Investors Voice Support For Allergan Pledge To Cap Branded Drug Prices
Shareholders continue call for industry-wide disclosures of pricing structures to prevent “predatory pricing” seen to present risks to both business and public health.
NEW YORK, NY, MONDAY, SEPTEMBER 12, 2016 – The Interfaith Center on Corporate Responsibility (ICCR), a coalition of investors who have been calling for greater transparency on drug pricing structures, commends Allergan’s CEO and board of directors for the company’s recent pledge to cap its branded price increases to no more than single digit annual increases or slightly above the annual rate of inflation.
Members of ICCR and shareholders of the world’s largest pharmaceutical companies have been pressing the industry for greater disclosures on pricing structures for decades as a way to promote greater access to medicines. ICCR members believe a lack of transparency around how drug prices are fixed has led to an industry-wide ethos of “whatever the market will bear” which has led to a number of recent drug-pricing scandals. Allergan’s announcement is public acknowledgement from within the industry that the current pricing system is deeply flawed and unsustainable.
ICCR agrees with Allergan CEO Brent Saunders that aggressive or predatory price increases have violated the social contract between drug companies and patients and sees the pledge as a solid first step in restoring that contract and a concrete strategy to enhance patient access. Further, as long-term shareholders, ICCR members cite Allergan’s leadership in adopting this pledge proactively, as they believe it will help mitigate impending regulatory and legal risks that may threaten the business and consequently, their investments.
The Allergan pledge calls for a review of any annual price increase that would exceed 10% as a stop-gap measure to guard against “predatory pricing” and to ensure that medicines remain affordable for patients who need them. ICCR members said they had spoken with company representatives about the CEO’s pledge, and will be monitoring implementation of the commitment to ensure compliance.
ICCR’s expectation is that other drug makers will follow Allergan’s lead and adopt similar pledges that will restore investor confidence in the industry as well as enable patients, providers and payers to benefit from a more equitable and transparent approach to drug pricing.
As the 2017 proxy season begins, ICCR members will continue to pressure pharmaceutical companies for greater drug price transparency and for board oversight over excessive drug pricing that poses business risks and threatens patient access.
About the Interfaith Center on Corporate Responsibility (ICCR)
Celebrating its 45th year, ICCR is the pioneer coalition of shareholder advocates who view the management of their investments as a catalyst for social change. Its 300 member organizations comprise faith communities, socially responsible asset managers, unions, pensions, NGOs and other socially responsible investors with combined assets of over $200 billion. ICCR members engage hundreds of corporations annually in an effort to foster greater corporate accountability on questions such as climate change, corporate water stewardship, sustainable food production, human trafficking and slavery in global supply chains and increased access to financial and health care services for communities in need. www.iccr.org