The prospect of having the first supplies of at least a few effective Covid-19 medicines and vaccines by the end of 2020 is a key driver of recent market optimism. New treatments and vaccines are among the best bets for our societies against the risk of recurring Covid-19 flare-ups and persistent lockdowns into 2021.
Yet many experts are questioning whether current research and manufacturing efforts can deliver these medical breakthroughs as quickly as they are being promised. They also warn that anything short of a truly global effort to reach at-risk individuals in richer and poorer countries alike risks prolonging the pandemic, as well as supply and demand constraints, into the future.
This is why we are calling on our global pharma investor colleagues to step up their engagement activities and ask all governments and pharmaceutical companies to fully embrace the principles of collaboration and solidarity in our response to Covid-19. The process of developing, manufacturing, and distributing new medicines and vaccines will be faster and more efficient if governments and pharmaceutical companies work cooperatively and avoid a competitive race based on medical nationalism.
We urge pharma investors and pharmaceutical companies to undertake the following practical steps to accelerate research and development efforts and overcome potential barriers to rapid and widespread access to Covid-19 medicines and vaccines:
- Share intellectual capital — molecule libraries, patented compounds, processes or technologies, and the like — across the industry and with research institutions to facilitate the development of the most effective technologies.
- Work with governments across all levels of income, not just higher-income countries, to ensure rigorous but accelerated marketing authorization processes.
- Share manufacturing capacity if your own clinical trials are not successful to help speed up at-scale production of effective products from other companies.
- Set affordable prices based on different countries’ ability to pay to empower rapid government procurement.
- Agree to nonexclusive voluntary licensing agreements with quality-assured generic medicine manufacturers to mitigate the risk of supply constraints in low- and middle-income countries.
- Work with governments and international organizations, in particular the ACT-Accelerator and the COVAX Facility, to develop and implement a global allocation mechanism to distribute medicines and vaccines with the objective of maximizing the reduction of Covid-19-related deaths and protecting health systems.
Some pharmaceutical companies have already taken concrete steps in the right direction. GSK and Sanofi, for example, have combined their innovative technologies to develop an adjuvanted Covid-19 vaccine. Pfizer has offered its manufacturing capacity to support the production of medicines and vaccines developed by other companies. AstraZeneca has agreed to guarantee the supply of 300 million doses of its vaccine candidate to Gavi, and reached a licensing agreement with the Serum Institute of India for the supply of an additional 1 billion doses, principally for low- and middle-income countries. Gilead has signed nonexclusive voluntary licensing agreements with nine generic companies (such as Cipla and Mylan) to manufacture remdesivir for distribution in 127 countries that face significant obstacles to health care access.
The companies that two of us (S.S. and Y.T.) represent commit to stand behind our investee pharmaceutical holdings in taking, and expanding, these forward-looking steps. We will also work with the Access to Medicine Foundation to track actions taken — or not taken — and consider any impact the results of the next Access to Medicine Index may have on our investment strategies.
Global pharma investors with diversified global portfolios and long-term clients have a vested interest in these unprecedented industry efforts because the benefits from maximizing the strength of the economic recovery — that is, our benefits as owners of multiple businesses across sectors and countries — are significantly material. According to the International Monetary Fund, the difference between a strong or weak rebound in late 2020 and 2021 may amount to more than $10 trillion of economic output.
As investors in the health care industry and someone who helps track what pharmaceutical companies do for people living in low- and middle-income countries, we also see direct benefits for pharmaceutical executives who are bold enough to move beyond business as usual. Covid-19 represents the opportunity of a generation for pharmaceutical companies to save hundreds of thousands of lives, thereby recovering the industry’s somewhat tarnished reputation and relationship with all stakeholders. Moreover, government subsidies are offsetting the majority of the current costs of R&D and manufacturing, as well as reducing the risks of testing as-yet-unproven technologies, such as mRNA vaccines, which could be employed for profitable treatments in the future.
Global cooperation for speedy development, at-risk manufacturing, and worldwide distribution of Covid-19 medicines and vaccines is in the strong interest of everyone from patients around the globe who will benefit from therapies and vaccines to the biotech and pharmaceutical companies working to make them. A strong, united, global response to Covid-19 will represent the first step for pharma investors and the investment community at large to better understand and manage the systemic risks not only of pandemic preparedness but also drug-resistant infections.
Covid-19 has reminded us all of the economic and social implications when high-income countries and financial markets become complacent about the global reach of infectious diseases.
Sacha Sadan is director of investment stewardship for Legal & General Investment Management. Yo Takatsuki is head of ESG research and active ownership for AXA Investment Managers. Damiano de Felice is the director of strategy for the Access to Medicine Foundation.