Covid-19 cements access to medicine on investors’ agenda

Access to Medicine Index 2021 finds R&D for Covid has increased, but pipelines empty for other pathogens

Covid-19 has demonstrated to investors that “you lose money in all sectors if you don’t prioritise access to healthcare”, according to the Access to Medicine Foundation, which says the issue is rising up the investor agenda as a result. 

Today sees the launch of the Access to Medicine Index 2021, a ranking of the largest 20 pharmaceutical companies on their action to improve access to medicine in 106 countries. GSK, Novartis and Johnson & Johnson hold the top three places. 

The report seeks to help investors deepen their understanding of the risk to companies around access to medicine issues, and inform engagement with firms on issues such as pricing of medicine and research and development. 

Speaking to RI, Mara Lilley, Investment Engagement Manager at the Access to Medicine Foundation, said that this year there was more appreciation from investors that “no-one can assume access to healthcare is a far away issue” and that overlooking the topic can introduce financial risk into all sectors. 

Covid-19 lockdowns have affected many major economies around the world, with the IMF estimating that the global economy shrunk by 4.4% in 2020, describing the decline as the worst since the Great Depression of the 1930s. 

Lilley said Access to Medicine worked with 100s of institutional investors including top asset managers such as Legal and General Investment Management, Aberdeen Standard and AXA IM. 

Peter Hughes, a Fund Manager in AXA’s Biotech & Healthcare team, said it was focusing more on access to medicine. In light of Covid-19, he said AXA IM had been asking portfolio companies and other, relevant companies that it doesn’t hold, about their strategy to ensure the broadest and quickest access to Covid-19 vaccines.  

“A good report from the Bill and Melinda Gates Foundation shows that the distribution model is broadly more beneficial if it goes to the wider world than if it goes to high-income countries first,” he said.

He continued that AXA IM was engaging on product features of Covid-19 vaccines, such as the need for a single dose, or two doses, and storage requirements. 

“They're both aspects that are beneficial for access, because when we think about populations that live in remote areas or areas where there is less infrastructure in terms of power and transportation infrastructure, reducing the amount of time that people have to spend trying to get the vaccine is important to not risk spoiling.”

He added its engagement on access to Covid-19 vaccines had ethical and long-termism dimensions. 

“In terms of financial viability, it’s very important that these vaccines are developed in a sustainable way … and it’s not necessarily from us as investors looking for that financial return. We are looking for a long-term sustainable healthcare system.”

BMO GAM has been engaging on equitable access, one-to-one and through collaboration with investors. In April, Achmea Investment Management started a €2.4trn coalition to drive international cooperation within the pharmaceutical industry on Covid-19. 

Catherine McCabe, Investment Analyst at BMO, said: “We contributed to this initiative by leading engagement with AstraZeneca, which is committed to enabling global access to the Oxford-AstraZeneca vaccine: the company’s agreements with CEPI [the Coalition for Epidemic Preparedness Innovations] Gavi the Vaccine Alliance, and SII [the Serum Institute of India] are major milestones. The key advantage of this vaccine is that it does not require ultra-cold storage, which poses additional logistical challenges.”

“We will only succeed in bringing Covid-19 under control if vaccines and treatments are made widely available, so it is unsurprising that actions deemed as nationalistic and/or exclusive – such as Gilead Sciences’ decision (later retracted) to seek orphan drug designation for remdesivir – have attracted considerable criticism.”

Investor members of the Interfaith Center on Corporate Responsibility (ICCR) last year tabled shareholder resolutions calling on US pharmaceutical companies to offer Covid vaccines at affordable prices  – especially when they have been developed using substantial levels of public funding. They filed proposals at Eli Lilly, J&J, Merck, Pfizer, Gilead and Regeneron ahead of their 2021 AGMs as part of a broader initiative to promote improved access and affordability of Covid-related medicine.