After the U.S. Supreme Court in June 2022 struck down nearly 50 years of reproductive rights, overturning Roe v. Wade, investors responded with a spate of proposals asking pointed questions about how companies are reacting, in a campaign led by Rhia Venturesentures.org/. Proponents filed only half as many this year (12, down from 25) on reproductive rights, however. Others continue to raise longstanding concerns about patent extensions and high prescription drug prices (six) and tobacco products (four), alongside five about healthy food and one more on patient feedback. There are 28 proposals pending as of mid-February.

Reproductive Rights

Proposals reprise those from the past about risks for employees and digital privacy in the new national landscape of legal restrictions for reproductive choices; they also ask companies to report on abortion access and benefits. A new proposal asks about restrictions on the abortion and miscarriage care drug mifepristone, whose fate hangs on the outcome of a pending U.S. Supreme Court case that will be decided this year. Two have been withdrawn, nine are pending and one has gone to a vote.

(Rhia Ventures also has coordinated filing proposals about inconsistencies between company policies and the political aims of politicians they support, with regard to reproductive health and other issues. See Corporate Political Influence, p. 36).

Proponents have yet to release information on most of the proposals and companies regarding reproductive health. They have made public information about three variations.

Risks: PepsiCo investors face a resubmission that earned 16.1 percent last year, asking it to report within a year,

describing any known and potential risks and costs to the company caused by enacted or proposed state policies severely restricting reproductive rights, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate these risks.

In January, investors gave 7.8 percent support to a new proposal at Walgreens Boots Alliance that asked for a report

detailing any known and any potential risks and costs to the company caused by enacted or proposed state and federal laws regarding mifepristone and other reproductive health medications, and detailing any strategies beyond litigation and legal compliance that the company may deploy to minimize or mitigate these risks.

The resolution noted controversy in the last year about the company’s plans to dispense mifepristone, used in more than half of all U.S. abortions but also for miscarriage care. In January 2023, the FDA loosened earlier access restrictions on the drug, but a Texas case that could re-impose mifepristone restrictions will be decided by the U.S. Supreme court this summer and Republican attorneys general have threatened to sue pharmacies that mail abortion medications, even though the U.S. Justice Department opines that the 150-year-old law the AGs invoked is not applicable. Abortion rights supporters including Democratic attorneys general have threatened their own legal action against Walgreens. The company says it will dispense mifepristone where it is legal and has applied for FDA certification to do so, but it also told the Republican AGs it will not dispense the medication in their states. Investors had to decide if they wanted more information from the company on its position and a report that delineates the risks it faces in more detail. The vote was 7.8 percent.

Benefits: Ross Stores has a resolution from Change Finance that asks for a report to help “limit the impact of the maternal mortality crisis on its workforce” by reporting on “any reproductive and maternal health services and support provided for employees, and assess the feasibility of establishing or expanding such support.” This is the first time the proposal has been filed at Ross, but proponents withdrew four similar proposals in 2023 after reaching agreements.

Medical care limits: As You Sow is using a broader lens to ask Coca-Cola and McDonald’s for a report on “known or potential risks or costs to the Company and its employees caused by the decline in the quality of their accessible medical care and the Company’s strategy to ameliorate these harms.”

Outside the resolved clause, the proposal expresses concern about new laws in more than 20 states that have placed restrictions on gender-affirming care or reproductive health. Both companies operate in these states. The proposal says employees now have limited access to care despite company policies, since workers “rely on the broader healthcare infrastructure available to them,” regardless of “fertility status or gender.” It notes new survey data showing three-quarters of medical students say they will not work or train in states with abortion restrictions—with profound implications for health care in general that raises risks for everyone in these states. The resolution delineates costs that hit the bottom line, too, in terms of “employee mortality, reduced employee contribution, state-specific challenges in recruiting and retaining employees, and higher healthcare costs for employees and for the Company.”

