More than three dozen asset managers, pension funds, and insurers are urging the pharmaceutical industry to cooperate in the fight against Covid-19 by sharing research data and providing affordable worldwide access to medicines, diagnostics, and vaccines.
In a letter to be sent to more than 15 large drug makers — including Roche (RHHBY), Gilead Sciences (GILD), and Johnson & Johnson (JNJ) — the investment firms argue that “financial considerations should take second place in the global challenge of getting the coronavirus under control as quickly as possible.”
Moreover, the firms vowed to “closely monitor” the drug makers in which they invest in coming months and also promised that concerns surrounding Covid-19 medical products will be tracked during shareholder meetings as well as the “normal” interactions with company managements.
“As an engaged shareholder, we are always in dialogue with the companies we invest in and we now want to use our influence to combat this crisis that is affecting us all,” said Bianca Tetteroo, vice chair of the executive board at Achmea, a Dutch financial services firm that is leading the effort, in a statement. Other firms involved include Nomura and Nordea. Collectively, the firms manage about $2 trillion.
The initiative is motivated by the same concerns that prompted calls for the World Health Organization to create a voluntary pool to collect patent rights, regulatory test data, and other information that could be shared for developing drugs, vaccines, and diagnostics. Earlier this week, the European Union drafted a resolution asking the World Health Assembly to adopt the idea.
At issue is growing unease that some Covid-19 medical products may not be accessible for poorer populations across the globe. The U.S. National Institutes of Health, for instance, plans to assemble a public-private partnership to coordinate research. But Public Citizen is urging the NIH to avoid allowing monopolies and commit to non-exclusive licensing for treatments and vaccines in exchange for royalties, and enssure access.
Such notions reflect increased interest in seeing large-scale cooperation and collaboration among governments, universities, nonprofit organizations, and, especially, industry in order to ensure sufficient affordability and access. But the pharmaceutical industry faces heightened scrutiny as the pandemic ratchets up ongoing debates over the balance between patients and profits.
Some companies are already responding. Johnson & Johnson is getting $456 million from the U.S. Biomedical Advanced Research and Development Authority to develop a Covid-19 vaccine and has promised the project will be a not-for-profit endeavor. Meanwhile, Gilead has committed to donating 1.5 million doses of its experimental remdesivir treatment after any regulatory approvals.
Until now, though, such concerns have largely been expressed by lawmakers in various countries, academics, and consumer groups. They have promoted the voluntary pool or in some cases argued for compulsory licensing. A country may grant a license to a public agency or a generic drug maker, allowing it to copy a patented medicine without the consent of the brand-name company that owns the patent.
The effort undertaken by the financial firms, however, signals that the push for wider access is spreading beyond some of the usual advocates. To what extent other financial firms join the push remains to be seen. Socially conscious investing is hardly a new concept, but the novel coronavirus is forcing much of the world to think differently about combating the pandemic.
“Politics makes strange bedfellows and so do pandemics. ”
Ira Loss, Washington Analysis
“Politics makes strange bedfellows and so do pandemics,” said Ira Loss of Washington Analysis, who tracks the pharmaceutical industry. “There is a panic under the surface across the world and the result is some financial people start to think like liberals. This is a case where they can make a request and probably claim victory anyway, because the companies are likely to cooperate as they scurry around for a drug or vaccine. It should be easier to get them to cooperate than on some other issues.”
This is not the first time the pharmaceutical industry has been pressured by financial firms.
For the past few years, the Interfaith Center on Corporate Responsibility, an umbrella group that includes asset managers, unions, and pension funds, has pushed shareholder resolutions calling for responsible prescription drug pricing and greater accountability among companies that manufacture and distribute opioids.
And five years ago, a group of 85 asset managers and pension funds teamed with a U.K. nonprofit campaign to pressure drug makers to disclose clinical trial data. At the time, the investors argued that a lack of transparency about medicines — past and present — sometimes made it difficult to assess drug performance and negatively impacted stock valuations.
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John Chu
Please review what George Merck said and it is my comment of April 17, 2020. Bottom line makes drugs affordable patients will come. Many have to choose between food and life due to pricing.
Be safe and well.
PJH,
Thank you for treating HIV patients for clos to three decades. You made some excellent points bout what NIH can and cannot do. I would like to add a few more:
1.. When was the last time NIH submitted an NDA to the FDA for srig approval? Ever?
2. When was the las time NIH shoed its ability to scale up and manufacture a drug in large quantities? Ever?
3. When was the las time NIH contracted and outsourced drug manufacturing to an Indian or Chinese generic firm for the PI of an approved drug? Ever?
3. Even if and when the NIH was able to do all of the above, how would it set the price for a new drug? By working with the FDA CMS, then negotiating with the PBM’s, and other private insurers and payers? Seriously?
Observer,
No Active cases? Seriously?
Your ignorance about what is the % of HIV positive patients refuses to take HIV tests and still remain undiagnosed, % of those diagnosed and was told actually seeks treatment, and % of those seeking treatment actually continues and complies often with minimal costs curtesy of Gilead and the Ryan White Act appropriation annually, and most impotently, % hose diagnosed and informed would take precautions and not engage is risky sexual acts. Those HIV pstients given plenty of opportunity and subsidy yet refuse to change their behavior should be simply abandoned IMO.
