Azzad Asset Management, investment advisor to the Azzad Funds, announced today that it has submitted drug pricing proposals to Merck & Co. and Gilead Sciences, two major pharmaceutical companies that manufacture some of America's most popular prescription drugs.
The proposals request the companies' boards of directors to issue a report listing the rates of price increases between 2010 and 2016, including the rationale for the price increases. Stockholders should be able to vote on the proposals during each company's annual meeting next spring.
"Our clients, many of whom are physicians, believe that everyone has a human right to health care and that access should be available to all segments of society, especially those most in need," said Azzad President and CEO Bashar Qasem. "Proposed changes to the Affordable Care Act by the incoming presidential administration make this request all the more urgent."
The cover letter Merck and Gilead reads in part:
" … [M]ore than 40% of people in fair or poor health have reportedly not filled a prescription or have reduced 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. The regulatory, reputational, and financial risks associated with an opaque pricing policy threatens the health of your company as well as our investment. We believe that it is in all parties' interest to set the record straight with respect to pricing and risk assessment."
Americans paid $310 billion (after taxes and rebates) for drugs in 2015. According to the National Patient Advocate Foundation, one in five American families will struggle to pay a medical debt this year. And a recent McKinsey report found that prescription drugs in the U.S. cost 50% more than equivalent products in other Organization for Economic Cooperation and Development nations.
Proposals like Azzad's, commonly referred to as shareholder resolutions, may be submitted by groups or individuals who have owned a minimum specified amount of stock for at least one year.
This year, members of the Interfaith Center on Corporate Responsibility (ICCR), including Azzad, have filed resolutions with 11 major U.S. pharmaceutical companies and sent letters to an additional six non-U.S. companies advocating a reasoned and fair re-assessment of pricing policy.
See: 2017 Resolutions with Pharma Companies (ICCR)
Shareholder activism is an important part of Azzad's ethical investing philosophy. In addition to a longstanding practice of proxy voting in accordance with ethical guidelines, the firm has in recent months elevated its involvement in advocacy efforts by engaging corporations directly on matters of policy.
Azzad Asset Management, investment advisor to the Azzad Funds, is committed to providing investment services designed to help people enjoy optimum performance without compromising their values. Azzad believes that companies operating in ethical lines of business offer relatively less business risk and are in a better position to thrive in the long-term. The firm's proprietary screening process allows the manager to prudently manage client assets in a manner consistent with their values.
Azzad is a member of the Forum for Sustainable and Responsible Investment, the Interfaith Center on Corporate Responsibility, and the Accounting and Auditing Organization for Islamic Financial Institutions.