UK/NETHERLANDS â€" A group of pension funds has told pharmaceutical firms they need more information about the industryâ€™s emerging market strategies.
A report co-sponsored by the two schemes, Pharma Futures 3: Emerging Opportunities, said emerging markets could â€œrevitaliseâ€ pharmaceutical industry growth â€“ but said business models needed to change to account for the distribution and pricing realities of emerging markets.
USS â€“ which invests in around two-thirds of the top 16 pharmaceutical firms and has around 6% of its assets invested in the sector â€“ said emerging markets could reinvigorate the earnings of the sector.
But it said the pharmaceutical firms needed to explain how they would achieve this.
Co-head of responsible investment Daniel Summerfield said pharmaceutical firms also needed to develop strategies for providing affordable medicines to the poor in these countries.
He said: "How these firms provide medicines to the very poorest people in emerging markets while continuing to provide to the middle-class in these markets will be critical to their success.â€
APG Investments senior portfolio of health care Martin Eijgenhuijsen said: â€œInnovative and scalable business models can address health care needs for billions of people and will be recognised as a profit centre by investors when proper guidance is provided.â€
Pharma Futures is an initiative between the pharmaceutical industry and its investors to help them understand each others needs and strategies better.
It was founded in 2004 by institutional investors including USS, APG and the Ohio Public Employees Retirement System (OPERS).
As well as USS and APG Investments, the Pharma Futures 3 working group included representatives from organisations including Astra Zeneca, GSK, Novartis and the Bill and Melinda Gates Foundation.
The top stories this week were the High Court's decision to block the £12bn annuity transfer from Prudential to Rothesay Life, and a separate court ruling that 'raises the bar' for pension rectification exercises.
Guaranteed minimum pension (GMP) equalisation has soared to the top of pension schemes' to-do lists, with 58% stating it is a priority project, research from Equiniti has revealed.
Professional Pensions is holding its defined contribution (DC) conference on 4 September.