December 01, 2004
ICCR Spends World AIDS Day Preparing Shareowner Resolutions for Upcoming Proxy Season
by William Baue
This year's resolution has expanded to cover operations in India and China as well as Africa, and
ICCR is campaigning for pharma companies to provide better access to medicines for children.
While many AIDS activists will spend today, World AIDS Day, working directly supporting
those infected with HIV, others are addressing systemic structures that impact the trajectory of
AIDS. The Interfaith Center on Corporate Responsibility (ICCR), for example, is preparing for the 2005 proxy season by
re-filing a shareowner resolution that asks the four major pharmaceutical companies to report on
the effects of the AIDS pandemic on their businesses. The resolution also asks the companies to
disclose what measures they are taking to mitigate the risks of the HIV/AIDS as well as the
tuberculosis and malaria pandemics.
Since filing the resolutions for the first time
last year, ICCR has broadened the focus from Africa to include India and China, according to Dan
Rosan, ICCR's program director for public health.
"We're trying to make the case to
investors that this is more than an Africa problem, and I think it's a strong case," Mr. Rosan told
"ICCR members see the ravages of HIV and AIDS in their daily work in
Africa, India, and China," said Sister Vicki Bergkamp of the Sisters Adorers of the Blood of Christ and chair of the HIV/AIDS
Caucus at ICCR. "Our experience on the ground in these regions has convinced us that leading
pharmaceutical companies can--and must--do more to make their life-saving products accessible to
the people who desperately need them."
At all four major pharmaceutical companies, Merck
Bristol-Myers Squibb (BMY), and Abbott Laboratories (ABT), the
resolution last year easily surpassed the 3 percent threshold required by the US Securities and
Exchange Commission (SEC) for re-filing. This
year, the resolution will also be filed for the first time at the biotechnology company Gilead
Another shift in this year's campaign came as a result of a fact-finding trip Mr. Rosan
took earlier this year to research the impact of AIDS on the private sector throughout Africa,
where he witnessed the unique impact HIV has on women and children.
"The United Nations
has called for this World AIDS Day to be focused on women and children, and we're extending this
focus throughout the year," said Mr. Rosan, who saw firsthand some of the problems particular to
children. "Many branded companies sell children's formulations of their adult AIDS medicines, but
they don't cooperate with each other, in the same way they don't cooperate on adult medicines, so
there's no fixed dose combinations, or multiple medicines in a single dose."
seconds the call coming from relief agencies such as Doctors Without Borders asking companies to
collaborate in formulating fixed dose combinations, according to Mr. Rosan.
million children worldwide are living with HIV, according to ICCR, a fact underlining the
importance of addressing childhood HIV/AIDS.
"Half of all children born with HIV die
before they are two years old," said James Gunning of the Unitarian Universalist Service Committee, primary filer of the HIV
resolution at Merck. "One big reason is the high cost of pediatric AIDS medicines, which top
$1300 per child per year."
"Compare that to generic adult first-line treatment, which is
about $200 per patient per year," he continued. "How can we treat parents and not their children?"
While these particular issues will be the focal point of the upcoming proxy season, some
headway has been made since this past proxy season.
"Merck has taken a couple of steps to
voluntarily license Efavirenz, which is what we've been asking for, so that's positive," Mr. Rosan
said. "But Merck has come under criticism from some nongovernmental organizations in South Africa
for some supply chain problems affecting some district hospitals and preventing some children from
receiving their doses for a few days."
These NGOs are calling on Merck to license to other
suppliers so there are multiple sources for the drugs. They want at least two but preferably four
"If you have multiple suppliers for a drug, the price will be cheaper and
you're less likely to run into these kinds of shortages," said Mr. Rosan, who pointed out that
GlaxoSmithKline [GSK] has licensed their products to
four suppliers. "And Merck needs to do it in more than South Africa--they need to do it in other
As with last year's campaign, ICCR is coupling the AIDS resolution with
a resolution asking pharmaceutical companies to disclose their political contributions.
"Our concern is over the pharmaceutical industry's undue influence over US trade policy, which
is used to reduce access to medicines by creating much stronger patent rights than were agreed to
under the World Trade Organization," Mr. Rosan explained. "We're trying to get drug companies to
be transparent about their political contributions, so we can hold the companies and the policy
makers accountable for their financial relationships."
ICCR is also bundling a new
resolution asking the pharmaceuticals to split their CEO and board chair positions.
we're trying to do is catalyze new leadership in the pharmaceutical industry, because not matter
what issues you look at, the common theme is that the leadership of the pharmaceutical industry has
been tentative and has not been seeking solutions," said Mr. Rosan. "Splitting the CEO and chair
roles will not guarantee better results, but we're not going to see any movement with the system
we've got now--we need to change the governance structure.