Three of the four members of the State Board of Investment approved a measure that directed investment board staff to draft a resolution that could be placed on Pfizer’s proxy statement to be sent to investors before Pfizer’s annual meeting in spring 2005. The resolution demands that Pfizer cease efforts to limit the availability of its products to Canadian wholesalers or pharmacies that sell to non-Canadians, according to the Associated Press. It also asks the company to report what it spends on lobbying, legal fees and consulting fees to protect its pricing structure.
Governor Tim Pawlenty, who chairs the State Board of Investment, described the resolution as a new front in a battle against pharmaceutical companies that charge high prices to Americans and then thwart efforts by states to shop around – and said he planned to encourage other governors to have their pension funds join the fray.
Last month, Minnesota became the first state to operate a Web site that helps residents import medications from Canada (see MN Governor Brings Canadian Drug Buying Plan to the Streets ).
The only member of the Board to oppose the measure was Secretary of State Mary Kiffmeyer, who said she was concerned it might depress the value of the fund – and ultimately payments to retirees, according to the AP.
Late last year, Minnesota Attorney General Mike Hatch launched an investigation into whether GlaxoSmithKline and other drug companies are in an illegal conspiracy as they limit drug sales to Canadian pharmacies. Hatch and State Auditor Pat Anderson decided to support the resolution after Hatch amended it to broaden its language to include large pharmaceutical companies other than Pfizer.
By law, the investment board’s top duty is to maximize returns but Pawlenty said that’s what he intends with the effort. The resolution calls Pfizer’s current pricing structure unsustainable and harmful to U.S. consumers and governmental units.
According to the AP, Hatch said pension funds as shareholders have an obligation to “restore corporate responsibility” and protect the companies from legal liabilities.
Minnesota’s $39 billion State Board of Investment (which manages the investment of retirement fund assets of the Minnesota State Retirement System, Teachers Retirement Association, and the Public Employees Retirement Association) owns about 12.8 million shares of Pfizer stock, worth about $476 million.