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.