Tuesday, June 19, 2007

Fund managers urge Big Pharma changes

A group of large international fund managers will today urge the pharmaceuticals industry to make public more information on drug research and create new business models offering better value for money.

A report commissioned by US, Dutch and British funds with $20bn invested in the healthcare sector saysinvestors want greater insight into the quality of drugs under development and ways to assess productivity.

The study is the latest in a series of calls to improve performance in the pharmaceuticals sector, and highlights tensions between short-term investors and some longer-term institutions, including pension funds.

"Pharma Futures", prepared by the consultancy SustainAbility in consultation with investors and pharmaceutical executives, calls on the drug industry to become more involved in risk-sharing and to accept lower profits in exchange for boosting sales of important drugs around the world.

Martin Eijgenhijsen from ABP Investments, the Dutch fund that jointly sponsored the report, said he had shifted his investments away from "big pharma" in recent years towards medical technology, biotechnology and other niches in the sector.

"Big pharma has not delivered [high] returns. It's been quite disappointing for a while," he said.
Mr Eijgenhijsen said he had become involved in the project because he was frustrated with the fact that most pharmaceuticals research was prepared for short-term investors, while he needed information on long-term strategic trends.

More at the FT

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