The pursuit of health and well-being - valuable on every level

The 17 United Nations (UN) Sustainable Development Goals (SDGs) provide a roadmap for ending poverty, protecting the planet, and ensuring that everyone on earth can enjoy peace and prosperity. The aim to achieve these goals by 2030 is highly ambitious, and can feel quite overwhelming.

Nevertheless, one specific goal: SDG 3, is of particular interest to businesses and therefore investors. It builds on solid advances in providing good health and ensuring well-being that are already being achieved. Vaccines and other medicines have reduced the burden of disease worldwide and increased average life expectancy. According to UN statistics, global life expectancy was around 46 years in 1950, but has risen to over 70 years today.

The problem is that these figures obscure significant regional differences due to major inequalities in medical care, particularly affecting poorer, economically disadvantaged countries. In response to this, SDG 3 offers a series of specific sub-goals that include reducing maternal and child mortality, protecting against communicable diseases like HIV/AIDS and tuberculosis, and combating non-communicable diseases such as cancer and diabetes.

Improving access to drugs in all regions

While progress is evident in some of these sub-goals, access to medical innovations is far from equally available across the globe. But there is hope. Many pharmaceutical companies are committed to sustainably improving medical care in disadvantaged areas. This commitment takes many forms, ranging from direct involvement by companies, to partnerships with governments and non-governmental organisations (NGOs), to technology transfer agreements with local companies.

The development of innovative drugs has often focused on the most lucrative markets, with research shifting towards precision medicine and advanced therapies, which are extremely expensive. This can mean that these drugs aren't available to people living in many low- and middle-income countries (LMICs), where health systems are often underfunded.

However, several current pharmaceutical products in the pipeline have the potential to reduce the burden of some of the communicable diseases that disproportionately affect people in LMICs, like HIV/AIDS, tuberculosis, malaria, and respiratory syncytial virus (RSV).

For example, until recently, there was no effective prevention or treatment for RSV, which causes the death of 100,000 children a year, 99 % of whom live in LMICs. Now, however, the approvals of Pfizer's Abrysvo (a vaccine for pregnant women) and Beyfortus (a prophylactic monoclonal antibody for infants) developed by AstraZeneca/Sanofi, offer new hope for preventing RSV deaths. Other drugs such as Clesrovimab (another antibody against RSV) from Merck & Co. are showing promising results in clinical trials.

Improving the quality of life

Of course, medical advances are already increasing many people's quality of life and life expectancy. New blood pressure-lowering drugs are contributing to a reduction in the risk of stroke. The success of drugs to treat diabetes and obesity are addressing what have become ever more common health issues, in poorer countries too. New therapeutic agents continue to be important in the treatment of many cancers.

Against this backdrop, it is plausible that the global pharma market could grow from USD 1.7 trillion today to an estimated USD 3 trillion by 2033. Still, it is likely that this sales growth will continue to focus on the developed markets, even though the need in LMICs is immense.

Diagnostic companies are also poised to benefit, as they must constantly innovate in order to improve the early detection of diseases, including cancer. Early detection is often a key factor in successful treatments. We expect that this will drive the growth of the medical technology market, which has estimated global sales of USD 629 billion this year and could rise to USD 944 billion by 2033.

Insights into corporate behaviour

The latest Access to Medicine Index, most recently updated in 2024, is a good place to find information on the progress companies are making towards reaching the SDG 3 goals. The index is based on analysis of how 20 of the world's largest pharma companies in 106 LMICs regulate access to medicines for 82 diseases, conditions, and pathogens. Importantly, the index not only considers the availability of already approved medicines, but also access to products still in development and to clinical trials.

Given the medical focus of SDG 3, it isn't surprising that investor interest in this area has focused on drug and medical technology companies. But healthy lifestyles are also an important element of global health and well-being. So investors would be well advised to cast their net wider to also include sports, hygiene, and nutrition companies in their SDG 3 focus.

We are convinced that this offers long-term investment opportunities, as well as the chance to contribute to enabling longer and healthier lives all around the world. However, no investment in stocks is without some risk of loss.