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INTERVIEW Cesare Vitali Head of ESG analysis at Ecofi Pharmaceutical companies and access to medicines: what role for investors? Access to medicines: Pharmaceutical companies markets, thanks to long-term why should of the private sector, through business relations and strong investors care? their activities, play a key role corporate responsibility actions. in order to solve this disparity Because of that, responsible The Covid 19 pandemic has between developed and low- investors should conduct a demonstrated once more that income countries. Pharmaceutical dialogue with the pharmaceutical the world needs pharmaceutical companies which do not integrate companies invested in their companies in order to develop sufficient access to medicines portfolios, in order to encourage universally accessible solutions for issues in their business model, the development of rugged access taking care of human diseases. in their strategy, in their risk strategies. Access to medicines and to health management system or in their The majority of pharmaceutical for everyone, in particular in governance could face several companies declare themselves as developing and poor countries, kinds of non-financial risks, compliant with UN SDG number 3, is a strategic issue, not just for such as: about access to health (“ensure humanitarian and moral reasons, • Reputational risk: the healthy lives and promote well- concerning the argument that no pharmaceutical industry being for all at all ages”): but do one should left behind, but also for is extremely criticized by they really demonstrate action economic ones. Increasing access external stakeholders. to integrate access to medicines to medicine in emerging and Pharma companies are more issues in their business model, poor countries contributes to the and more under pressure in their strategy, in their risk creation of a richer, healthier and from media, consumers, NGOs management system or in more productive global society. and governments about their their governance? How could A 2020 study commissioned by the license and pricing practices. responsible investors analyze Bill & Melinda Gates Foundation This pressure could be headed companies’ access strategies? has demonstrated that leaving also by responsible investors, lower-income countries without through their engagement access to vaccines against actions, which would increase ‘‘ACCORDING TO THE WORLD COVID-19 pandemic will cause companies’ efforts and their HEALTH ORGANIZATION DATA, significant economic damage for performance about access to NEARLY 2 BILLION PEOPLE both emerging and advanced medicines. HAVE NO ACCESS TO BASIC economies. The report has The long-term sustainability MEDICINES. estimated that the economic of pharmaceutical companies ’’ benefits of a global equitable is strongly linked to their The 2021 ATM Index, vaccine solution for the 10 capacity to build durable the key findings countries covered by the analysis relations over time with In 2021 the Access to Medicine (Canada, France, Germany, Japan, their stakeholders (e.g. Foundation, an independent non- Qatar, South Korea, Sweden, collaboration with patients profit organization, funded by United Arab Emirates, UK, USA) associations, management of the Dutch and UK governments, would be at least US$ 153 billion in NGOs allegations or boycott, the Bill & Melinda Gates 2020-21, rising to US$ 466 billion capacity to attract top talent Foundation, the Wellcome Trust by 2025. employees, etc.). and AXA Investment Managers, According to the World Health • Legal risk: pharma industry published its 7th “Access to Organization data, nearly 2 billion is highly regulated and the medicine Index”. The Index, people have no access to basic risk of unethical conduct which is released every two years, medicines; the majority of this could be really complex when analyzes policies and actions vulnerable population live in low- managed. Companies need of the 20 main pharmaceutical and middle-income countries. robust compliance systems companies in the world about This lack of access to medicines, in order to avoid unethical access to medicines, vaccines especially in emerging economies, practices, such as corruption and diagnostics, in particular represents a strong market and anti-competitive in 106 low- and middle-income distortion, which limits economic measures, which may lead to countries, for 82 different diseases, growth and creates inequalities legal lawsuit and severe fines. conditions and pathogens. The between countries, preventable • Commercial risk: ATM Index gives a detailed picture misery and unnecessary human pharmaceuticals companies of pharma industry, especially suffering. Our society should which have strong policies about how companies support care that medicines be available about access to medicine the development of access to life- especially to the poorest countries, could benefit from important saving medicines, vaccines and where healthcare budgets are potential opportunities for diagnostics for people in low- and often constrained. revenue growth in emerging middle-income countries. INTERVIEW ECOFI The Index assesses companies on demonstrates developing coordinated by ATM: for their actions to improve equitable systematically an access plan instance, in 2021 we joined access to products on the market for all its R&D projects, when three collective dialogues and to make new products the phase II clinical trial results organized by ATM members available. are positive. GSK is the pharma with three pharmaceutical company with the most candidate companies invested by our funds The Index applies 33 metrics about products formally covered by (Sanofi, Merck, GSK). During several aspects linked to access access plans (80% of projects the engagement proceedings, to medicines, such as pricing, assessed), followed by Novartis, we asked several questions to distribution, market influence, Johnson & Johnson, Pfizer, Sanofi companies about their strategy on patents, licensing and product and Takeda. access to medicines issue. donations. All the metrics are summarized in the three following Even if the analysis shows that Through the ATM network, areas of analysis: pharma companies are more Ecofi can join engagement aware about the importance of initiatives also with institutions • Governance of access this issue, access to medicines and governments: for example, • Research & development could be still more integrated in February 2021 Ecofi joined • Product delivery in companies’ business model. the initiative “Urgent call for fair The application of the ATM In particular, the Index finds and equitable global response to methodology gives a score for out that just a small number of COVID-19”. This investor statement, each company, which is reviewed people per country are gaining which has been signed by 154 by an expert panel including access through these initiatives, institutional investors representing researchers, academics, World which largely comprise equitable assets worth more than US$ Health Organization officials pricing strategies. Companies are 14 trillion, calls world leaders and specialists from the addressing access for the poor for of G7 and G20 governments to pharmaceutical industry. These less than half of products analyzed implement concrete measures in criteria are applied to 20 leading by the Index. In particular, just order to ensure fair and equitable pharma companies, which 13% of the products administered access to vaccines and medicines, represent about 70% of global by a healthcare practitioner, in particular in developing pharmaceutical revenues. such as injectable treatments countries. Through this statement, for cancer, are offered through investors underscore the deep The Index is viewed by investors’ access strategies in low-income unfair difference between the international community as one countries. This rises to 26% of self- level of population vaccinated of the most credible sources administered products, which are in developed countries and in of information for assessing mainly pills. developing ones. The statement pharmaceutical companies: the encourages institutions to Index is endorsed by more than cooperate for establishing a more 100 institutional investors, such as How investors can use ATM data coordinated approach in terms of Ecofi, which collectively manage vaccines distribution worldwide. Ecofi is member of Access to assets worth over US$ 18 trillion. Lastly, the statement calls on Medicine Foundation network The key findings of the 2021 governments to explore the since 2010. Ecofi, in order to edition show that pharma feasibility of innovative finance maximize the impact of its companies generally have mechanisms for global responses portfolio investments, engages increased their efforts in order to COVID 19, also through the directly and collaboratively with to make new medicines rapidly collaboration of pharmaceutical invested companies about several accessible to the poor countries. companies in the private sector. All 20 companies have set specific ESG issues, such as access to medicine. The ATM membership is quantitative targets for improving access, and more companies are an important tool for helping us to deploying business models that understand the issue of access to formally include low- and middle- medicine and to lead engagement income countries. initiatives with companies. IMPACT In particular, in the previous index Ecofi uses ATM Index data in ASSESSMENT edition, published in 2019, there order to prepare its engagement

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