The City turns up the heat on drug companies to make treatment available in poorest countries

Leading British financial institutions have warned drug companies that blocking affordable access to treatments in poor countries could undermine public confidence in them and do long-term damage to their share value.

The warning comes from major investors, including Jupiter, Schroders and Legal and General Investment Management, which together account for £600 billion of investments. The investors fear that the determination of the pharmaceutical giants to block the Doha trade agreement, which would allow developing countries to side-step patents on new drugs and make their own generic medicines, could provoke public anger.

International Development Secretary Clare Short has also warned that European and American resistance to the Doha trade liberalisation was trapping the developing world in poverty. The Doha meeting of the World Trade Organisation said that access to medicines for treating HIV, TB and malaria would be agreed by the end of last year. Ms Short said in a speech to the Royal Institute for International Affairs in March that stalemate at the next WTO ministerial conference in September would be a “tragic missed opportunity”. As well as agreement on medicines, she is urging deals to tackle unfair trade and boost growth in the developing world.

Also in March, ISIS Asset Management and the Universities Superannuation Scheme (USS) used an investor statement to encourage pharmaceutical companies to work with governments to make medicines more accessible throughout the world. They published ‘good practice’ guidelines that encouraged dual pricing so that drugs would be cheaper in poor countries, and called for “sensitivity to local circumstances” when considering enforcing patents or licensing local manufacturers to produce generic drugs.

ISIS and USS urged companies not only to work with governments but also to pressure the governments of wealthy nations to give money to the Global Fund for AIDS, TB and Malaria.

Olivia Lankester, senior analyst at ISIS, told the Guardian newspaper: “Our main concern is that continuing high-level criticism of the sector will, over time, damage its ability to operate.” She said she thought controversy could undermine the companies’ arguments for strong patent protection that enables them to recoup drug development costs. ISIS’s view was that the companies should act out of self-interest.