Last week, the drug company giant Pfizer faced a challenge from its shareholders to the company’s method of wielding secret influence over public policy. Shareholders filed a resolution that went up for a vote at the company’s annual meeting on Thursday calling for a full report on all of Pfizer’s lobbying activity, including payments to trade associations that lobby on the company’s behalf. Preliminary reports indicate that the proposal received 33.3 percent support from shareholders, which is up from 30.7 percent in 2016 when this same proposal was last on the ballot. This is a strong showing of support given that the major mutual fund companies who control a significant number of voting shares typically don’t support these proposals.
As the opioid crisis in America has been building over the last two decades, the pharmaceutical industry has been profiting off of the epidemic and spending millions of dollars to maintain its power. Fed up with companies like Pfizer acting without accountability, shareholders are calling for the company to be fully honest about how it engages in politics.
Taking the fight straight to the company is an approach that has been gaining attention under the Trump administration, as consumers express their dissatisfaction with corporate greed through boycotts and social media campaigns. This builds on efforts by shareholders at major companies who have been calling for increased transparency and disclosure from public companies for years.
The lobbying disclosure proposal is part of an ongoing investor campaign for greater corporate political spending disclosure. In 2018, investors filed proposals at 50 companies asking for lobbying reports that include federal and state lobbying payments, payments to trade associations used for lobbying, and payments to any tax-exempt organization that writes and endorses model legislation, such as the American Legislative Exchange Council (ALEC).
Shareholders are seeking a full picture of Pfizer’s lobbying activity because it’s impossible to know the full extent of the company’s influence without complete disclosure. However, what we do know about the company’s engagement in politics is staggering. Pfizer regularly ranks as a top lobbying spender among drug makers in Washington. In 2016, Pfizer had as many as 284 lobbyists registered to lobby in 48 states. According to a recent study that measured state lobbying by intensity (normalized by calculating expenditures per $1 million of revenue), Pfizer came in as the second highest spender.
The lack of disclosure around Pfizer’s state lobbying is particularly troubling given its ability to influence drug pricing ballot measures, such as those in California and Ohio. In 2016, Pfizer spent more than $9 million to defeat a drug pricing ballot measure in California that would have made drugs more affordable and accessible in the state. In Ohio, industry crushed an almost identical ballot measure, and hid the donations by funneling them through a limited liability corporation (LLC). If Pfizer disclosed all of its lobbying activity directly to shareholders they would have been able to see whether the company spent the same or more to defeat the ballot measure in Ohio.
Pfizer’s shareholders are also seeking disclosure of the payments that the company makes to trade associations like Pharmaceutical Research and Manufacturers of America (PhRMA), the U.S. Chamber of Commerce, and other tax-exempt organizations, such as ALEC. Despite claiming to be non-partisan, both ALEC and the Chamber work to advance a corporate-friendly agenda designed to appeal to members of the Republican Party who receive far more campaign contributions from industry than Democrats.
Of Pfizer’s non-disclosing trade associations, the Healthcare Distribution Alliance (HDA) has been featured in press reports for its role in helping to pass legislation that weakened the Drug Enforcement Agency’s ability to stop suspicious drug shipments by distributors, thereby exacerbating the opioid crisis. While Pfizer does not disclose its membership in HDA directly, we know they are engaged from a quick search of HDA’s website that reveals Pfizer as “manufacturer” member.
Pfizer’s shareholders and the public deserve to have a full picture of the company’s attempts to maintain the damaging status quo and the opportunity to assess what risks that poses to both the corporation’s value and public health. Americans deserve to fully understand what policy is secretly being written by the drug industry.
If Pfizer didn’t want to keep its role in the opioid epidemic and the money it has spent to maintain the status quo secret, then it would disclose its payments to shareholders. Given what’s we already understand about Pfizer’s significant influence over policy decisions and its role in the national opioid epidemic, it’s time for Pfizer to fully disclose to give us the rest of the picture.
Learn more from experts at coalition partner, Public Citizen