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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 SocialFunds.com.

"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 (ticker: MRK), Pfizer (PFE), 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 Sciences (GILD).

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."

ICCR 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.

Over 2.5 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 suppliers.

"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 African markets."

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.

"What 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.

 

 
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