Investors threaten drug maker bonuses over vaccine access

By Jonathan Josephs
Business reporter, BBC News

Published
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Image source, Reuters
Image caption,
Investors want four of the biggest coronavirus vaccine manufacturers to make access fairer

A large coalition of investment firms want the bosses of coronavirus vaccine makers to have their bonuses withheld if they fail to improve product distribution.

This could guarantee a "more equitable" global circulation of the vaccine, said Rogier Krens chief investment officer of Achmea Investment Management.

Drug makers said they are making sure lower income countries have access.

Over nine billion doses have been administered worldwide.

Mr Krens said that the group of 65 companies, which collectively control almost $3.5tn (£2.59tn) in assets, believes that vaccines are "not distributed fairly at the moment".

Overall, China and India have administered the highest number of doses, with nearly three billion and 1.5 billion respectively.

The US is third, with more than 500 million. Many poorer countries are relying on deliveries from Covax, a scheme led by Gavi, the Vaccine Alliance, together with the WHO and the Coalition for Epidemic Preparedness Innovations (CEPI), which is trying to ensure everyone in the world has access to a Covid vaccine. So far the scheme has distributed more than 900 million vaccines.

"What we're asking the companies to do is to tie their remuneration policy and strategy to a more equitable distribution of the vaccine," Mr Krens explained.

If they don't commit to a fairer distribution, he said the groups first step will be to vote against any remuneration proposals that don't take this into consideration.

Asked if that means trying to withhold bonuses if the concerns aren't addressed, Mr Krens, replied "effectively yes".

Image caption,
Executive pay at vaccine makers should be linked to distribution, says Rogier Krens of Achmea Investment Management

Figures collated by Our World in Data - a collaboration between Oxford University and an educational charity, show that many of the countries with the lowest vaccination rates are lower income African nations such as Burundi, DR Congo and Chad. Meanwhile, those at the top of the list are wealthier countries such as the UAE, Portugal and Brunei.

Last week the head of the World Health Organisation reiterated the importance of vaccines in ending the pandemic. Dr Tedros Adhanom Ghebreyesu warned against "narrow nationalism and vaccine hoarding", and added that if "we end inequity, we end the pandemic".

