How rising drug costs put our health care system and the greater economy at risk, and endanger the lives of millions.
We are all painfully aware of escalating costs for prescription drugs and many of us have experienced this hardship personally. You may know someone who has skipped filling a prescription, cut their pills in half or changed their spending habits in other areas due to drug costs. What is especially frustrating to many, including those actively trying to rein in out-of-control drug costs, is a lack of transparency around pricing strategies from leading companies in the pharmaceutical industry. ICCR members have initiated a campaign that will attempt to remedy this by having drug companies report more fully on their drug pricing strategies.
According to the National Patient Advocate Foundation, one in five American families will struggle to pay a medical debt this year. Americans paid $310 billion (after taxes and rebates) for drugs in 2015, an 8.5% increase over 2014, while the Cost of Living Adjustment and the Consumer Price Index were both relatively flat at roughly 1.7 % for this same period.
The U.S. outpaces the world in the cost of branded medications in many cases by a factor of two, while a McKinsey report states prescription drugs in the U.S. cost 50% more than equivalent products in OECD countries. 43% of people in fair or poor health did not fill a prescription, or said they cut pills in half or skipped doses because of cost. Risks of patient non-compliance due to the cost of medicines present a grave threat to public health and, in turn, to the economy.
This proxy season, ICCR members have filed resolutions with 11 major U.S. pharmaceutical companies and sent letters to an additional six non U.S. companies requesting that they provide rationale and criteria that justify price increases along with an assessment of the legislative, regulatory, reputational and financial risks they represent to these companies. Read the letter. In addition, separate resolutions are being filed with a subset of these companies on lobbying disclosure and calling for separating the Chair and CEO roles.
The 11 companies receiving shareholder resolutions are:
AbbVie, Amgen Inc., Biogen, Inc., Bristol-Myers Squibb Company, Eli Lilly and Company, Gilead Sciences, Inc., Johnson & Johnson, Merck & Co., Inc., Pfizer, Inc., Regeneron Pharmaceuticals, Inc., and Vertex Pharmaceuticals Incorporated.
And the six non-U.S. companies receiving investor lettes are: Astrazeneca, GSK, Novartis, Novonordisk, Roche and Sanofi.
Read the press release here. Members of the media who are interested in learning more about this initiative can contact Susana McDermott, ICCR's Director of Communications by phone at 212-870-2938 and by email at email@example.com.
Mercy Investment Services
"Our political system was brought to a dramatic climax last week heralding potential changes to our healthcare system. The rhetoric this campaign season gave socially responsible investors good reason for concern, as we believe everyone has a human right to health care. Uncertain of what lies ahead, we reflect on our focus and our goals but we should never lose sight of the importance of access to health care nor waver from our commitment to helping those most in need.
We all know that the Affordable Care Act can be improved; for example, many states never expanded Medicaid, creating two Americas that seemed to benefit companies more than the healthcare recipients it was designed to serve. In light of this, we should consider if there are alternative ways to reach our goals. Responsible investors must continue to find ways to work within the current political system by monitoring and guiding progress on key social issues to ensure that our government serves everyone."
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