In spite of nearly one-third support for shareholder proposals at J&J, Merck and Pfizer seeking to understand how public investments will be factored into access and affordability strategies, the companies remain unresponsive.
NEW YORK, NY, THURSDAY, JUNE 3rd, 2021 – Proposals submitted to three pharma companies in receipt of public funding for the development and distribution of COVID-19 medicines recently went to a vote at the annual meetings of Johnson & Johnson ($JNJ), Merck ($MRK) and Pfizer ($PFE) where they received impressive shareholder votes of 32%, 33% and 28% in favor respectively.
In spite of this strong outcome, the companies are refusing to respond to the requests of the proposals.
The proponents are members of the Interfaith Center on Corporate Responsibility and long-term shareholders of major pharma companies who have been engaging the pharma sector with the goal of increasing the equitable access and affordability of medicine. The proposal asked whether and how government financial support is being, or will be, considered by the companies when developing their access strategies, including pricing. Given that taxpayer monies and government contracts significantly supported the R&D, manufacturing and distribution of COVID-19 medicines, and that the public assumed much of the risk, the investors say the proposals were intended as an accountability mechanism to ensure the pharma companies were prioritizing access.
“When a third of your investors say ‘this information is important to us’ we believe the company has an obligation to meaningfully respond, particularly as they are in receipt of public funds for R&D,” said Chris Cox of Seventh Generation Interfaith Coalition for Responsible Investment who filed the proposal with Merck. “Pharma companies already carry huge reputational risks as a result of exorbitant drug pricing. Sharing information about how these companies are prioritizing equitable access during the pandemic could go a long way to restoring their credibility.”
The global gaps in vaccine access are playing out in real time as wealthier countries like the U.S. enjoy a surfeit of vaccines while less affluent countries in Asia and South America struggle with second and third waves of the virus and a woefully inadequate vaccine supply.
“More than a billion doses of vaccine have been administered globally - but just 0.3% have been administered to people living in low-income countries,” said Cathy Rowan of Trinity Health who filed the resolution at Pfizer. “We see advancing global vaccine access as our moral responsibility as part of a global community at the service of the common good.”
In early May, President Biden and U.S. Trade Representative Katherine Tai announced they will support a temporary waiver of intellectual property (IP) protections for COVID-19 vaccines, known as the TRIPS waiver, to facilitate their manufacture by generics companies to ease the COVID burden in low-and middle-income countries.
Continued Rowan, “We are gratified that the administration took note of these inequities in access and is taking the necessary steps to redress it.”
In an attempt to head off the implementation of the TRIPS waiver, an industry trade group, the International Federation of Pharmaceutical Manufacturers and Associations, developed a five-point plan to “urgently advance COVID-19 vaccine equity”. Critics of the plan say it fails to address non-profit pricing and price transparency and says nothing about working with smaller manufacturers in low- and middle-income countries or collaborating with more open licensing, technology transfer, and IP pooling.
“Failure to ensure global access to vaccines now and into the future is widely expected by economists to hinder the global economy’s ability to revive itself, ultimately harming not only people but also the overall portfolios of shareholders,” said Nicholas Lusiani of Oxfam America, who filed the resolution at Johnson & Johnson. “We have enough shareholder support with this year’s vote to achieve a majority next proxy season. In the meantime, these companies have been put on notice that investors will be watching their actions very closely.”
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 50th 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 in an effort to foster greater corporate accountability. Visit our website www.iccr.org and follow us on Twitter, LinkedIn and Facebook.