Get the right experience for you. Please select your location and investor type.
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.
Subscribe to our updates
To get regular updates and content from Stewart Investors, please register here.
Important Information
This material is a financial promotion / marketing communication but is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure.
Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.
We have taken reasonable care to ensure that this material is accurate, current, and complete and fit for its intended purpose and audience as at the date of publication. No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material.
To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may not reflect the views of everyone at First Sentier Group.
Past performance is not indicative of future performance. All investment involves risks and the value of investments and the income from them may go down as well as up and you may not get back your original investment. Actual outcomes or results may differ materially from those discussed. Readers must not place undue reliance on forward-looking statements as there is no certainty that conditions current at the time of publication will continue.
References to specific securities (if any) are included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. Any securities referenced may or may not form part of the holdings of First Sentier Group portfolios at a certain point in time, and the holdings may change over time.
References to comparative benchmarks or indices (if any) are for illustrative and comparison purposes only, may not be available for direct investment, are unmanaged, assume reinvestment of income, and have limitations when used for comparison or other purposes because they may have volatility, credit, or other material characteristics (such as number and types of securities) that are different from the funds managed by First Sentier Group.
Selling restrictions
Not all First Sentier Group products are available in all jurisdictions.
This material is neither directed at nor intended to be accessed by persons resident in, or citizens of any country, or types or categories of individual where to allow such access would be unlawful or where it would require any registration, filing, application for any licence or approval or other steps to be taken by First Sentier Group in order to comply with local laws or regulatory requirements in such country.
About First Sentier Group
References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Group, a global asset management business which is ultimately owned by Mitsubishi UFJ Financial Group (MUFG). Certain of our investment teams operate under the trading names AlbaCore Capital Group, First Sentier Investors, FSSA Investment Managers, Stewart Investors and RQI Investors all of which are part of the First Sentier Group. RQI branded strategies, investment products and services are not available in Germany.
This material may not be copied or reproduced in whole or in part, and in any form or by any means circulated without the prior written consent of First Sentier Group.
We communicate and conduct business through different legal entities in different locations. This material is communicated in:
- Australia and New Zealand by First Sentier Investors (Australia) IM Ltd, authorised and regulated in Australia by the Australian Securities and Investments Commission (AFSL 289017; ABN 89 114 194311)
- European Economic Area by First Sentier Investors (Ireland) Limited, authorised and regulated in
- Ireland by the Central Bank of Ireland (CBI reg no. C182306; reg office 70 Sir John Rogerson’s Quay, Dublin 2, Ireland; reg company no. 629188)
- Hong Kong by First Sentier Investors (Hong Kong) Limited and has not been reviewed by the Securities & Futures Commission in Hong Kong. First Sentier Group, First Sentier Investors, FSSA Investment Managers, Stewart Investors, RQI Investors and Igneo Infrastructure Partners are the business names of First Sentier Investors (Hong Kong) Limited.
- Singapore by First Sentier Investors (Singapore) (reg company no. 196900420D) and this advertisement or material has not been reviewed by the Monetary Authority of Singapore. First Sentier Group (registration number 53507290B), First Sentier Investors (registration number 53236800B), FSSA Investment Managers (registration number 53314080C), Stewart Investors (registration number 53310114W), RQI Investors (registration number 53472532E) and Igneo Infrastructure Partners (registration number 53447928J) are the business names of First Sentier Investors (Singapore).
- United Kingdom by First Sentier Investors (UK) Funds Limited, authorised and regulated by the Financial Conduct Authority (reg. no. 2294743; reg office Finsbury Circus House, 15 Finsbury Circus, London EC2M 7EB)
- United States by First Sentier Investors (US) LLC, registered with the Securities Exchange Commission (SEC# 801-93167).
- other jurisdictions, where this document may lawfully be issued, by First Sentier Investors International IM Limited, authorised and regulated in the UK by the Financial Conduct Authority (FCA ref no. 122512; Registered office: 23 St. Andrew Square, Edinburgh, EH2 1BB; Company no. SC079063).
To the extent permitted by law, MUFG and its subsidiaries are not liable for any loss or damage as a result of reliance on any statement or information contained in this document. Neither MUFG nor any of its subsidiaries guarantee the performance of any investment products referred to in this document or the repayment of capital. Any investments referred to are not deposits or other liabilities of MUFG or its subsidiaries, and are subject to investment risk, including loss of income and capital invested.
© First Sentier Group
