Members of the Interfaith Center on Corporate Responsibility (ICCR) want pharmaceutical companies to disclose more on the impact of public funding for COVID-19 vaccines and therapeutic medicine access and pricing.

The shareholder proposals, filed at Eli Lilly, Johnson & Johnson, Merck, and Pfizer, ask for reports detailing “whether and how [the company’s] receipt of public financial support for development and manufacture of preventives and/or therapeutics for COVID-19 is being, or will be, taken into account when making decisions that affect access to such products, such as setting prices.”

Proponents withdrew similar proposals at Gilead Sciences and Regeneron when the two companies, which have developed therapeutic treatments for COVID-19, agreed to increase disclosure.

The proposals aim to increase accountability and prevent price gouging, ensuring companies exercise prudence in setting prices for these life-saving treatments. Transparency is critical to ensuring that investors and stakeholders understand how companies manage public resources, since pharmaceutical Covid-19 related contracts with governments are opaque. Developed and developing countries face different prices.

Congress appropriated almost $10 billion for Operation Warp Speed, an unprecedented public-private partnership to spur the development of Covid-19 vaccines and treatments. Johnson & Johnson received nearly $1.5 billion and Merck $38 million for vaccine research. Merck will also receive $356 million for the manufacture and supply of a Covid-19 therapeutic in development.

Pfizer has $4 billion in Operation Warp Speed advance purchase contracts for the vaccine it developed with the German pharmaceutical BioNTech – which received more than $444 million from its government for the accelerated development of the vaccine. These dollar figures do not account for the basic research for the mRNA vaccine platform used by Pfizer/BioNTech and paid for by the National Institutes of Health, the Defense Department, and federally funded university laboratories.

Eli Lilly also has benefited from public funding for a Covid-19 therapeutic. In March 2020, Lilly entered into an agreement with AbCellera, a Canadian company, to develop antibody products to treat and prevent Covid-19, leveraging a platform whose development was funded by $30 million from the U.S. Defense Advanced Research Projects Agency. The Canadian government gave AbCellera $175 million to discover an antibody and expand its manufacturing capability.

The proponents seek assurance that any medical breakthroughs funded with government contributions will be accessible and affordable so that communities of all income levels will benefit equally. According to an International Chamber of Commerce Research Foundation study, unequal allocation of vaccines could cost the global economy up to $9.2 trillion and “as much as half of which would fall on advanced economies.” The director general of the World Health Organization calls vaccine equity “not just a moral imperative, but a strategic and economic imperative.”

Pharmaceutical companies will face significant reputational and legal risks if they are seen to profiteer from the pandemic. In particular, companies that have used public funding for research, development and purchase commitments will come under heightened scrutiny. These proposals seek to help companies get ahead of these risks and, in the process, increase public trust.