Organization: Mallinckrodt PLC

Year: 2019

Whereas: Whereas, we believe in full disclosure of Mallinckrodt's direct and indirect lobbying activities and expenditures to assess whether Mallinckrodt's lobbying is consistent with Mallinckrodt's expressed goals and in the best interests of shareholders.

Resolved: Resolved: The shareholders of Mallinckrodt request the preparation of a report, updated annually, disclosing 1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. 2. Payments by Mallinckrodt used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. 3. Mallinckrodt's membership in and payments to any tax exempt organization that writes and endorses model legislation. 4. Description of the decision making process and oversight by management and the Board for making payments described in section 2 and 3 above. For purposes of this proposal, a 'grassroots lobbying communication' is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. 'Indirect lobbying' is lobbying engaged in by a trade association or other organization of which Mallinckrodt is a member. Both 'direct and indirect lobbying' and 'grassroots lobbying communications' include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Mallinckrodt's website.

Supporting Statement:Supporting Statement We encourage transparency in the use of funds to lobby. Mallinckrodt spent $3,540,000 in 2016 and 2017 on federal lobbying. This figure does not include lobbying expenditures to influence legislation in states, where Mallinckrodt also lobbies, but disclosure is uneven or absent. For example, Mallinckrodt spent $165,110 lobbying in New Jersey in 2016 - 2017. Mallinckrodt's lobbying on opioids has attracted media attention ('A Drug Maker Spends Big in Washington to Make Itself Heard,' New York Times, July 21, 2017). Mallinckrodt sits on the board of the Biotechnology Industry Organization, which spent $18,620,000 on lobbying in 2016 2017. Mallinckrodt is also listed as a member of the Healthcare Leadership Council and the Healthcare Institute of New Jersey. Mallinckrodt does not disclose its memberships in, or payments to, trade associations, or the amounts used for lobbying. And Mallinckrodt does not disclose its contributions to tax exempt organizations that write and endorse model legislation, such as its membership in the American Legislative Exchange Council (ALEC). We are concerned that Mallinckrodt's lack of lobbying disclosure presents significant reputational risk. For example, pharmaceutical company donations to patient advocacy groups are attracting heightened media scrutiny ('Is Big Pharma Getting Patient Advocates' to Do Its Lobbying Work?' Kaiser Health News, April 6, 2018). And corporate ALEC memberships have drawn negative publicity ('Broad Coalition Calls on Corporations to Drop Funding for ALEC Over Horowitz Speeches,' PR Watch, August 27, 2018). Over 110 companies have publicly left ALEC, including Allergan, Amgen, AstraZeneca, Bristol Myers Squibb, GlaxoSmithKline, Johnson & Johnson, Medtronic and Merck.