Investment funds tell drug companies to improve treatment access for poorest countries

Keith Alcorn
Estimated reading time 3 minutes
This article is more than 22 years old.

A coalition of UK and European investment funds with $943 billion under management are calling on pharmaceutical companies to take swift steps to ensure that poor countries have access to essential medicines.

The call has been coordinated by ISIS Asset Management and the Universities Superannuation Fund, who were behind a similar initiative two years ago to place pressure on oil companies doing business in Burma, and a current initiative to address global climate change.

The institutions include Henderson Global Investors, Schroder Investment Management, Legal & General Investment Management, Morley Fund Management, Co-operative Insurance and Jupiter. The statement is also supported by Ethos of Switzerland and PGGM, one of the largest Dutch pension funds.

Glossary

sensitivity

When using a diagnostic test, the probability that a person who does have a medical condition will receive the correct test result (i.e. positive). 

generic

In relation to medicines, a drug manufactured and sold without a brand name, in situations where the original manufacturer’s patent has expired or is not enforced. Generic drugs contain the same active ingredients as branded drugs, and have comparable strength, safety, efficacy and quality.

disclosure

In HIV, refers to the act of telling another person that you have HIV. Many people find this term stigmatising as it suggests information which is normally kept secret. The terms ‘telling’ or ‘sharing’ are more neutral.

malaria

A serious disease caused by a parasite that commonly infects a certain type of mosquito which feeds on humans. People who get malaria are typically very sick with high fevers, shaking chills, and flu-like illness. 

As major pharmaceutical company shareholders, the pension funds are concerned that the value of their investments will decline. If the companies fail to address criticisms over patents and pricing, they will face greater regulation that could ultimately damage profits and also face more comprehensive threats to the current global patent system, in the view of some investors.

"While there were clearly very important humanitarian issues, the statement came from a concern about the impact on shareholder value in the long term," ISIS Senior Analyst Olivia Lankester told the Financial Times.

The financial institutions have produced a statement of good practice which calls on pharmaceutical companies to take the following steps:

  • Establish differential pricing for relevant products that takes into account disease burden rather than just GDP of affected countries (many price reductions currently offered do not cover Latin America, for example).

  • Implement the WHO Guidelines for Drug Donations for donations programmes

  • Enforce patents or facilitate licenses with sensitivity towards local circumstances

  • Disclose the company’s progress in increasing access to appropriate products. This could include disclosure of sales and/or quantities delivered to public and private sectors in emerging market countries.

  • Ensure that public/private partnerships to address HIV and other major public health problems are long-term interventions that do not exclude the most vulnerable or divert resources from other health needs.

Research and development

Companies should also demonstrate commitment to research and development for neglected diseases by:

  • Providing more information in company reports on drugs in development to treat diseases such as HIV, TB and malaria

  • Negotiating forward planning contracts with donor governments on the basis of successfully bringing therapies to treat neglected diseases to market.

The statement also notes that companies which can increase access to medicines will be rewarded if a major public health response to HIV/AIDS is funded by developed world governments.

Lobbying

The statement identifies a number of lobbying opportunities open to the pharmaceutical industry (and by implication, its major shareholders) that might repair some of the damage to reputation suffered in recent years:

  • Using influence with governments to address the public health crisis in emerging markets (e.g. encouraging governmental contributions to the Global Health Fund, supporting interpretations of TRIPs which help the development of emerging markets)

  • Assessing the impact of public lobbying positions on emerging markets and

    disclosing policy positions on emerging market issues (eg Doha agreement)

Simon Wright, ActionAid's HIV/Aids UK campaign manager, welcomed the move, saying: "Large investors are starting to realize that ethical issues count when making commercial decisions. Pharmaceuticals must act systematically to allow price competition with generic manufacturers. They should release their patents in very poor countries, which are being devastated by HIV/Aids and other diseases. If they don't, they deserve to become the new pariahs of the business world."

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