SGI Webinar Recording: Health

Hearing from both members and ICCR colleagues (Donna Meyer of Mercy Investment Servces and Meg Jones-Monteiro of the ICCR staff), this webinar provides tools for an understanding of our engagements in nutrition, insurance, pharmaceuticals, tobacco, and opioids as well as global health issues. This webinar also proposes time efficient ways of deepening our engagement with these issues.

The article, mentioned by Donna, about the relative expenses of research and development and marketing for pharmaceutical companies can be found here or in a PDF version here.

If you have any questions from the content of the webinar, please, feel free to direct them to us at SeventhGenerationInt@gmail.com.

As always, we welcome your feedback via a confidential evaluation found here.

SGI Health Webinar on April 20

We are pleased to offer our second quarterly webinar on shareholder engagement in health. The webinar will take place on Friday, April 20th, at 10 a.m. (Central). It will last 90 minutes. We will hear from both members and ICCR colleagues who lead components of our health campaigns. This webinar will provide tools for an understanding of our engagements in nutrition, insurance, pharmaceuticals, tobacco, and opioids as well as global health issues. This webinar will also propose time efficient ways of deepening our engagement with these issues.

SGI members should have received an email with the data to log on to the webinar. If for some reason you have not received it, please contact our associate director, Chris Cox, at SeventhGenerationInt@gmail.com.

SGI members join investor letter to Walt Disney regarding tobacco depictions in films

When CEO Bob Iger said, during a Q&A session at Disney’s 2015 annual shareholder meeting, the company will “absolutely prohibit” the use of smoking in Disney films rated PG-13 and under, faith-based investors lauded the decision. It built on a prior commitment from 2007 that prohibited smoking in Disney films, but not yet across their brands.

The 2015 commitment was not a decision limited to certain labels: “We are extending our policy to prohibit smoking in movies across the board: Marvel, Lucas, Pixar, and Disney films,” said Iger. Iger offered only two exceptions: films which involve historical figures known for smoking, or scenes that portray smoking in a negative light (emphasizing the detrimental health consequences of smoking). Disney’s full policy can be found here.

In December of 2017, Disney acquired Fox film and television for $52 billion. It remains unclear what Disney will do with the new acquisitions.

SGI and its members joined other investors in a letter to Disney that calls upon the company to apply the same standards to the film and television properties acquired from Fox that it applies to other film and television holdings already within its portfolio.

Again, read the full investor letter here.

Investors say executive pay packages at pharma may incentivize drug pricing risks

Today, the ICCR published a press release about resolutions filed with five U.S. pharmaceutical companies. SGI members are co-filers on each of the five resolutions. These resolutions are important components of SGI’s activity this year in health. The resolutions can be described as tools to gain insight into how executive compensation aligns with the values, vision, and business strategy of the companies.

This post will be updated with media coverage:

The press release is shared in full below.

Investors say executive pay packages at pharma may incentivize drug pricing risks

DATE:
Dec 13th 2017

In resolutions at five U.S. drug makers, investors request a review of compensation policies that may drive senior execs to ignore the long-term business risks of skyrocketing drug costs.

NEW YORK, NY, Wednesday, December 13, 2017 – Investors today announced they have filed resolutions at five major pharmaceutical companies asking for information about how well executive pay incentives mitigate long-term financial risks associated with mounting public concerns over the affordability of prescription medicines.

The investors are all members of the Interfaith Center on Corporate Responsibility (ICCR), a shareholder coalition that has been engaging the pharma sector for decades on drug access and affordability. In the resolutions, the investors argue that an executive compensation incentive program reliant on revenue growth solely from drug price increases is a risky and unsustainable strategy.

The resolution specifically requests a report on the extent to which risks related to public concern over drug pricing strategies are reflected in executive compensation policies, plans and programs. Read the full resolution text here. The five companies receiving the resolutions are Abbvie, Amgen, Biogen, Bristol Myers Squibb, and Eli Lilly. ICCR members also filed a separate but similar resolution at Pfizer and Vertex requesting a report on the business risks from rising pressure to contain U.S. prescription drug prices.

