Pfizer, American Home Products Grilled on Drug Sales

Church groups owning stock in . multinational corporations are beginning to focus on U.S. drug companies that market potentially dangerous drugs in the Third World - products that are banned or severely restricted in the United States.

"These practices can cause unnecessary injury and even death to people living in developing countries," church stockholders stated, in proxy material they submitted for the annual meetings of Pfizer and American Home Products. The, churches, affiliated with the Interfaith Center on Corporate Responsibility, filed shareholder resolutions asking Pfizer and American Home Products to issue a report on their overseas sales practices.

Church groups filed the same shareholder resolution with four other U.S. companies - American Cyanamid, Merck, Searle and Squibb - but when the companies agreed to publish reports on their practices, the church groups withdrew, the resolution.

"There's a whole lot of concern on this issue," says Annie Street, a representative of the Interfaith Center on Corporate Responsibility, which spearheads church shareholder initiatives. Votes in favor of the resolution were "very high," Street notes.

In Pfizer's case, 4.82% of the company's total stockholders sided with the church groups, a percentage not impressive in absolute terms, but unusual when compared to the significantly lower responses most other resolutions receive.

Pfizer opposed the resolution, stating in its proxy response that "all of the pharmaceutical products issued by Pfizer International satisfy rigorous self-applied scientific standards of safety and efficacy." Saying that it was "proud of its policies," management added that "any additional report is unnecessary" because the company already sets out its policies in proxy materials.

The resolution fared better with stockholders of American Home Products. "We got 5.5% of the vote in favor of our resolution, with about 5% abstaining," says Stephen R. Booth, a seminarian with the Maryknoll Fathers and Brothers, owners of 19,000 shares in the company. "We were quite surprised, quite -happy with that vote," Booth says.

In opposing the resolution, American Home Products took a different tack than Pfizer. American Home Products argued in its proxy statement that the "risk of an adverse reaction that might not be acceptable under conditions in the United States may well be entirely acceptable under conditions in a Third World country."

U.S. law prohibits U.S. companies from exporting drugs manufactured in the U.S. for uses other than those approved by the U.S. Food and Drug Administration. However, the law permits U.S. companies to export "misbranded" drugs and "adulterated" drugs on the condition that the products meet the standards of the foreign purchaser and the laws of the foreign country. (The category "misbranded drugs" includes those that have false or misleading labels and those those that do not mention side effects or contraindications. "Adulterated drugs" include those that have been contaminated with unapproved agents or prepared under unsanitary conditions.)

At the annual meeting of American Home Products on April 28, Booth brought up the issue of the company's labelling policy on products sold overseas, citing the company's oral contraceptive, called Ovral, manufactured by Wyeth, a subsidiary of American home products.

Company officials, Booth said at the meeting, "fail to provide (the) information which a woman buying Ovral over-the-counter, would need to make an informed decision as to the risks involved." According to Booth, the company acknowledges a strong link between smoking, the use of oral contraceptives, and the increased risk of heart attacks and strokes when it sells the product in the U.S. and Europe. But in Brazil, Booth said, the company did not inform women of these risks.

Dr. Bernard Canavan, the president of Wyeth International, responded to Booth's claims at the annual meeting. "We are constantly upgrading our product monograph to include the warning statement regarding risks of smoking and pill use," said Canavan, according to a company transcript of the meeting. "In Brazil, we'll soon have the same statement included" that is now being used in the West.

The church filers pledge to raise the issue of hazardous drug exports again at next year's annual meeting. This is "just the beginning," says Booth. "American Home Products is at the very top of the list of any future shareholder actions" Maryknoll is considering.