Walking together on the road to recovery
For over a year now, we have seen first-hand how a global pandemic can be a disruptive force that is very hard to prepare for. Despite years of warnings that novel coronaviruses were among the pathogens most likely to cause a global health emergency, the pharmaceutical industry, as well as society at large, was ill-prepared for the COVID-19 pandemic 1. Billions of lives have been directly impacted, and we are all collectively – across sectors, regions and communities – working to recover from COVID-19 and its many impacts. Every person or organisation can play a role in the recovery. We believe that it is part of our duty as an integrated wealth manager to engage pharmaceutical companies or call on governments to take coordinated and equitable action, among others. At Van Lanschot Kempen, good health and well-being is a core sustainability theme.
We have pledged our support for the Access to Medicine Foundation (ATMF) global investor statement on effective, fair and equitable global response to COVID-19. There is a rigorous effort underway to roll-out vaccinations in developed economies, but less well-off economies, that already had a greater economic disadvantage at the outset of the pandemic, have limited access to vaccines. A study commissioned by the International Chamber of Commerce Research Foundation found that the global economy stands to lose as much as US$9.2 trillion if governments fail to ensure that developing economies gain access to COVID-19 vaccines. Working together to secure sufficient vaccines globally comes at a significantly lower cost.
It is in our best interest to help countries with less means to vaccinate. We are keen to do our share of work on this and encourage our peers, governments, pharmaceutical companies and all other relevant stakeholders to do the same. We incorporate access to medicine into our ESG analysis of pharmaceutical companies. Those not willing to provide access run the risk of a reduced license to operate from society and might miss out as business partner in developing low- and middle-income countries on the long-term.
Throughout 2020 we have seen some pharmaceutical companies, like AstraZeneca, help fight the coronavirus pandemic not for profit. This is a great example of contributing to a solution and is improving the long-term sustainability of these companies. Over the past year, we engaged with Novo Nordisk and Roche2 on their COVID-19 related responses and the critical role they have in the recovery. Prior to the outbreak of the pandemic, we were also in engaging these companies in relation to the Governance of Access pillar from the ATMF index. The index has seen a positive movement in responsible promotional practices, with more companies adopting reward schemes that decouple sales staff incentives from being purely connected to sales targets. The ATMF states that by moving away from rewards pegged primary against sales targets, companies can limit the risk of mis-selling or over-selling products. With this in mind, we engaged with Novo Nordisk and Roche to implement sales incentive to promote more long-term and qualitative targets in China. We will continue our engagements with Novo Nordisk and Roche throughout 2021.
However, we must also look beyond COVID-19 and 2021. The R&D effort by 20 of the world’s largest pharmaceutical companies into other priority emerging infectious diseases remains alarmingly low. Without the continued commitment by these companies into pandemic preparedness, the world will remain worryingly vulnerable to pandemics and epidemics. Our call to pharmaceutical companies is two-fold: be committed to the future via R&D, but also to today by using reasonable sales incentives and maximizing the access of existing products to underserved populations of the world.