From cheaper drugs to better detection tools, value-driven pharmaceutical innovations are key to a sustainable healthcare industry
Advances in diagnostics, therapies and telehealth are allowing patients to lead fuller lives and also result in better outcomes for other stakeholders such as insurers and taxpayers
As society seeks to treat more people at lower cost and with better outcomes, making healthcare sustainable involves looking for true value as well as efficacy from novel drug molecules. Innovation needs to be holistic, focusing on wider benefits beyond how well the treatment works to achieve better outcomes for patients and other stakeholders such as insurers and taxpayers.
From an investment perspective, seeking true value does not mean focusing only on inexpensive treatments.
"Affordability is often equated with cheap, but that's not necessarily true," says Dr Nathalie Flury, co-head of Sustainable Healthcare Equity at HSBC Asset Management.
Roche's haemophilia drug, Hemlibra, for example, costs US$500,000 (approximately S$675,000), but it is significantly more affordable than the standard therapy, which on average adds up to US$1.3 million.
The established, more expensive therapy for haemophilia - a rare condition that affects the blood's ability to clot - also requires other drugs to be taken to prevent complications, whereas Roche's drug reduces bleeds by 98 per cent on its own, says Dr Michael Schröter, HSBC's co-head of Sustainable Healthcare Equity.
Dr Flury holds a Doctor of Philosophy (PhD) degree in biochemistry and oncology and has more than 20 years of experience in fund management. Dr Schröter, a PhD in biochemistry and immunology, has more than 20 years of pharmaceutical and biotech industry experience.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Together, they manage HSBC Asset Management's Global Investment Funds ("HGIF") - Global Equity Sustainable Healthcare Fund, which aims to achieve results by focusing broadly on true innovation that helps healthcare providers and payers do more for less.
HSBC Asset Management defines sustainability in healthcare as a system that improves, maintains or restores health while adhering to the highest environmental, social and governance (ESG) standards, thus benefiting society as a whole.
Prevention is better than cure
Besides developing better and cheaper drugs, prevention and early treatment also hold great promise in cutting costs while improving outcomes for patients.
One good example involves new colon cancer screening techniques that allow for less invasive and more regular testing, leading to earlier intervention that results in multiple payoffs for all parties.
Another example is liquid biopsies that can detect cancer earlier as well as track the progression more closely, enabling clinicians to adapt treatment paradigms accordingly.
"Everyone knows that if you can prevent a disease from developing by intervening early, it will be better for the patient with higher survival rates - and less costly for the healthcare system. These are the solutions we are searching for," says Dr Flury.
Combining diagnostics with therapies
Other emerging diagnostic investment themes include new testing possibilities enabled by the cutting-edge sequencing of genetic material at scale and at a lower cost. The combination of diagnostic tools with therapies to streamline and simplify condition management is another promising investment theme.
A good example for a very different combination of diagnosis and therapy, so to speak, is "closed loop" diabetes treatments consisting of insulin pumps paired with continuous glucose monitoring systems that, to a great extent, automate the management of diabetes.
These systems can cut patients' use of insulin and reduce the risk of developing diabetic complications, while enabling them to better monitor and manage their condition.
Such innovations, which allow patients to lead fuller lives, offer great potential as sustainable investment propositions that can deliver a wide array of health, lifestyle and economic benefits.
The future is telehealth
Finally, there is telehealth, which allows patients to be monitored and treated at home.
Dr Schröter says digital monitoring solutions that enable patients to leave hospital earlier, to be monitored by care teams while recovering at home, provide another promising investment proposition.
The savings can be huge for patients and payers as emergency room visits can cost US$10,000 per day in countries like the United States. "If you average two or three days, that's US$20,000 to US$30,000 saved," he says.
Dr Flury says telehealth is a long-term trend that will continue to accelerate even after Covid-19 is overcome. "Now that patients are online with their physicians, they will continue to use telehealth post-pandemic."
"For many people, especially in rural communities, going to the doctor is a huge effort. Telehealth makes it easier for everyone," she adds.
Important information
The HSBC Global Investment Funds - Global Equity Sustainable Healthcare sub-fund is offered as a Recognised Scheme in Singapore and is a sub-fund of the Luxemburg-domiciled HSBC AM's HGIF global flagship fund range.
This document does not constitute an offering document and should not be construed as a recommendation, an offer to sell or the solicitation of an offer to purchase or subscribe to any investment.
This advertisement has not been reviewed by the Monetary Authority of Singapore. This document is for information only and is not an investment recommendation, research, or advice. Any views and opinions expressed are subject to change without notice. It does not have regard to the specific investment objectives, financial situation, or needs of any specific person. Investors and potential investors should not invest in the Fund solely based on the information provided in this document and should read the prospectus (including the risk warnings) and the product highlights sheets, which are available upon request at HSBC Asset Management (Singapore) Limited ("AMSG") or our authorised distributors, before investing. You should seek advice from a financial adviser. Investment involves risk. Past performance of the managers and the funds, and any forecasts on the economy, stock or bond market, or economic trends that are targeted by the funds, are not indicative of future performance. The value of the units of the funds and income accruing to them, if any, may fall or rise and investors may not get back the original sum invested. Changes in rates of currency exchange may affect significantly the value of the investment. AMSG has based this document on information obtained from sources it reasonably believes to be reliable. However, AMSG does not warrant, guarantee or represent, expressly or by implication, the accuracy, validity or completeness of such information.
HSBC Asset Management (Singapore) Limited 10 Marina Boulevard, Marina Bay Financial Centre, Tower 2, #48-01, Singapore 018983 Telephone: (65) 6658 2900 Facsimile: (65) 6225 4324 Website: www.assetmanagement.hsbc.com/sg Company Registration No. 198602036R
Copyright SPH Media. All rights reserved.
