Miracles come in many forms. The latest miracle to sweep the western world comes in the shape of a tablet or can be found within a medicine bottle. Semaglutide is a daily injection that helps people lose weight by reducing their appetite. It is one of many weight-loss drugs to hit the market.
Elon Musk and Jeremy Clarkson have admitted to using such treatments while games are played online to unmask the celebrities who have joined them.
But this is not just about vanity. Semaglutide is available on the NHS. Developed world governments are allocating more of their tax income to healthcare while their GDP is taking a hit from lower productivity as people slip out of the workforce on medical grounds.
Obesity is one factor behind a range of chronic illnesses including cancer and diabetes. Another major demand on the care system is the increasingly ageing population.
If an example is needed of the demand and destruction that a healthcare crisis can cause, just look at Covid.
Covid was more than a pandemic. It was a crisis on par with a war. It put companies into bankruptcy court, destroyed economies and took our nearest and dearest from us. If it happened again, would we manage it better?
“The world is certainly more sensitised to what it takes to manage a pandemic,” says Steven Slaughter, a portfolio manager in the intrinsic value team at Manulife Investment Management. He adds that Covid has left people with a “better focus on and appreciation for their health, the health of their families and the health of their co-workers”.
Yet there are potential healthcare crises that could rival Covid in terms of the number of lives it claims.
The drugs don’t work
HIV and cancer have for decades been names that people do not want to hear when speaking with a doctor. Well, there is another condition that has joined them in that it kills millions of people every year: antimicrobial resistance.
This is where bacteria evolve to a point where medicines, such as antibiotics, do not kill them anymore. It means that people could die from something as trivial as a grazed knee. This is already happening.
In 2019, more than 1.2 million deaths were directly attributed to the condition, meaning that it killed more people than HIV or breast cancer. If its wider impact is considered, bacterial infections are responsible for a similar number of fatalities as Covid.
There were 6.8 million Covid deaths over three years, according to John Hopkins University, while there were 4.9 million indirect deaths attributed to antimicrobial resistance in 2019 alone. This is based on estimates from the Global Research on Antimicrobial Resistance Project.
The situation is only expected to get worse. An independent review in 2016 by Lord O’Neill concluded that not addressing this issue could lead to 10 million deaths globally each year by 2050.
Maria Ortino, a global ESG manager at Legal & General Investment Management, says that antimicrobial resistance undermines how we look at modern medicine. “We will not be able to perform even standard surgery if we do not have antibiotics. “We would highlight antimicrobial resistance as a systemic risk equivalent to climate change,” she adds. “We need to deal with antimicrobial resistance, otherwise we might not be around to deal with anything else.”
There are other impacts for people to consider if they believe they are healthy enough to survive dying from a grazed knee. In 2016, the World Bank analysed the economic impact of superbugs, which are strains of bacteria, viruses, parasites and fungi that are resistant to most antibiotics.
The Bank estimated that if we do not do anything about the issue, around 3.8% will be wiped o the global economy. “That is equivalent to what we saw in the 2008-2009 financial crisis,” Ortino says.
This translates into global output losses amounting to more than $1trn (£800bn) a year after 2030, rising to $2trn (£1.6trn) by 2050, the World Bank estimates.
In the worst case scenario, $1.2trn (£961bn) of additional healthcare expenditure will be needed globally per annum unless we can get the situation under control.
A lack of clean water and sanitation as well as inadequate infection prevention and control are some of the reasons why antibiotics are becoming ineffective. Then there is the food chain where the use of antibiotics in meat production as well as in our water supply is fuelling the rise of drug-resistant superbugs.
Good in moderation
The good news here is that new antibiotics are being discovered, which attack bacteria in different ways than existing drugs.
Ortino says that although the discovery of new antibiotics is positive, it is only part of the solution. “A plethora of actions need to take place,” she adds. “One is having diagnostics to determine which specific treatment we should use. This would avoid using the wide spectrum of antibiotics, because the more you use them, the higher the frequency of resistance.
“It is important to remember that resistance of this nature is not a new phenomenon. This is bacteria’s natural evolution in resisting the medication that has been found to kill them. “The real problem is the speed at which the resistance is happening, which is down to the overuse of antibiotics.
“What we need to look at is the global consumption of antibiotics. The animal industry is where we believe that interventions predominantly need to take place,” Ortino says.
To halt the speed of drug resistance, investors’ need to look at how animals are reared for the food chain, how pharmaceuticals, who supply the industry with antimicrobials such as antibiotics, undertake their antimicrobial resistance stewardship activities and how water utility companies are able to monitor and possibly treat the uncontrolled release and disposal of antimicrobial agents in the water system.
