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Investors Cite Pharma Pricing Strategies as Human Rights Risk

Shareholder proposals have been filed at major pharmaceutical companies by investors seeking information on the impacts of pricing policies on patient access to branded medicines. The investors cited a 2021 report by the Rand Corporation, which found that US branded drug prices were almost 3.5 times higher than prices in 32 OECD member countries. They also noted the practice of extending patents to block the introduction of lower-cost versions by generic manufacturers. One example involved 130 patents filed by Abbvie to protect its Humira product, which has enabled it to raise prices 27 times over a 19-year period as exclusive manufacturer. As well as Abbvie, resolutions were filed at Eli Lilly, Gilead, Johnson & Johnson, Merck and Pfizer, asking directors to establish and report on a process by which the impact of extended patent exclusivities on product access “would be considered in deciding whether to apply for secondary and tertiary patents”. Earlier this year, the Interfaith Center on Corporate Responsibility also coordinated the filing of similar proposals in response to the growing use of patent ‘thickets’. Three additional proposals seek to understand whether the business model of pharma companies could pose human rights risks, on the basis that international conventions including the Universal Declaration of Human Rights, the UN Sustainable Development Goals and the UN Guiding Principles on Business and Human Rights assert the right to quality and affordable health care. One proposal asks Pfizer to develop a human rights impact assessment, while proposals at Bristol Myers Squibb and Eli Lilly urging directors to adopt “a comprehensive human rights policy, referencing internationally recognised human rights standards”.

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