“As investors in these companies, we are concerned that misaligned incentive pay may encourage executives to sacrifice long-term, organic growth from drug discovery for short-term, ‘quick fix’ strategies that may pose business risks,” said Meredith Miller of the UAW Retiree Medical Benefits Trust.

Public anxiety over drug prices has soared in recent years as millions of Americans struggle to afford the essential medicines needed to maintain their health. Scandals over excessive price hikes at several pharma companies have made the pharma industry the target of Congressional hearings, law suits, denials of coverage from insurers and ballot initiatives in several states which would force manufacturers to negotiate the prices of key medicines with government agencies such as Medicare and Medicaid.

Against this backdrop, the investors say, companies need to prove to their investors and to the public that they are doing everything possible to control drug prices in order to manage business and brand risk. The investors view executive incentive programs as a governance tool designed to ensure adequate oversight of risk and alignment of corporate strategies with mission.

Said Donna Meyer of Mercy Investment Services, “The increased scrutiny around drug pricing and how it is being managed by pharma management has had reputational consequences for the entire industry. Our resolution request is very straightforward: an evaluation of how these concerns are being integrated into corporate governance structures. To the degree that executive incentives reflect a company’s mission and growth strategies, this is clearly a critical and material issue for investors.”

“Our goal is to better understand what oversight these pharmaceutical company boards are exercising when executive incentives are tied so closely to profits,” said Cathy Rowan, who represents Trinity Health as a member of ICCR. “When these profits appear to be derived wholly from price hikes, it raises concerns among those of us who care about access to, and the affordability of, medicines — particularly for vulnerable populations like women, children and seniors.”

Investors are expected to vote on the resolutions at each company’s 2018 annual meeting of shareholders.

Access to Medicine Index: Critical tool for investors

Pharmaceutical companies have been receiving some bad press in the United States for unprecedented price increases of life savings drugs. Given the difficulty for people in this country to afford these medicines, imagine how much more difficult it must be for citizens of nations where even basic medicines are a challenge to obtain. An important tool

The Access to Medicine Foundation, an international nonprofit organization based in the Netherlands, is dedicated to improving access to medicine for people in need. Their award-winning initiative called the Access to Medicine Index (ATMI), launched in 2008 ranks the world’s 20 largest research-based pharmaceutical companies according to their efforts to improve access to medicine in low- to middle-income countries. The 2016 edition of the ATMI can be found here.

2016 ATMI rankings

The ATMI assesses how companies perform in the following areas: management of access to their medicine; market influence and compliance; research and development; pricing, manufacturing and distribution; patents and licensing; capacity building; and product donation. By comparing companies to one another, the ATMI aims to stimulate pharmaceutical companies to play a bigger role in addressing the challenges of access to medicine in developing countries and to offer them insight into the activities of their peers. As well, the ATMI seeks to create a platform for stakeholders from the pharmaceutical industry, governments, investors, civil society, patient organizations and academia to gather and form a common view of how these pharmaceutical companies can make further progress.

For us at SGI, the ATMI, and the work behind it, is incredibly valuable. I was a part of a recent conversation with staff from the Access to Medicine Foundation and can only salute the foundation’s transparency, its openness to input from stakeholders, its solid research, and its contribution to making the pharmaceutical industry better serve the poor. As credible third party research, the ATMI helps us work toward important goals in our dialogues with pharmaceutical companies.

SGI is deeply committed to its work in health. The late Fr. Mike Crosby, O.F.M., Cap. was a pioneer in engagement with tobacco companies. Today, Marty Roers continues the work in tobacco for the Sisters of St. Joseph of Carondolet.  Sr. Judy Sinnwell, O.S.F. (Sisters of St. Francis of Dubuque) engages several pharmaceutical companies on the affordability of medicine. Ann Roberts at Dana Investment Advisors, Inc. and Fr. Robert Wotypka, O.F.M., Cap. (of the Capuchin Franciscan Province of St. Joseph) are also engaged with companies on drug pricing.

To learn more about the ATMI: