Investing for good

The growing problem of antimicrobial resistance

As part of the second LGIM Sustainability Summit held 14 June 2022, we welcomed former Chief Medical Officer Sally Davies to talk about antimicrobial resistance (AMR) and what we can do to stop it.

24 Jun 2022

According to research published in The Lancet medical journal, at least 1.27 million people died as a result of antibiotic-resistant infections in 2019. "It's already the third most common underlying cause of death, after heart disease and stroke - and that's only counting bacteria, let alone viruses and fungal infections", said Sally Davies, Master of Trinity College Cambridge, former Chief Medical Officer from 2010 to 2019, and UK Special Envoy on Antimicrobial Resistance. Sally joined us at the second annual LGIM Sustainability Summit to discuss the risks AMR poses, and what investors can do to combat it.

AMR happens when pathogens such as bacteria, viruses, fungi or parasites mutate over time and stop responding to medicines. As a result, the infections they cause become harder to treat and contain. If it continues, Sally warned, medicine will be sent back to the 19th century. Procedures like caesarean sections or hip replacements become much more dangerous if we can't treat infections, as does cancer treatment. "Even something as simple as shaving can give you an infection, and if you haven't got the right treatment, that can be serious," she said.

A market failure

Unfortunately, AMR is a problem that will continue to get worse – unless we take action.

It's not just public health that AMR threatens - the global economy is at risk too. In 2016, a report by the World Bank found that AMR could cause a 3.8% reduction in annual GDP by 2050, pushing nearly 30 million people into extreme poverty – the vast majority of whom live in low-income countries.

So why is this happening? Lack of investment in new treatments is a key reason. "The medicine cabinet is empty of new drugs because we pay peanuts for antibiotics – it's a market failure," Sally noted. "Many pharmaceutical companies don't want to invest in antibiotics because they don't make much of a profit." According to the Global Research on AntiMicrobial resistance (GRAM) project at the University of Oxford, 63 new antibiotics were developed for clinical use between 1980 and 2000, but between 2000 and 2018, only 15 more were approved.

Companies that aren't investing in antibiotics are taking "a very short-sighted view", Sally commented. "Aside from their sense of social responsibility, these companies stand to lose if the modern treatments and procedures that are more lucrative for them become impossible because of infection risk. They need to get back in the business of R&D for new anti-infective medicine."

Misuse of antibiotics is also fuelling AMR. Around three quarters of all antibiotics are used on animals, and the food industry is widely reliant on them to prevent infections in livestock. Because animals excrete up to 90% of the antibiotics administered to them, sewage management plays a role too. To tackle AMR, there will need to be a shift towards the use of vaccines instead of antibiotics, along with a greater focus on cleanliness and infection management. 

Investing for change

AMR affects every bit of the economy and our lives, Sally argued, and investors are well placed to make a difference. Directors of pharmaceutical companies that refuse to invest in new treatments should be voted out, she said, but there is change to be made in industries beyond medicine too. "Start with fast food chains, supermarkets and intensive farming – how can we get these businesses to phase out their use of antibiotics?" Even children's book publishers have a role to play: "They should be treating AMR just as they do climate change – a serious and growing problem that young people need to know about."

As Special Envoy, Sally is working with the UN and its agencies on high-level policy, which she says has an important part to play. But ultimately, she says, as with climate change, "we need a civil movement, ideally led by young people, that creates a rallying cry for change."