I would like to see Gilead get some praise if their drug actually is shown to work. This not a good time to be slinging mud. If remdesiver gets approved by the FDA, why not just say hurray. It shouldn’t have taken this long. Then follow the actions of Gilead and then throw mud if you don’t approve of their distribution of the drug and motivation for profit. The most important thing now is to have the drug available if it is shown to work well against this weird virus.
Paul James Hastings
Thanks I am not being judgmental but a realist on past practices of Gilead and to some extent of others on the landscape. George Merck’s quote is the best motto and trust me make drugs affordable they will come. You might have seen movie Field of Dreams.
7.4 billion need affordable drugs and will generate more profits than 5 million. Cheers, be well and safe.
Girish Malhotra,
Pardon me for being obtuse, but what does a baseball movie has to do with drug company? If you “build” a good drug, they (patients) will come and you will make good money? Really?
Reminder: Remdesivir was developed at TAXPAYER expense, at NIH and UAB. Yet Gilead has trumpeted it in calls to analysts as its next big Blockbuster – i.e., more than $1 Billion in sales per year. Their lame offer of a million free doses amounts to Pocket Lint for the same company that is also blocking generic competition to Truvada, the AIDS virus treatment ALSO developed at taxpayer expense. They are the lowest of the low. If there were ever a candidate for a corporation to have its charter revoked as a danger to humanity – Gilead’s the one.
Observe,
IMHO the only mistake Gilead made was that O’Day did not just tell Trump that the company would donates millions of free Rremdesivir and let Trump’s team handle the distribution, just like to initial supply of masks and ventilators. If that happened, I am sure the vast mjaotiy would go to NY, and the other top 5 US states with the number of confirmed cases. Heck let the team wth Fauci, Brix, Adams, Redfield, and Hahn decide on the process and priority. Nohthng left for the rest of the world until remdesivir gets approved? I absolutely fine and see nothing wrong with that under the current administration’s America First policy and focus! Heck perhaps Trump can even exploit the situation with quid pro quo, i.e., $ more committed to annual NATO defense budget in lieu of XXX doses of remdesevir via private and confidential negotiation with the likes of UK (Boris), Germany (Merkel), France (Marcon), Spain (Sanchez) , and Italy (Conte). There should be no difherence between military security and health security IMHO. Of course if Xi and Putin also asks for remdesivir, then Trump would have a huge headache…
Observer..the notion that any drug is developed at taxpayer expense is completely wrong…NIH and UAB have no idea how to develop a drug and get it approved..they do research , which is the first phase of a drug’s evolution.
I wont defend Gilead for their practices, but i will commend them fro beinging Remdesavir to patients…if the NIH and UAB are so good at that, why didn’t they do it? I am a huge supporter of NIH, science and the biotech industry…we do not need to be at odds. Gilead, btw, single handedly discovered “drug free holidays” for patients with HIV. I have been working on HIV therapies since the 80’s , and no therapy has come to patients through govt, other than approving the drug. Companies develop drugs. NIH does science.
Here is a quote from Mr. George Merck.
“We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”
——- George W. Merck Time Magazine August 19, 1952
Sometimes we forget the customer.
Capitalism cannot survive without healthy consumers. Public health should not be profit driven.
Great article Ed, but I would like to submit to you that there should also be intense pressure against PBM’s and medical insurance payers with significant drug coverage business (CVS, BC/BS) and also managed care big firms such as Kaiser to disallow them from making any profits from this pandemic treatments products. Shared sacrifice by all without unfairly singling out the drug industry please!
This is great, Ed, that you are reporting this, and we need to put the pressure on our US firms to do same. This is entirely consistent with the independent initiative we ( CEO’s and health care pro’s) enacted with our Commitment to Patients. My investor heros are RA Capital ( Peter Kolchinsky ) and Deerfield ( Alex Karnal)…both are incredibly socially conscious and liberal minded wrt social issues. In my experience many investors are liberal wrt social issues and many i see at Dem events…BRAVO , though, Ed for the reporting.
Paul James Hastings
Wishful thinking we all have. However, Pharma lives by one MANTRA and that is GREED over NEED. To them every pandemic is an opportunity that comes once in life time. Hate to be pessimistic but that is how Pharma thinks and lives.
Be safe and well.
Thank you, Paul, I appreciate the kind words.
We’re trying over here.
And this issue is only going to gain more steam, of course.
Stay safe,
ed at pharmalot
Girish
wrong…unfair to paint the entire industry by the acts of a few bad actors. Focus on examples, like Gilead giving away thousands of free doses of remdesevir or the HUGE drop everything initiative this industry has launched to solve the issues for a failing administration…please be kinder and less judgemental A number of biotech companies have solutions in the pipeline and are accelerating the efforts..lets focus on that. NOW if they price them out of this world, like the morons who are pricing the raw ingredients for hydrochloroquine , ( that’s a chemical company, not a pharma, btw) OK, fair, but lets not cast a stone before the solution is on our doorstep..and lets hold judgment until someone abuses the system and we will all expose that on fact not conjecture. Respectfully Paul
Some commitment. How’d that work out for AIDS prevention? There should be NO active cases any more, but for the fanatic pursuit of profits by Gilead.