Global vaccine rollout

Scroll table
World
59
11,537,618,404
China
86
3,334,018,000
India
61
1,876,721,584
US
66
572,829,658
Brazil
76
426,987,455
Indonesia
59
398,738,106
Japan
80
269,554,770
Bangladesh
70
256,921,270
Pakistan
54
245,569,444
Vietnam
79
203,144,374
Mexico
61
198,353,262
Germany
75
172,662,731
Russia
50
165,983,904
Iran
68
148,688,755
Turkey
62
147,441,608
Philippines
60
145,008,878
France
78
142,707,489
UK
73
142,014,650
Italy
79
136,613,343
Thailand
73
132,328,077
South Korea
87
121,111,461
Argentina
82
98,193,192
Spain
86
94,295,766
Canada
82
83,635,237
Colombia
69
82,241,178
Egypt
32
80,130,948
Peru
80
71,096,207
Malaysia
81
70,118,091
Saudi Arabia
70
63,823,469
Australia
83
57,111,207
Morocco
63
54,379,321
Poland
59
54,172,710
Myanmar
42
53,750,345
Chile
91
52,241,726
Taiwan
78
52,007,981
Uzbekistan
42
46,569,941
Nepal
66
41,247,086
Sri Lanka
67
39,365,274
Venezuela
50
37,860,994
Cambodia
84
37,654,417
Cuba
88
35,672,949
South Africa
30
34,600,601
Netherlands
72
34,263,043
Ecuador
77
34,006,476
Nigeria
6
33,932,163
Ukraine
35
31,668,577
Ethiopia
18
29,411,822
Mozambique
41
27,843,440
Belgium
79
25,305,076
United Arab Emirates
97
24,656,750
Portugal
93
22,923,599
Sweden
75
21,631,651
Kazakhstan
49
20,918,681
Greece
73
20,794,924
Rwanda
61
20,141,669
Uganda
21
19,399,787
Angola
18
18,756,893
Austria
73
18,242,918
Israel
66
18,126,816
Iraq
18
17,943,392
Kenya
15
17,734,375
Czech Republic
64
17,560,226
Romania
42
16,769,502
Guatemala
33
16,708,547
Hungary
64
16,498,370
Hong Kong
80
15,695,922
Switzerland
69
15,664,046
Dominican Republic
54
15,583,331
Ghana
16
14,228,848
Singapore
91
13,932,269
Algeria
14
13,704,895
Azerbaijan
47
13,627,588
Denmark
83
13,216,001
Bolivia
49
13,201,270
Tunisia
53
13,073,517
Honduras
48
12,118,425
Ivory Coast
20
11,872,480
Belarus
58
11,778,178
Finland
78
11,731,694
Tajikistan
50
11,532,475
Norway
74
11,290,711
New Zealand
80
11,029,448
Ireland
81
10,837,561
El Salvador
66
10,620,638
Laos
65
10,561,960
Costa Rica
79
10,508,830
Zimbabwe
24
10,213,714
Nicaragua
66
10,003,541
Jordan
44
9,874,355
Paraguay
48
8,621,956
Serbia
48
8,494,958
Uruguay
82
8,153,459
Panama
70
8,012,183
Kuwait
76
7,939,118
Turkmenistan
48
7,140,000
Slovakia
51
7,063,998
Sudan
8
7,037,185
Oman
58
7,030,077
Qatar
89
6,740,482
Guinea
18
5,952,680
Afghanistan
12
5,948,889
Mongolia
65
5,485,869
Lebanon
33
5,310,268
Croatia
55
5,240,310
Tanzania
5
5,031,070
Lithuania
70
4,476,811
Bulgaria
30
4,376,702
Palestinian Territories
34
3,716,803
Zambia
13
3,714,453
Syria
8
3,609,370
Libya
16
3,451,352
Bahrain
70
3,430,347
Benin
20
3,112,919
Kyrgyzstan
19
3,001,180
Slovenia
59
2,987,564
Latvia
70
2,882,780
Georgia
32
2,876,960
Sierra Leone
14
2,868,978
Albania
43
2,801,345
Togo
18
2,757,575
Niger
6
2,689,995
Mauritius
76
2,567,436
Botswana
54
2,517,260
Somalia
8
2,511,394
Senegal
6
2,496,373
Burkina Faso
6
2,440,917
Chad
12
2,291,152
Madagascar
4
2,236,368
Liberia
21
2,201,300
Moldova
26
2,143,365
Armenia
33
2,141,957
Mauritania
22
2,118,211
Malawi
4
1,993,981
Estonia
64
1,980,917
Mali
5
1,941,434
Bosnia and Herzegovina
26
1,924,950
Bhutan
85
1,888,156
North Macedonia
40
1,845,493
Kosovo
46
1,825,488
Central African Republic
18
1,821,498
Cameroon
4
1,820,196
Cyprus
72
1,777,994
Trinidad and Tobago
51
1,551,330
Congo
12
1,496,858
Fiji
70
1,438,393
Timor-Leste
45
1,417,237
Jamaica
23
1,412,239
Macau
84
1,332,518
Luxembourg
73
1,285,351
Malta
91
1,271,501
Brunei
92
1,084,543
Maldives
71
941,070
Lesotho
34
905,438
Guyana
46
898,907
DR Congo
0.5583
881,240
Namibia
15
839,674
Yemen
1
814,569
Iceland
79
805,469
Cape Verde
55
728,077
Montenegro
45
671,242
Gabon
11
650,502
South Sudan
5
645,347
Comoros
34
637,961
Papua New Guinea
3
586,000
Guinea-Bissau
17
562,620
Eswatini
27
509,424
Suriname
40
505,189
Equatorial Guinea
15
476,752
Belize
52
471,581
Solomon Islands
20
425,059
Samoa
74
395,440
Gambia
13
363,353
Bahamas
40
339,546
Barbados
53
313,487
Vanuatu
38
301,000
Haiti
1
267,133
Jersey
79
231,170
Sao Tome and Principe
39
208,657
Seychelles
81
199,850
Isle of Man
78
189,681
Tonga
67
181,220
Djibouti
11
174,640
Andorra
69
152,301
Guernsey
81
150,724
Cayman Islands
88
142,198
Kiribati
46
136,758
Bermuda
76
131,441
Antigua and Barbuda
62
125,605
Gibraltar
123
119,855
Saint Lucia
29
119,444
Faroe Islands
83
103,894
Grenada
34
87,699
Greenland
68
79,745
Liechtenstein
69
70,512
St Vincent and the Grenadines
27
70,032
San Marino
69
69,164
Turks and Caicos Islands
75
68,800
Dominica
42
66,357
Monaco
65
65,140
Saint Kitts and Nevis
49
60,467
British Virgin Islands
58
40,697
Cook Islands
84
39,596
Anguilla
65
23,126
Nauru
79
22,976
Tuvalu
52
12,528
Burundi
0.0859
11,083
Saint Helena
58
7,892
Falkland Islands
50
4,407
Montserrat
37
4,229
Niue
88
4,161
Tokelau
71
1,936
Pitcairn
100
94
British Indian Ocean Territory
0
0
Eritrea
0
0
North Korea
0
0
South Georgia and the South Sandwich Islands
0
0
Vatican
0
0

