Shareholder Group Urges Big Pharma to Report Link Between Pricing and Pay
Pharmaceutical company executives are among the highest paid individuals in the world, and pharmaceutical companies have been in the news frequently over the past few years for spikes in prescription drug prices. There are many that believe that drug prices are far too high, including some shareholders of these same companies.
The Interfaith Center on Corporate Responsibility (ICCR), a coalition of shareholders and institutional investors that together have over $400 billion in assets, has reached out to Big Pharma and others to establish positive working relationships and keep a dialogue open for ideas on how best to run these large conglomerates while also ensuring their products are obtainable at reasonable cost. The ICCR recently called on the Big Pharma companies to report whether there is a link between their drug-pricing strategies and executive compensation plans. And in a statement released on December 13, 2017, the ICCR said that they have submitted proposals that their coalition be included in the 2018 annual meetings of Abbvie Inc., Amgen Inc., Biogen Inc., Bristol Myers Squibb Co., and Eli Lilly & Co. Each of these companies pay annual bonuses to their chief executive officers that are at least partially tied to revenue and earnings of the previous fiscal year.
With the average awarded pay of Big Pharma CEOs sitting at $19.2 million, and with accessibility and affordability of medicine posing a big problem for many Americans, the ICCR is taking up an admirable cause in what they see as both holding companies accountable to their shareholders while also working in a consumer protection capacity.
Of course, the ICCR is not the only group voicing concern over the price of prescription drugs, and many politicians have spoken out on the issue in recent years as it has become a ballot box issue. In early December, Rep. Michael C. Burgess (R-TX), the chairman of the House Committee on Energy and Commerce’s health subcommittee, called for the pharmaceutical industry to do more to address soaring prescription drug costs. Rep. Burgess stated that public concern on the issue has reached a tipping point, a feeling shared by many across the political isle and from all walks of life.
The rise of prescription drug costs is an issue that affects us all. As such, groups like the ICCR play an important role in bringing attention to how pharmaceutical companies are operating, and in working to gain better transparency from these companies.