“It’s a combination of the misuse of [the antimicrobial], the overuse of it when it’s not needed or the wrong use of it,” Ortino says.
She likens the misunderstanding of how to fix the problem to asking renewable energy companies to up their game in the fight against climate change instead of engaging with oil and gas companies.
Animal welfare is important. Better feed would help keep animals healthier, hence not needing to be treated with antibiotics.
There are many instances where animals need antibiotics because they are not well cared for. Having too little space to move is one problem. “They get infections due to how they are kept, rather than the naturally occurring infections we all get,” Ortino says.
“Action is needed today, rather than in five or 10 years. By then it will be too late,” she adds.
Beyond medicine
Healthcare inequality is a systemic risk. “Capital should be directed to companies whose products or services enable a better quality of life or contribute to a more equitable world,” Slaughter says.
This means that healthcare companies should be encouraged to look outside of their market to provide access to basic needs. These include efforts in sanitation, affordable housing, sustainable food, sustainable agriculture, education and financial services.
One company that has stepped in here is United Healthcare, which is building safer housing for the seniors it insures and provides access to healthier meals. “Providing a patient with safe housing and a better nutritional backdrop, hopefully makes them a better insurance risk,” Slaughter says.
“In the US, such companies have branched out beyond pure healthcare provision to look at the social determinants of ill health, which largely drive illness if not rectified,” he adds. “We are seeing companies that historically have been siloed in medical devices, pharmaceuticals or provision of care, investing in projects to improve peoples’ overall health.
“They are not doing this just from a societal perspective under the umbrella of ESG, but because it improves long-term wellness,” Slaughter says.
Branching out
This approach to reducing the strain on healthcare systems and improving productivity should also be taken by the pharmaceutical industry. Could a drug designed to treat one condition be tested to see if it has a positive impact on other conditions?
One example is Abbott Laboratories. In 2012 it created Humira, a drug to tackle rheumatoid arthritis, a condition which has profound societal impacts in that it makes sufferers immobile. The drug changed how that disease affects society.
The good news does not stop there. Abbott has since discovered that Humira can treat nine other diseases, including psoriasis, ulcerative colitis and Crohn’s disease.
“That is another trend,” Slaughter says. “The ability to expand the playing field, to take a drug or technology and branch out to address unmet medical needs is likely to continue.”
Fat loss drugs are another example of this serendipity. “Semaglutide is a fascinating drug developed initially for diabetes,” Slaughter says. “Novo Nordisk [it’s owner] ran separate trials and found that it is highly effective in lowering weight.”
The drug’s impact on obesity, which has huge health implications, is transformational. “How many knee surgeries do we do every year where if a patient dropped 30 pounds, we wouldn’t have to replace that knee?” Slaughter says.
“There are six cancers we are aware of that are tied to obesity,” he adds. “If we can cut the need to do those treatments for cancer 10 years down the road by treating obesity, we can knock down the need for orthopaedic procedures as a result of treating obesity.”
A new era
These are examples of how the thinking is changing the healthcare industry and among those working to put food on our plate and supplying the water we drink. It needs to if we are to protect society from the many threats to our wellbeing.
If Covid highlighted anything, it is how quickly a virus can spread across the world. We have to realise that being on the other side of the globe is not a protection strategy.
“Diseases travel quickly,” Ortino says. “If you misuse antibiotics or do not have access to them in places where there is an infection, that disease will travel quickly, and the resistance in that bacteria will travel with it.
“If there is a disease overseas, we can no longer see it as someone else’s problem,” she adds. “We need to take a global approach.”
This is an attitude which appears to be long overdue. “The historical precedent has been that we are somewhat reactionary when these things occur,” Slaughter says. “But for public health entities and governments – frankly, people with their hands on the cash registers – it would be more apt to think preventative as opposed to reactionary.”
Times are changing. “We are at an interesting point in history where we are branching out and beginning to think beyond the current use of a drug or a device and how we can apply it to conditions that we do not have treatments for,” Slaughter says.
Yes, this could be about boosting the revenues of developers, but if ailments are being treated there is a chance that it is saving the economy money in lost productivity and lower healthcare spend.
“Call me an optimist, but I have been in healthcare 37 years and the sky’s the limit,” Slaughter says. “There are a lot of things we can continue to work on that could improve humanity, improve our lives. Fortunately, they are coming from medical research labs.”
Our health could turn into another crisis that governments and care systems lose control of in the coming years. But adopting a prevention strategy alongside testing new and existing drugs could help save the world from a threat that is up there with climate change.
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