HARRISBURG, PA — Pennsylvania Treasurer Joe Torsella this week co-filed a shareholder proposal at Gilead, maker of remdesivir (brand name: Veklury), the only antiviral drug approved by the Food and Drug Administration to treat cases of COVID-19.
The shareholder proposal, filed by Treasurer Torsella, Rhode Island Treasurer Seth Magaziner, and United Church Funds calls for an independent board chair on the Gilead board of directors. An independent board chair ensures that management of the company is held accountable for missteps and misconduct that harm patients and investors, such as Gilead’s recent unfair pricing of remdesivir, at more than 500 times its production cost according to one study, during a pandemic.
“Gilead had the opportunity to provide this treatment – developed with taxpayer dollars — equitably and fairly, at a time when the country was defenseless against an unknown virus claiming lives, shuttering businesses, and bringing the world to a standstill. Nearly a year since the first coronavirus case and months since remdesivir was approved to treat patients, Gilead continues to force families and our health care system to pay exorbitant prices for a drug that still hasn’t been proven ineffective in reducing fatalities,” stated Joe Torsella, Pennsylvania State Treasurer, Joe Torsella.
“Now, as the United States enters a dark period of resurgence, Gilead needs to be held accountable for its actions. By instituting an independent board chair, shareholders can be assured that the board holds management to account for misconduct and unfair practices that hurt both taxpayers and the company’s reputation. A system of checks and balances on management would strengthen the oversight of decisions that affect families and improve long-term shareholder value.”
As noted in the Institute for Clinical and Economic Review’s (ICER) cost recovery estimates, a Journal of Virus Eradication study calculated that it costs Gilead approximately $1 to produce a vial of remdesivir, yet the pharmaceutical manufacturer has priced the drug at $520 per vial, or $3,120 per treatment course, for patients with private insurance in the U.S., and $390 per vial, or $2,340 per treatment course, for patients with government insurance. According to one report, if Gilead were to price remdesivir at one-eighth of its current price, or $390 per treatment course, the company would still receive between $247 million and $1.4 billion in net profit for sales in the United States.
“It’s unconscionable for a drug company to price-gouge patients in need of medicine that could help them, particularly during a global pandemic. This should not have been allowed to happen. This type of price-gouging is both unethical and unsustainable, and it is time for an independent board chair to be appointed to strengthen oversight of the company,” said Seth Magaziner, Rhode Island General Treasurer.
In a clinical study sponsored by the National Institute of Allergy and Infectious Diseases, remdesivir was found to be effective at modestly shortening length of hospitalization by five days for all patients studied, but did not reduce fatalities. The development of remdesivir was funded by at least $70 million in U.S. taxpayer dollars beginning in 2015, initially as an antiviral drug against Ebola. Remdesivir was not developed in response to the pandemic, but was an existing drug that was repurposed.
“Balancing commitments to society and investors is an essential task of corporate leadership. An independent board chair would better equip Gilead in responding to these commitments,” stated Matthew Illian, Director of Responsible Investing at United Church Funds.
In September, 11 state treasurers, led by PA Treasurer Torsella and Ohio Treasurer Robert Sprague, joined together to call on Gilead to reconsider its pricing, on behalf of taxpayers who funded the development of remdesivir.
The Pennsylvania Treasury is an institutional investor and invests Commonwealth taxpayer dollars in a wide variety of companies, including Gilead. This week’s proposal will be presented at Gilead’s annual shareholder meeting in 2021 for a vote among investors.
The Pennsylvania Treasury, Rhode Island Treasury, and United Church Funds are each members of the Investors for Opioid and Pharmaceutical Accountability coalition (IOPA), a coalition of 61 investors representing more than $4.2 trillion in assets.
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