Pharmaceuticals

Patents: ICCR members and their allies have filed dozens of shareholder proposals over the years about the prices pharmaceutical companies charge for their products. In 2024, they have resubmitted a proposal first introduced last year that asks about the drug patenting process, at six companies—AbbVie, Eli Lilly, Gilead Sciences, Johnson & Johnson, Merck and Pfizer. The proposal survived SEC challenges last year; three votes were about 30 percent with the others in the teens. It asks for an evaluation of how companies assess the impact of their policies on patenting, seeking a report

on a process by which the impact of extended patent exclusivities on product access would be considered in deciding whether to apply for secondary and tertiary patents. Secondary and tertiary patents are patents applied for after the main active ingredient/molecule patent(s) and which relate to the product.

The proposal points out that U.S. drug prices are far higher than in other advanced industrial economies and the enduring controversy over them; a new U.S. law gives the federal government the ability to negotiate some prices. The proponents point to particular cases where each of the recipient companies have applied for additional patents to stave off competition and asks “not only whether” a company can apply to do so “but also whether it should do so,” which they say tempts “regulatory blowback” and reputational risks.

BIG PHARMA PATENT EXTENSION ABUSE THREATENS HEALTHCARE AND HUMAN RIGHTS

CATHY ROWAN
Director of Socially Responsible Investments, Trinity Health

For decades, Trinity Health along with other members of the Interfaith Center on Corporate Responsibility’s Health Equity Group have made improving affordability of and access to medicines a focus for corporate engagements with the pharma sector. The United States has some of the highest prescription drug prices in the world. This affects not only patients who can’t afford needed medicines but also threatens healthcare budgets, and limits funding available for other areas in which public investment is needed.

Other Issues

Tobacco: Trinity Health is taking a new approach to tobacco issues this year, asking three gaming companies to ban smoking. It has filed proposals at Bally’s, Boyd Gaming and Caesars Entertainment, asking for a report on “potential cost savings through the adoption of a smokefree policy” for company properties. Boyd and Caesars are arguing at the SEC that the resolution can be omitted on ordinary business grounds because it would micromanage their operations.

One more proposal is a resubmission at Kroger that earned 12.7 percent in 2023. It asks for a report “on the external public health costs created by the sale of tobacco products by our company…and the manner in which such costs affect the vast majority of its shareholders who rely on overall market returns.”

Food: Three proposals ask about sugar and non-sugar substitutes. At Coca-Cola, Achmea Investment Management wants a new “enterprise-wide policy to move toward more healthy products, to be defined in the discretion of the Company and beyond sugar reduction. The policy should include an assessment of the current healthiness of its portfolio, targets with timelines and metrics for measuring implementation and disclosure.” Earlier proposals at Coke raised concerns about the public health implications of its sugary products. A 2022 resolution earned 11.3 percent support, while three years of proposals about sugary products culminated in a 2021 vote of 9.3 percent, not enough for resubmission.

Another resolution raises an issue wholly new to proxy season—the potential risks from non-sugar substitutes. It asks Coca-Cola and PepsiCo to fund a

a third-party assessment by November 1, 2024, at reasonable expense and excluding proprietary information, on the Company’s efforts to assess and mitigate potential health harms associated with the use of non-sugar sweeteners (“NSS”).

The report should cover how the Company evaluates potential health impacts of NSS in its products, including the safety authorities relied upon for NSS guidance, and the Company’s affiliation with and/or financial support of researchers or research institutions, international agencies, or reporting/regulatory bodies studying or making health or safety recommendations about NSS.

SEC action—Coke is arguing at the SEC that the healthy food proposal is too vague and concerns ordinary business because it is about specific types of products.

Patient care: The Illinois Treasurer is following up about concerns voiced last year in a proposal at HCA Healthcare. In 2023, a resolution from NYSCRF seeking board oversight of staffing levels received 18.3 percent. This year, the proposal asks for a report “describing feedback the Company receives from patients regarding quality of care, such as information from the Agency for Healthcare Research and Quality (AHRQ) Survey on Patient Safety Culture, and what actions the Board has taken in response to that feedback.” As the proposal did last year, this year’s iteration expresses concerns about inadequate staffing levels and patient safety.