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Research Partnership Update: Access to Medicine Foundation – Generics & Biosimilar Medicines Programme
As long-term investors with a focus on sustainability, we have always been interested in how healthcare companies approach the issue of access to medicines. On 1 January 2024 we entered a three-year research partnership with the Access to Medicine Foundation (the Foundation), an independent non-profit organisation that seeks to mobilise companies to expand access to their essential healthcare products in low- and middle-income countries.
Our partnership and funding will primarily support their Generics & Biosimilar Medicines Programme (G&BM) alongside the overall functioning of the Foundation and their core research activities.
In September 2023, we co-hosted a multi-stakeholder event with the Foundation in India, which launched their first Generic & Biosimilar Medicine report.
Generics are pharmaceutical drugs whose patent has expired, which allows them to be made and sold by a different company to the one who discovered them. Examples include common painkillers and drugs to treat diabetes, high blood pressure, high cholesterol and depression.
Biosimilars are biologic medicines which are also off-patent. Although they are made the same way as the originator medicine, the biological processes and the drugs' complexity introduce natural variations. They cannot be classed as generics but should offer the same benefits and safety profile as the drug they are based upon.
The report assesses five of the world’s leading producers of generic and biosimilar medicines. It identifies what steps each company currently takes in respect of access to medicine and areas where each can focus attention with the aim of expanding access e.g. affordability, product registration, supply, local availability and adaptive research & development.
Manufacturers of generic and biosimilar medicine, including those based in low-to-middle-income countries, play a critical role in widening access to essential medicine globally. Multiple manufacturers can produce off-patent medicines at high volumes and supply them at lower costs than the original patented medicines helping drive greater access and affordability.
Furthermore, given only 10% of the drugs on the World Health Organisation’s list of essential medicines are on-patent1, the size of the opportunity and potential impact becomes clear. But, despite this potential, generic and biosimilar medicines remain out of reach for many in low-to-middle-income countries, creating an unacceptable gap between health outcomes of those in rich countries versus those in low-to-middle-income ones. A topic we have recently written about.
We believe further understanding of the role generics manufacturers have in improving access is an important investment consideration, not only is it an opportunity to drive positive human development but we believe it is also an opportunity for investors to generate sustained shareholder value on their investments. The cornerstone of our investment philosophy is discovering high-quality companies, stewarded by exceptional people, with strong financials that enable them to contribute to, and benefit from, sustainable development. How health care companies address equitable pricing and access to medicines are useful indicators of the quality of management and resilience of the business franchise.
Equally, the Foundation’s report is an important tool to help build a picture of areas where generics companies can continue improving and where investors, including ourselves, can focus their engagements to drive better health and business outcomes, raising the bar for what affordable and accessible medicine means worldwide.
Our funding will primarily support engagement between the Foundation and various stakeholders on the opportunities identified in the report. This includes the five underlying companies, the wider investor community, governments and other global health stakeholders. It will also support a thematic study and ‘Amsterdam Session’ - a workshop involving independent experts, investors, and pharmaceutical companies to learn from each other - which unpack the key access issues in this area and aim to bring additional companies into the G&BM programme.
The Foundation’s approach to engagement shares many characteristics to our own. Both recognise the important role investors play in company engagement, believing investors can guide investee companies towards positive progress on healthcare equity and a more sustainable profile. The Foundation’s report serves as a framework to assist investors to engage on the subject, including a better understanding of the issues, their importance and relevant questions to ask. It helps build a picture of areas where generics companies can continue improving and where investors, including ourselves, can focus their engagements to drive better health and business outcomes, raising the bar for what affordable and accessible medicine means worldwide. As an output it shares many goals and similarities with our own approach to commissioning bespoke research through our tendering process.
As part of our support we have accepted the opportunity to become a ‘lead investor’ on the G&BM Programme, engaging directly with one of the five underlying companies. We anticipate work starting in Q2 2024 and continuing throughout the remainder of the programme.
Our partnership represents an opportunity to work more closely with, and learn from, an organisation we admire, one we have followed and used since the launch of their flagship Access to Medicine Index in 2008, and an opportunity to continue supporting their important work with generics and biosimilar companies in delivering greater access to healthcare globally.
As long-term investors focused on quality and sustainability, we think generics franchises built on providing access to high-quality medicines at affordable prices are set to benefit from continued growth tailwinds over the coming decades.
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