Drug costs in the United States remain one of the main reasons Americans have the most expensive health care in the world. This year, Mercy Investment Services’ shareholder resolutions at pharmaceutical companies address a major factor in these costs: the pharmaceutical industry’s patent practices – specifically, patent thickets.
Patent thickets are the practice of applying for and amassing patents on a single product. Pharma companies use these thickets of sometimes more than 100 patents to intimidate potential competitors and to sue competitors out of the market. The lack of competition in the market raises prices, with U.S. prices for branded drugs nearly 3.5 times higher than in 32 Organisation for Economic Co-operation and Development (OECD) member countries. This pricing structure is devastating to patients who rely on these medicines and makes many prescriptions unaffordable; nearly one in 3 Americans has opted not to fill a prescription — or to split pills, ration doses, or take an over-the-counter drug instead — to save money.
Mercy Investment Services’ resolution asks nine pharmaceutical companies to explain how their patenting strategies impact patient access and to enhance their disclosures of the relationship between patents and patient access. Mercy Investments withdrew the resolution at Bristol Myers Squibb and Amgen, due to productive dialogue. The resolution received significant shareholder support at Pfizer (30.2%) and Abbvie (29.5%), and moderate support at Gilead Sciences (16.5%), Johnson & Johnson (14.4%), and Eli Lilly (10.4%). Mercy Investment Services will use these shareholder votes to continue to push companies to ensure access and affordability of their products.