2022 Shareholder Proposals at Pharma Companies Prevail at SEC
Twelve proposals seeking information on pharma’s access to medicines strategies will go to a vote at annual meetings despite the companies’ attempts to block them from their proxies.
NEW YORK, NY, WEDNESDAY, MARCH 30th, 2022 – Shareholders engaging major pharmaceutical companies to ensure their practices promote equitable access to medicines - including COVID-19 vaccines and therapeutics - today announced that a group of proposals they put forward for 2022 proxies had survived company challenges at the SEC and would move forward to votes at shareholder meetings this spring. The proponents are members of the Interfaith Center on Corporate Responsibility (ICCR) and Investors for Opioid and Pharmaceutical Accountability (IOPA).
Of the original group of sixteen proposals requesting a range of reports and audits to assess how pharma companies are addressing health equity, twelve will be on company ballots and be voted on by shareholders despite near across-the-board challenges by the companies. Two proposals at Amgen which went unchallenged were later withdrawn by proponents due to agreements reached with the company.
Said Cathy Rowan of Trinity Health, “Companies argue that shareholder resolutions cost them time and money. Yet, when access to medicine has been clearly established as a social policy issue, they continue to ask the SEC to omit resolutions from their proxy statements with no new arguments. This is similar to when they extend patents on medicines with no meaningful change in clinical efficacy. Are these SEC challenges really a good use of investor money?”
Oxfam America filed another proposal at Moderna and Pfizer regarding the companies’ strategies to transfer tech and I.P. that would facilitate the manufacture and distribution of generic versions of their medicines to low- and middle-income countries. Diana Kearney of Oxfam America discusses the Moderna and Pfizer proposals in this video clip.
“Two years after the World Health Organization declared COVID-19 a pandemic, the unwillingness of Moderna and Pfizer to consider transferring their technology to spur global manufacturing threatens global public health and the world economy,” said Robbie Silverman Oxfam America’s Senior Manager for Private Sector Engagement. “The companies’ inability to produce enough vaccines on their own and unwillingness to relinquish their monopoly control poses material risks to the companies themselves, their shareholders, and the millions of people around the world who are still waiting for a vaccine. As we embark on the third year of the pandemic, we can – and must – gain the upper hand on the virus, but only if everyone, everywhere has access to vaccines and treatments.”
In total, seven pharma companies received shareholder resolutions in 2022, and, most received multiple proposals. Several companies received additional proposals citing governance themes, e.g. executive compensation and separation of Chair and CEO roles, that are not discussed here.
Anti-Competitive Practices proposals will be on the proxies of AbbVie, Eli Lilly, Gilead and Pfizer.
Said Amy Carr of Friends Fiduciary, “AbbVie’s reliance on anti-competitive practices to retain market share is not a sustainable business model, and further, it may place an undue cost burden on AbbVie’s customers. As investors, we believe a strategy focused on research and development of new drugs, rather than proliferating patents on existing drugs, will better support long-term value creation for shareholders.”
Lobbying Alignment with Access Strategies proposals will be on the ballots of Eli Lilly, Gilead, and J&J.
Said Laura Krausa of Common Spirit Health, "Hiding behind 'innovation' and 'medical discovery' as reasons to lobby against fair drug pricing is akin to justifying outlandish vegetable prices because you are in search of the square tomato. When vulnerable people are at risk of not having access to life-saving medicines because they are entirely unaffordable, an argument in favor of 'medical discovery' to justify those prices rings hollow and feels heartless." Laura discusses the lobbying proposals in this video clip.
Public Investment/Access proposals will be on the ballots of Merck and J&J. Similar proposals were filed and withdrawn at Pfizer and Moderna by other proponents.
“We continue to view the pandemic as a systemic risk,”said Maria Larsson Ortino of Legal & General Investment Management Ltd. “Taking into account the impact this has had on our clients’ assets, and in our role as a responsible investor, we took the unusual step of filing a shareholder resolution at Moderna. We see Moderna’s increased disclosure on access and pricing as a positive step forward. Over time, we would like to see Moderna, as well as the entire pharmaceutical sector, share components of their pricing strategy related to cost (R&D, manufacturing, distribution, marketing, etc.), particularly in cases where government funding has been made available.”
Said Lydia Kuykendal of Mercy Investment Services who filed a proposal at J&J requesting a Racial Equity Audit, “Despite racial controversies with its COVID-19 vaccine, sale of talc powder, and the creation of a company for the sole purpose of shifting liability, J&J still does not believe an independent audit of the racial impacts of its policies, practices, and products would ‘yield meaningful enhancements’. The company’s insistence that its own internal processes are sufficient exposes a blind spot that continues to negatively impact people and communities. Investors need independent assurances that J&J will not repeat its past and present missteps at the expense of communities of color.”
The proponents are expecting strong shareholder support for these proposals.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 51st year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300-member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs, and other socially responsible investors with combined assets of over $4 trillion. ICCR members engage hundreds of corporations annually to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn, and Facebook.