PFZW, the €165bn pension fund for Dutch healthcare workers, has intensified the way it engages with large pharmaceutical companies to persuade them to make their drugs more affordable.
Pharmaceutical companies, it argued, have a social responsibility to price their products reasonably.
Peter Borgdorff, PFZW’s director, said companies that ignored its recommendations could expect the pension fund to divest its holdings.
The healthcare scheme has invested €2.5bn in pharmaceuticals.
The pension fund said it wanted to encourage drugs companies to change their business models and focus on transparency.
“Criticism in society about the high prices of medicines – and particularly the fog surrounding them – is increasing,” Borgdorff said.
Rogier Snijdewind, senior adviser for responsible investment at PGGM, added: “We urge drugs manufacturers to map out the risks of their pricing policy.
“We are convinced the reputation of companies will be damaged if they ultimately are forced by governments to adjust their prices.
“They could prevent this by taking their role as a ‘corporate citizen’ seriously.”
Borgdorff pointed out that Swiss pharmaceutical company Novartis had recently set up a scheme in poor countries – partly at PFZW’s urging – to provide 15 drugs, treating cardiovascular disease, diabetes, breast cancer and respiratory illness, for $1 per treatment per month.
“Because Novartis also supports extending the healthcare system,” he added, “it could lead to an increased market for the company at the end of the day.
“This way, pension returns and social returns can go hand in hand.”
Healthcare access – along with food security, a liveable climate and clean drinking water – is one of the key objectives of PFZW’s “investing in solutions” policy.
Over the next five years, the pension fund aims to quadruple its stake in this category to €20bn.
A spokesman said APG would let developed-world governments, healthcare organisations and care insurers take the initiative, adding that the asset manager had no desire to prescribe companies’ pricing policies.
It added that its engagement process also covered clinical trials, “as these could violate human rights, following a lack of regulation or supervision”.