Investors say JNJ management has been stubbornly dismissive of their calls to prioritize equitable vaccine access, further jeopardizing African lives, the global economic recovery, and the company’s social license to operate.
NEW YORK, NY, WEDNESDAY, AUGUST 18TH, 2021 – As news broke on Monday that Johnson & Johnson ($JNJ) has been prioritizing the export of COVID-19 vaccines manufactured in South Africa to wealthier nations on the European continent over the fulfillment of its contract to distribute the vaccines locally, investors who have issued multiple warnings of potential vaccine inequities expressed their frustration and outrage.
The investors are members of the Interfaith Center on Corporate Responsibility who have long engaged pharma companies, including JNJ, on access and affordability concerns. Investors say they repeatedly warned JNJ management as early as March 2020 via letters, resolutions and in dialogues that a failure to prioritize the neediest nations in the distribution of COVID-19 vaccines and meds could further entrench global racial and economic disparities, dramatically impact the course of the virus, and imperil the global economic recovery. Investors warned the company of potential “inequities akin to a “vaccine apartheid” that could endanger lives and create serious brand risk.
“The fact that South Africa is being forced to export COVID vaccine doses to European countries instead of vaccinating those in their country is the epitome of the outrageous inequality in our global response to COVID,” said Diana Kearney, Senior Legal Advisor for Oxfam America and lead filer of a shareholder proposal filed at JNJ by ICCR members last fall on vaccine equity that received nearly one-third of shareholder support. “JNJ should be working with other manufacturers to ensure the manufacturing of enough doses for everyone, everywhere. No one will be safe until everyone is safe.”
As the world first began to grapple with the COVID-19 pandemic, many public health officials foresaw it would not be an equal opportunity virus; in fact, COVID-19 has been quite efficient in exacerbating the systemic inequities that have long plagued marginalized communities, often people of color, where structural racism, discrimination, and the negative impact of both corporate and social influencers of health have put them at an extreme disadvantage.
At a news briefing of the World Health Organization in January 2021, Director-General Tedros Adhanom Ghebreyesus called the growing inequities in the distribution of COVID 19 vaccines “grotesque” and “another brick in the wall for inequality between the world’s haves and have-nots”. He further said the world was on the verge of “a moral catastrophe”.
The less expensive, single-shot JNJ vaccine was meant to answer this concern. In its contracts with the South African government, JNJ promised enough vaccines to eventually inoculate one-third of the country’s residents. The fact that the vaccine would be bottled and packaged in South Africa further raised hopes that those vaccines would remain on the continent: this, however, did not come to pass.
According to the NY Times, “South Africa is still waiting to receive the overwhelming majority of the 31 million vaccine doses it ordered from Johnson & Johnson. It has administered only about two million Johnson & Johnson shots… At the same time, Johnson & Johnson has been exporting millions of doses that were bottled and packaged in South Africa for distribution in Europe, according to executives at Johnson & Johnson and the South African manufacturer, Aspen Pharmacare, as well as South African government export records reviewed by The New York Times.”
Investors say JNJ also employed unjust tactics to exact special provisions in the negotiation of its contract with the South African government that it did not employ with other countries. For example, JNJ insisted on a special clause to ensure the company could manufacture the vaccine in-country without facing the prospect of an export ban. The contract also prevented the South African government from suing J&J and requiring a very high burden of proof that any injuries or illnesses following injection were the results of the vaccine. South African officials were given no choice: either agree to the provisions or they would not receive the vaccine.
Meanwhile, in its “Our Race to Health Equity” statement on its website, JNJ claims it “Aspires to help eradicate racial and social injustice as a public health threat by eliminating health inequities for people of color,” and commits to “Lead and leverage J&J's powerful partnership network to combat racial and social health determinants.”
“We are staggered that a company with a stated commitment to health equity would wield its power to exact these unreasonable demands of the South African government in the midst of a deadly pandemic – demands it did not exact of other nations,” said Cathy Rowan of Trinity Health. “Only 7% of South Africans have received their first vaccination yet in the EU approximately 70% of the adult population is vaccinated. As the country faces a third wave of COVID-19 made even direr by the Delta variant, JNJ’s failure to honor its commitment to deliver 31 million vaccines and its coercive negotiating tactics will be viewed as preying on the desperation of lesser-resourced nations.”
The investors point to a study published by the Rand Corporation initially projecting the global cost associated with COVID-19 and its economic impact to be $3.4 trillion a year if the vaccines are equitably distributed. If the vaccines aren’t distributed equitably, however, that projection jumps to a loss of $9 trillion dollars in wealth, something ICCR members say should be cause for concern for all diversified shareholders.
“Inequitable vaccine distribution will not only wreak havoc on the lives of those Africans who are now hospitalized and dying as a result, but it will also prolong the pandemic by leaving enormous swathes of our global population unprotected, creating space for variants to breed and an unthinkable public health emergency to fester,” said Sr. Judy Byron of the Northwest Coalition for Responsible Investment. “ICCR members first mobilized 50 years ago to encourage companies to do their part to abolish apartheid in South Africa. How discouraging to see that these ghosts of racism still haunt us.”