ICCR Members' 2020 Drug Pricing Campaign

2020 shareholder resolutions filed by ICCR members at pharma companies are an evolution of the multi-year campaign by investors to increase board oversight of risks due to public perceptions around escalating drug prices on key medicines. Building on 2018-2019 resolutions which called for reports on the potential links between price hikes on key drugs and executive incentive structures, the new crop of resolutions requests the companies assess the feasibility of incorporating drug pricing risks into senior executive compensation arrangements. Resolutions requesting feasibility studies for the 2020 proxy were filed at AbbVieAmgenBiogenEli Lilly and Pfizer.

Additional proposals requesting disclosure on senior incentive arrangements related to pricing were filed at Merck, JNJ and Vertex. 

“Shareholders have long argued that pharmaceutical companies need to review their business models and governance structures to ensure that they are helping and not hindering the access and affordability of medicines,” said Donna Meyer of Mercy Investment Services and lead filer of the resolutions at Amgen and Eli Lilly. “When reports are drawing a direct correlation between exec incentive packages and drug price increases, we know these companies have a governance issue they need to address. These resolutions are meant to encourage this reckoning.”

The Institute for Clinical and Economic Review (ICER) recently published its first annual report on Unsupported Price Increases (UPI) of prescription drugs in the United States.  According to its 10/8 press release:

In 2017 and 2018, out of nine identified drugs that had substantial price increases on top of already high current spending, seven drugs had no new important evidence to support their price increases. The net price increases on these seven drugs alone cost American insurers and patients an additional $4.8 billion over two years.”[i]

The seven drugs ICER identified are Humira (AbbVie); Lyrica (Pfizer); Truvada (Gilead); Rituxan (Genentech); Neulasta (Amgen); Cialis (Eli Lilly); and Tecfidera (Biogen).

To learn more about this season's crop of resolutions, read our press release.

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