclusion
The way in which Walgreens has handled decision making and communication
around mifepristone leaves investors concerned that it is not properly overseeing the risks and costs to the Company. State and federal
legislation and regulation are constantly evolving when it comes to mifepristone, including a pending case in the United States Supreme
Court. It is necessary for Walgreens to show investors that it is properly mitigating related risks and will continue to do so as the
law evolves.
_____________________________
15 https://www.guttmacher.org/article/2022/02/medication-abortion-now-accounts-more-half-all-us-abortions
Vote “Yes” on this Shareholder Proposal No. 9.
For questions, please contact Katie Carter, Presbyterian Church,
U.S.A. at Katie.Carter@pcusa.org.
THE FOREGOING INFORMATION MAY BE DISSEMINATED TO SHAREHOLDERS VIA TELEPHONE,
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OF AUTHORITY TO VOTE YOUR PROXY. THE COST OF DISSEMINATING THE FOREGOING INFORMATION TO SHAREHOLDERS IS BEING BORNE ENTIRELY BY THE FILER
OF THIS SOLICITATION. PROXY CARDS WILL NOT BE ACCEPTED. PLEASE DO NOT SEND YOUR PROXY TO PRESBYTERIAN CHURCH, U.S.A. TO VOTE YOUR PROXY,
PLEASE FOLLOW THE INSTRUCTIONS ON YOUR PROXY CARD.
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