“Varma wants to be at the forefront alongside major investors in engaging with pharmaceutical companies, as the pharma industry is in a position to resolve fundamental global problems. When a viable coronavirus vaccine is developed, it is essential that it is also made available to lower-income, developing countries. This requires ensuring fair allocation and reasonable pricing,” says Varma’s Director of Responsible Investment, Hanna Kaskela.
There are currently more than 200 coronavirus vaccine and drug candidates in development in various parts of the globe.
“Investors are interested in the innovative aspects and effectiveness of pharmaceutical companies’ R&D efforts, as new pandemics are also likely to occur in the future and, unfortunately, with greater frequency. Pharmaceutical companies should therefore invest in R&D for dangerous infectious diseases and co-operate closely in sharing research information,” Kaskela stresses.
Developing new medications and vaccines is costly and usually takes several years. “Pharmaceutical companies that develop medications for rare diseases and are able to respond to new medical needs – not just in developed countries, but also in developing countries – despite the high cost and lengthy time frame are interesting from a responsible investment point of view,” says Portfolio Manager Kaisa Ojainmaa of Varma.
The initiative to pharmaceutical companies has been signed by 65 investors, who manage altogether EUR 5000 billion in assets. They include insurance companies, asset management companies, banks and pension funds from around the world. The initiative's signatories have invested their assets in numerous pharmaceutical companies and initiated discussions with different pharma companies during the spring on pricing, availability and co-operation related to a vaccine.
The pandemic has increased the use of artificial intelligence in diagnostics and drug development
Varma is monitoring how the coronavirus pandemic is changing the entire health-care sector. According to Kaskela, the pandemic has already increased the demand for remote medical and digital services and the use of technology and AI in diagnostics and drug development.
The coronavirus crisis also revealed the lack of pandemic preparedness in health care everywhere in the world, as well as the disproportion that exists between health-care financing, expectations and reality.
“In addition to R&D, the pandemic is likely to increase investments in medical technology and hospital equipment as obsolete and insufficient capacity is updated,” says Ojainmaa.
Varma acquires research data from pharmaceutical companies through Bill and Melinda Gates’ Access to Medicine Foundation to support its investment decisions. The Access to Medicine Foundation stimulates and guides pharmaceutical companies to do more for the people living in low- and middle-income countries without access to medicine. The index initiated by the foundation ranks all pharmaceutical companies in the world according to how well they promote access to medicine.