How investors can bolster global health equity while generating long-term value

The pharmaceutical industry has been at the forefront of science, bringing us cutting-edge drugs that tackle some of the most challenging diseases and help people all over the world.

As much as we need new, innovative medicines, the reality is that some people today still struggle to access those life-changing innovations. Billions of people living in low-and middle-income countries (LMICs) are still unable to access basic, essential healthcare products — let alone the latest medicines and treatments on the market.

The need to balance people and profit has always been a challenge for the pharmaceutical industry, but companies are now under increasing pressure to recognize their responsibility in the fight for global health equity. At the same time, with the rise of environmental, social and governance (ESG) considerations in investment processes, companies that don’t focus on making a positive impact on people and the planet will lose out.

The rise of ESG has not been without controversies and complexities, and ESG frameworks are still currently far from perfect. But the recalibration of value beyond financial metrics has seen more and more investors expecting pharmaceutical companies to demonstrate commitment to building sustainable business models.

For more than a decade, the Access to Medicine Foundation has engaged investors and supported them to integrate access-to-medicine considerations in their investment process and stewardship practices. And investors are paying attention.

The Foundation currently coordinates the largest investor signatory group in health, and in doing so is helping them to actively engage companies on access and pose crucial questions. If access to medicine is to go further than being an ESG tick-box exercise, it is vital for investors to understand whether company leadership is driving the integration of access-to-medicine metrics into their overall business strategies.

By asking these kinds of questions, investors can encourage companies to take steps to make their healthcare products more available, accessible and affordable in LMICs. We have already seen the power investors have in driving tangible outcomes in health equity. Especially in challenging company leadership to make access to medicine a business priority — and not simply a nice ESG add on.

In 2022, for example, Dutch institutional investor Achmea Investment Management declared that it would start voting against say-on-pay proposals from pharmaceutical companies unless they were linked to access to medicine. The firm also supported a letter endorsed by 65 institutional investors with a combined $3.5 trillion in assets under management, calling on pharmaceutical companies to align executive compensation with the aim of ensuring equitable vaccine distribution.

Inequitable vaccine distribution during the COVID-19 pandemic was egregious and clearly demonstrated to the world how far we still need to go to make sure everyone, no matter where they live, has access to medicine when they need it. By filing shareholder resolutions at pharmaceutical companies, the Interfaith Center on Corporate Responsibility (ICCR) — a coalition of faith- and values-based investors — has also demonstrated how investors can challenge policies that hinder fair access.

In December 2022, ICCR members and shareholders of nine major pharmaceutical firms called for transparency regarding the impact of patent protection strategies on medicine access. In 2023, the ICCR also reported that 11 shareholder proposals on the use of patents, pharma lobbying and pricing and access strategies for COVID-19 medicines were included in the 2023 proxies of eight pharmaceutical companies, despite opposition from company leadership.

It’s through actions like these that investors can hold pharmaceutical companies accountable. Not only will this ensure medicines and treatments reach the people who need them most, but it will position investee companies for long-term success. Nearly 80% of the world’s population lives in LMICs. Beyond the ethical obligation of getting medicines and treatments to the populations in these countries, these underserved markets present significant growth potential.

By making sure access is inextricably tied to the way pharmaceutical companies do business, investors can generate long-term, sustainable value that does not put profit before people. In fact, it will save lives.