More accessible and effective health solutions: What is the social impact and economic potential?
A steepening trajectory
According to the OECD, public health spending in developed countries is expected to reach nearly 9% of GDP by 2030 before rising to 14% by 2060.1
Given this backdrop, it is unsurprising that one of the main priorities for governments - and individuals - worldwide is to get better access to quality medical cover, and to limit the cost to society, especially given the planet’s ageing population.
Most recently, the COVID-19 pandemic has starkly highlighted the need for robust preventive measures - as well as the importance of public support for scientific research.
The advances made in recent decades in terms of scientific discoveries and technological progress now make it possible to envisage medicine that is more accessible, more effective and, above all, more personalised.
At AXA IM, we seek to invest in such innovation by targeting companies tackling these issues head on and are able to provide solutions to the world’s myriad of medical challenges.
DexCom’s mission is to help patients with diabetes take charge of their disease. The California-based firm has developed a cutting-edge system using discreet sensors, whereby through an individual’s smart phone, their blood glucose levels can be continuously monitored, so there is no need to take blood samples.
The company continues to innovate and aims to improve the reliability, connectivity, design and cost-benefit of its products.
According to McKinsey, telehealth use is now 38 times higher than pre-pandemic levels.2 We believe that virtual services can help relieve congested medical systems, strengthen preventive medicine by lowering barriers to access and reduce health costs.
Teladoc Health is a global leader in virtual care and which has more than 70 million members worldwide.3 Its services cover daily care, similar to that offered by a family doctor - as well as referrals to specialists. The company also offers paediatric, mental health, wellness, and prevention services.
There is also US health insurer Centene. It which mainly acts as an intermediary for state-funded healthcare programmes – such as Medicaid – which represents some 67% of its revenues (as of 31/12/2020). Medicaid is a government-funded health insurance programme for low-income households.iv
Veeva Systems, is a provider of cloud-based software solutions for the life sciences industry. The company has more than 1,100 customers including large pharmaceutical groups and biotechnology companies.v Applications developed by Veeva Systems (including Veeva Vault Clinical, Veeva Vault RIM and Veeva Safety) help accelerate clinical development, improve safety, and simplify regulatory approval of new therapies.
Indian households are demanding better health facilities and quality care. Diagnostic testing is a major growth area, although the country remains largely under-served (especially in rural areas). Dr Lal PathLabs, a Delhi-based provider of diagnostic and related healthcare tests, has established a nationwide network of laboratories in India and provides a range of diagnostic tests, enabling disease prevention, surveillance and treatment.
While we do not invest vast amounts in large pharmaceutical groups, AstraZeneca is an exception.
Through its various access programmes, AstraZeneca aims to reach 50 million people by 2025.4 It focuses primarily on non-communicable diseases (e.g. oncology, cardiovascular, renal and metabolism, respiratory and immunology), which affect millions of people around the world. AstraZeneca has partnered with the University of Oxford to produce and distribute one of the COVID-19 vaccines. The company is committed to providing the vaccine for zero profit during the pandemic and will make it available to low-income countries for no profit in perpetuity. AstraZeneca has actively participated in Covax, an initiative that aims to provide equitable access to vaccination against COVID-19 in 200 countries.
The theme of protection, a strong social and economic dimension
The development of new therapies, as well as advances in disease diagnosis and prevention enable an improvement in the quality of life and longevity of populations. Technological democratisation is also driving rapid change by transforming the way under-served populations can access essential services.
There are significant social and economic challenges, and we consider the prospects for innovation and international development to be promising in the long term.
The companies are named as an illustration only and do not constitute investment advice or a recommendation from AXA IM.
- Telehealth: A post-COVID-19 reality? | McKinsey
- eladoc Health, Inc. - Teladoc Health Issues Inaugural Corporate Social Responsibility Report