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Global economy threat

A fairer distribution of vaccines makes sense from both a humanitarian and financial perspective, according to Mr Krens.

"We definitely feel it's our responsibility to invest in companies that act in a socially responsible way," he said.

When it comes to the money that the group manages for pension funds and other clients Mr Krens explained that a continuation of the pandemic as it's going now, would be a "threat" to the economy and eventually, a threat to their investment returns.

The massive gap in vaccination rates between advanced economies and poorer nations could cost the global economy $5.3tn over five years according to the International Monetary Fund.

Image source, Reuters
Image caption,
Many people are keen to get coronavirus vaccines, such as these who are queuing up in Malta

The group of investors have voiced their concerns in a letter to the boards of Pfizer, Moderna, AstraZeneca and Johnson & Johnson.

In their statement, they highlight the World Health Organisation's roadmap which calls for 70% of the population of every country to be vaccinated by the middle of this year.

Media caption,
What went wrong with vaccinating the world? Three experts explain

Manufacturers under pressure

The roadmap calls on vaccine manufacturers to be more transparent about production schedules and to prioritise contracts with Covax and Avat which aim to improve the distribution of vaccines in poorer countries.

Vaccines makers said they are doing what they can to ensure that doses are spread out fairly.

AstraZeneca, which has worked with Oxford University on its vaccine, said it is "producing its COVID-19 vaccine for no profit to low income countries and has distributed most of its supply to low and middle income countries."

Johnson & Johnson said that approximately 60% its COVID-19 vaccines have been shipped to low and middle income countries and that fair access to them has been "at the forefront" of its response to the pandemic. It added that its executive pay strategy "is designed to promote long-term, sustainable value creation".

Moderna and Pfizer haven't responded to requests for comment. However last year, in an open letter Pfizer's chief executive Albert Bourla wrote that the biggest restriction on expanding manufacturing was "scarcity of highly specialised raw materials".

Image source, AFP
Image caption,
Companies including Pfizer have spent billions developing coronavirus vaccines

Sharing vaccine knowledge

International political efforts to improve vaccine production and distribution through a wavier of intellectual property rights have stalled. Hopes for an agreement at the World Trade Organisation were dented when it's in person Ministerial Conference was abruptly cancelled in late November.

Achmea's Rogier Krens believes that such a sharing of the vaccine manufacturing know-how has an important role to play in improving vaccine distribution.

Although they have largely resisted so far he said: "We're actually calling actively for the pharmaceutical companies to contribute in that area".

He argued that increasing vaccine supply is crucial to getting more people protected from coronavirus.

Mr Krens said that the coalition of investors can bring about change from the drug makers, even if it doesn't happen overnight, because it's size equates to "quite a strong voice".