Health workers at an Ebola quarantine unit in Muma, DRC in June 2017 © AFP
Experimental feature

Listen to this article

Experimental feature

Pandemics are a risky business, not least for drug companies, as the most recent flu outbreak in 2009 showed: businesses are criticised for having failed to invest more in treatments and vaccines ahead of a crisis, attacked for charging too much during the crisis and, once the event has passed and sometimes proved less serious than feared, accused of scaremongering.

Now investors with strong nerves can share the pain — and the potential rewards. The World Bank has launched a pandemic bond. In normal times, buyers will receive an attractive coupon on the financial instrument. In the event of an outbreak of infectious disease, they sacrifice income or capital as their money goes to rescue organisations and countries in need.

Such investments are not for the faint-hearted. They will go down as well as up. But for investors with the necessary funds and public spirit, one advantage is that money is available more efficiently up front — although that presupposes governments and other recipients have the capacity to use it well.

Another broader benefit is that the bonds draw the attention of financial markets to the probabilities and impact of future pandemics. The flu and Sars bond is priced at 6.5 per cent over six-month US Libor — the rate at which banks lend to each other. The separate Ebola bond is priced at 11.1 per cent over. WilI investors’ view of the risks diverge from those of scientists and doctors?


Three questions

Flemming Ornskov, chief executive of Shire, the pharmaceuticals group.

What has been the impact of Brexit?

Brexit has not really changed anything. Our primary listing is on the London Stock Exchange and we do a lot of clinical trials in the UK. We are watching what’s going to happen with the European Medicines Agency: we have 20 late stage products. Our headquarters are in Ireland and there’s no plan to change that. One of the key advantages of Shire is that we are in 70 countries and have a diverse portfolio so we are not dependent on one country or franchise.

Are you concerned about pricing pressure and access to medicines?

There is more public debate on pricing, and we’re extremely well positioned. We have a young portfolio, are launching a lot of new products and demonstrating significant value to patient groups and payers on health economics and quality of life. With rare diseases, there is less price differential than on other products between countries. When you have innovative, first-, best- and only-in-class medicines, substitution is low.

What are your reflections on the [$32bn] merger with Baxalta last year?

The three things I learnt that were important were speed, communication and transparency. People know you will make changes, so make them fast. Tell them what you are going to do, do it and do it fast — people respect that. The result is a better financial outcome. I worked in big pharma where merged companies took many, many years to be integrated. What our team has achieved in one year is just amazing. 


Chart watch

Trumpcare travails Criticism of Republican healthcare proposals intensified when the CBO budget watchdog said the reform unveiled in the Senate would lead to 22m more Americans losing coverage. The plans would however cut the federal deficit by $321bn. Plans for a vote were delayed as horse-trading continues. (Kaiser, FT)


News round up

Cholera crisis Yemen is now dealing with the worst outbreak in the world after the number of cases topped 200,000 following two years of conflict. (WHO/Unicef)

Impact of aid US malaria donations saved almost 2m African children, according to a study published as NGOs rage against proposed cutbacks in US overseas heath spending. (NYT, Politico)

Cancer in Africa The African Access Initiative brings oncology companies together with African governments and hospitals to improve healthcare, develop cancer research and increase the availability of life-saving medicines. (Devex) 

Drugs warning The UN’s World Drugs report said 29.5m people suffered from drug use disorders, with opioids the most harmful. Stat forecasts this class of drugs could kill half a million Americans over the next decade, but is there a data collection problem? (UN, Stat, FiveThirtyEight)

Health and tax The respected British Social Attitudes survey showed a backlash against austerity with Brits wanting the government to spend more on health, even if it meant a rise in taxes. (National Health Executive, NatCen) 

Smoking ban success Since smoking in indoor venues was outlawed in England ten years ago, deaths from heart disease and strokes have fallen by more than 20 per cent. The habit remains much more common among certain groups, including younger women. (Guardian)

Antidepressant jump The UK’s National Health Service prescribed a record number of the drugs last year, prompting questions about whether doctors were too ready to prescribe or whether it means more people are getting the help they need. (The Guardian)

Pregnancy-related deaths Women who give birth in the US have a greater risk of dying relative to other rich countries but California is bucking the trend. (Vox)

Contraception Contraceptive and maternal services still fall far short in developing regions but there are signs that modern methods of contraception are becoming more widely available. Here is a fact sheet on US policy on aid for family planning overseas. (Guttmacher Institute, Kaiser) 

Scientific publishing Are scientists getting a bad deal from a very profitable business? And does the industry have too much influence over what scientists choose to study? (The Guardian)

Online privacy Google has removed medical records from search results. Concern has mounted recently after hacked patient data appeared online (Bloomberg)

The pain of Alzheimer’s A reminder that the disease does not just manifest itself in memory loss. Rage, paranoia, depression and incontinence are all common symptoms. (NPR).

Surveillance Keeping tabs on people’s health, when conducted ethically, is necessary to stop the spread of disease and to tackle inequalities, but how is this balanced against the need for privacy and other issues? (WHO)

Workplace health Wellbeing should be a boardroom priority and highlighted by recruiters as a younger more health-literate generation enters the workforce, faced with working well into their 70s. (Bupa)

Tech update Makers of wearable devices are struggling with the “so what” factor as users of sleep trackers find the devices overpromise and underdeliver. More encouragingly, a tiny sensor, once swallowed, can alert patients when they have forgotten to take their medication. (FT, Chicago Tribune)


Best from the journals

Drug prices Better regulations, such as those now being enforced in the UK, are needed globally to stop generic drug companies holding patients to ransom for life-saving treatments. (The Lancet)

Ebola burials Although volunteers safely buried thousands of victims during the Ebola outbreak in west Africa, some funerals served as “super-spreader” events. More time must be spent building trust with communities and understanding their cultural practices. (PLoS)

Brexit and health The UK might still prosper by remaining a member of the European Medicines Agency but accepting the decisions without any political control. A UK regulator could also accept decisions from other agencies such as the US FDA. Others are more pessimistic about the post-Brexit landscape. (eCancer, The New European)

Avoidable deaths What analysis of the 1.2m avoidable deaths in the EU in 2014 can teach us about the quality of a country’s healthcare and its public health policies. (Lancet)

Night shifts Working at night is associated with making the body less able to repair the daily damage to its DNA. Taking melatonin may be one way of reducing the possibility of carcinogenic damage. (BMJ Occupational and Environmental Medicine)

Drug approvals Is it fair to accuse regulators like the FDA and EMA of slowing down approvals? (BMJ) 

Cosmetic changes The US cosmetics industry is enormous but lacks proper regulation. Unlike drugs and medical devices, Congress has historically not required manufacturers to obtain pre-market approval before selling a new product. (JAMA).

Noise annoys Misophonia and why some sounds bother us more than others. (PLoS)


Podcast of the week

HIV The global response to the disease and the effect on children’s health: Discussion with Charles Lyons of the Eizabeth Glazer Pediatric Aids Foundation (Center for Strategic and International Studies, 29m)


In case you missed it

FT Health last issue: War and the spread of disease

Latest news at and on Twitter at FT_Health

Read previous editions and discuss the issues on our Facebook page.


Final thought

Purls of wisdom We’ve been preoccupied with digital health this week but not all initiatives need to be so high-tech. A new review brings together the evidence that shows knitting lowers blood pressure, reduces depression and anxiety, slows the onset of dementia and distracts from chronic pain. (Knit for Peace)

Get alerts on Shire PLC when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.

Follow the topics in this article