Responsible investors have tabled shareholder resolutions calling on US pharmaceutical companies to offer Covid vaccines at affordable prices – especially when they have been developed using substantial levels of public funding.
Members of the Interfaith Center on Corporate Responsibility (IICR) in the US have filed proposals at Eli Lilly, J&J, Merck, Pfizer, Gilead and Regeneron ahead of their 2021 AGMs.
The lead filers at the firms, in order, are: Mercy Investment Services, Oxfam America, Seventh Generation Interfaith Coalition for Responsible Investment, Trinity Heath and Boston Common Asset Management.
“Pharma companies will face significant reputational and legal risks if they are even remotely seen to be profiteering from this deadly pandemic,” said Lauren Compere of Boston Common, pointing to a recent poll showing that nine out of 10 Americans are concerned that drug companies will use the pandemic to raise prices. “Those companies that have accepted taxpayer dollars for R&D will come under heightened scrutiny,” she added. “These proposals are meant to help these companies get ahead of these risks and, in the process, restore the trust of the public and other stakeholders.”
Details about the support that drug companies have received from governments to develop covid vaccines are currently confidential. However, a group of US legislators has proposed a new bill, known as TRACK, which would require companies to disclose the financial and non-financial federal support they have received in a public database.
‘Pharma companies will face significant reputational and legal risks if they are even remotely seen to be profiteering from this deadly pandemic’
BlackRock, Fidelity Management & Research Co, Northern Trust Investments, Norges Bank Investment Management, Wellington and State Street Global Advisors are among the largest shareholders of the companies being targeted. BlackRock, State Street and Wellington declined to comment on whether they planned to support the proposals, while Northern Trust, Norges Bank and Fidelity did not respond to a request for comment at the time of publication.
The resolutions are part of a broader ICCR initiative to promote improved access and affordability of COVID-related medicine. In August, 59 investors representing $2.5trn in assets penned a letter to 17 pharmaceutical companies asking them to commit to ensuring widespread access to treatments and vaccines for COVID-19, including affordable pricing and the sharing of technology to scale-up manufacturing.
Donna Meyer, Director of Shareholder Advocacy at Mercy Investments Services, and Co-chair of the Investors for Opioid and Pharmaceutical Accountability, said that the growing public scrutiny on drug companies because of Covid could put “wind in the sails” of investors that have been engaging with the firms for a while already. “If you've got public support, you can go further, faster,” she explained.
Compere added that the election of Joe Biden as US President could provide a “more balanced perspective when it comes to corporate versus social contract issues,” which would also bolster this kind of engagement.