standards help investors rate drug firmsSeptember 2002
An ‘industry standard’ for assessing the corporate social responsibility of drugs firms has been drawn up by three global non-governmental organizations.
Oxfam, Save the Children and Voluntary Service Overseas have developed the benchmarks to help investors gauge the degree of social responsibility practised by pharmaceutical companies in developing countries.
The benchmarks relate to company policies and practices in five areas: pricing, patents, public-private initiatives, research and development, and the ‘appropriate’ use of medicines.
On pricing, the NGOs propose that investors consider whether company policies ‘support substantially lower prices of medicines in developing countries’, whether firms publish a list of pricing offers made to such countries, and whether price reductions cover a range of products rather than a small number of ‘flagship’ drugs.
They also suggest that companies should be marked down for enforcing patents in developing countries ‘where this will exacerbate health problems’, but that companies should receive positive marks if they support public-private partnerships designed to increase drug availability ‘as part of an overarching CSR policy that addresses all issues surrounding access to medicines’.
Investors and pharmaceutical companies recently met to discuss the benchmarks at the offices of Morley Fund Management, the investment arm of UK-based Aviva (formerly CGNU). ‘They’re a helpful contribution to a complex area of CSR and should encourage better performance from these companies,’ said Morley analyst Joanna Johnston.
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