Health Care Costs Affected by Corporate Conflicts of Interest

Source: Alliance for Retired Americans, Friday Alert, October 19, 2007

A recent report by the AFL-CIO Office of Investment reveals directors at major corporations often have serious conflicts of interest, influencing the cost of health care. While companies would be expected to cut benefit costs through policies such as including generic drugs as part of prescription coverage, executives at big health insurance and pharmaceutical companies who are also board members at some of the country’s largest non-health care related companies may affect plans. Many have much greater financial stakes in the health firms, suggesting outside motives that may influence benefits policies of these other businesses. The report shows that 21 Fortune 500 companies with substantial health costs for retirees, employees and dependents have significant conflicts of interest, with leaders also executives or directors at a major health or pharmaceutical company. In one case, the prescription drug Nexium was actively protected and maintained as part of a health plan by General Motors, while other corporations substituted less expensive generics. Percy Barnevik, retired CEO of AstraZeneca, was a board member and chair of GM’s Policy Committee at the time.

See also:
Press release
Letter to the SEC

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