How equitable access to medicines can drive sustainable returns for investors

The pharmaceutical industry stands at a critical juncture. As advances in science allow companies to develop an unprecedented range of life-saving products needed by populations around the world, global interest in health equity has never been higher.

Employees, citizens and other stakeholders are increasingly aware of the need for responsible access to medicines in the wake of the COVID-19 pandemic, pushing companies to recognise that making healthcare accessible is both a moral imperative and a prerequisite for sustainable growth.

The 2024 Access to Medicine Index, which measures the pace of progress in access to medicines in low- and middle-income countries (LMICs), shows how prioritising equitable access can unlock new markets, drive sustainable returns, and create meaningful societal change.

A key takeaway for pharma investors is the scale of the opportunity. Around 80% of the global population already lives in LMICs and that proportion is only going to increase. Yet many of these nations have historically been underserved, relying on costly imported medicines.

Today, these countries are increasingly focused on improving local availability of essential medicines, spurred by the experiences of both COVID-19 and the HIV crisis before that, where collaboration between local manufacturers, public organizations and international partners led to significant advancements. New infections and AIDS-related deaths have declined by over 60%, thanks to access to the right medicines.

And demand is moving well beyond infectious conditions. A wave of non-communicable diseases (NCDs) like cancer, diabetes and cardiovascular disorders is spreading to LMICs as people in emerging markets are living longer and adopting more Western lifestyles.

Investors who recognise and respond to this challenge can position themselves at the forefront of new, high-demand markets by supporting companies that prioritise local availability and affordability in their access strategies. As these economies grow, so does the potential to develop a loyal, expansive patient base in regions that previously had limited access to treatments. Indeed, it is already happening, with healthcare ranking as one of the top five industries driving growth in emerging markets and several multinational pharmaceutical companies generating 20-30% of revenues from these countries.

To maximise supply, pharma companies should be doing more to explore innovative access models, such as technology transfers and non-exclusive voluntary licensing agreements, which allow generic manufacturers to supply patented products in LMICs. These proven strategies enable essential treatments to reach more people, while providing reliable revenue streams for originator companies and winning them recognition in new markets. At the same time, there are other ways in which companies can expand their reach in underserved markets, including not-for-profit initiatives that complement commercial operations.

Despite the significant innovation power within the pharmaceutical industry, its reach remains uneven. The success of global brands like Apple and Coca-Cola, which have penetrated the farthest corners of the world, serves as a reminder that it is possible to achieve access at scale. Unlike these consumer giants, the pharmaceutical industry’s products can be hard to substitute with alternatives, yet they are often inaccessible in regions that need them most, even though mechanisms and tools exist to change this.

It is important to recognise that innovation does not stop at product development. It should also include strategic planning to prioritise access through early registration, streamlined production and thoughtful product distribution. The Index showcases the potential for various tech-enabled solutions and innovative financing models to support these efforts – pathways that can maximise global patient reach and yield significant financial returns.

At the same time, there are concerning shortfalls in pharma industry R&D, which is often centred on a narrow range of diseases targeting more profitable high-income markets. As global health challenges become more complex and inter-connected, companies must face up to the fact that focusing solely on high-income markets is not sustainable. The global rise of drug-resistant infections and the growing burden of NCDs demands holistic research solutions that address the needs of lower-income regions where these illnesses are prevalent but affordable treatments are scarce.

Investors have the power to encourage the pharma industry to allocate R&D resources in such priority areas. By doing so, companies will not only contribute to global health resilience but also position themselves as leaders in opening new markets, yielding both commercial and reputational returns.

The best performers in the industry are already making strides by integrating patient-centric models, showing that it is possible to balance profitability with social responsibility. It is time to leverage these successes to foster a competitive drive towards access-oriented strategies across the globe.

The 2024 Access to Medicine Index is more than a research report – it is a call to action and a blueprint for change. As the world faces new and evolving health challenges, trust in the pharmaceutical industry’s ability to deliver healthcare for all is paramount. By choosing to support visionary leaders within companies who prioritize actionable strategies to make their medicines available and affordable at scale, investors can be part of a movement that transforms healthcare around the world.