Covid vaccine makers face investor pressure on global access

Drugmakers must prioritize global access to Covid-19 vaccines and tie executive compensation to equitable distribution, according to a group of leading international investors.

Nomura, BMO and GAM are among 65 institutional investors who have written to major pharmaceutical companies urging them to “integrate the global availability of vaccines into executive and executive compensation policy.” The signatories represent more than $ 3.5 billion in assets under management.

“It is clear that today a large part of the world’s population still does not have sufficient and equitable access to vaccines,” the investors said in the letter, released Thursday.

“A pandemic that remains unchecked in many parts of the world is and should be high on our agenda as global investors, as well as for governments and the companies in which we invest. “

The letter was sent to the boards of directors of Pfizer, Moderna, AstraZeneca and Johnson & Johnson.

As advanced economies, including the UK, US and Israel, have started administering the third and fourth doses to their populations, as well as immunizing young children, less than 8% of the 1.3 billion people in Africa have been fully immunized.

Financial Times analysis published last month shows that the amount of boosters administered in rich countries exceeds the first two hits given in poorer countries. The World Health Organization has called on businesses and governments to help meet a 70% immunization target in every country after nearly half of its member states fail to hit the 40% milestone. by 2021, mainly due to a severe shortage. An aggressive increase could lead to vaccine supply gaps early this year, the WHO has warned.

Drugmakers should prioritize contract fulfillment for the Covax and African Vaccine Acquisition Trust vaccine access programs “urgently,” the investors wrote, and provide transparency and monthly supply schedules clear to these distribution alliances as well as to low- and middle-income countries.

They added that companies should negotiate areas such as delivery exchanges with countries that already have high coverage, and commit to greater transfer of expertise and technology, including license fees.

“Pharmaceutical companies have a duty to do everything on this, but unfortunately we see that they are lagging behind. In addition, the business case is clear: new variants threaten the recovery of economies around the world, ”said Rogier Krens, chief investment officer of Achmea Investment Management, who coordinated the letter.

Achmea will vote against any executive pay that does not incorporate these goals, he added, although voting policy among other signatories may vary.

Alex Rowe, portfolio manager at Nomura Asset Management, said that “prioritizing access to vaccines over short-term benefits is not only the right thing to do from an ethical standpoint, but the most sustainable long-term approach for these companies ”.

He said this would help reduce the risk of developing new variants and any potential backlash against drugmakers “with respect to their role in limiting the impact on human life.”

The emergence of the highly infectious variant of Omicron in southern Africa in December highlighted the consequences of failure to vaccinate large swathes of the world’s population. Global markets have stumbled and many countries have been forced to put in place new lockdowns in an attempt to halt the spread.

Most of the 65 investors who signed the letter have small stakes in the three largest vaccine makers – Moderna, BioNTech and Pfizer. By far the largest is BMO Global Asset Management’s 0.3% stake in Pfizer, worth $ 1.04 billion, while Achmea’s largest pharmaceutical stake is 0.01% in Johnson & Johnson worth $ 41.1 million, according to S&P Capital IQ.

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