Given USS's considerable exposure to the pharmaceutical sector, the fund has looked at the investment implications of potential threats and opportunities facing the industry for a number of years, both internally and through collaborative engagement projects with other institutional investors.
Pharma Futures
Pharma Futures is a multi- year investor-led dialogue that explores how to better align corporate profitability with improved access to innovative and affordable healthcare in a rapidly changing operating environment to deliver long-term value to shareholders. Dialogue takes place in working groups comprised of asset owners, sell and buy side analysts and senior pharmaceutical executives, and interviews with external experts.
Pharma Futures was originally convened and sponsored by USS, with Dutch pension fund ABP, and US pension fund OPERS. It has run from 2003 - 2008 in three distinct phases.
Pharma Futures 3 explores the links between sustainable pharmaceutical business models and improved health outcomes in middle-income markets, including China, India and Brazil. It tackles the twin challenges of expanding access to medicines in these markets without undermining profitability for the industry. See Emerging Opportunities.
Pharma Futures 2 moved from hypothetical futures to explore real-world challenges, concluding that three key value drivers will determine the industry’s future value: R&D landscape, value for money and emerging markets. See Prescription for Long-Term Value.
Pharma Futures 1 was a scenario-planning exercise undertaken by the pharmaceutical industry and its investors, which identified three plausible futures, each of which represented significant change for the industry. The project looked at many extra-financial aspects affecting the industry including leadership and governance, trust and reputation management and communication. See The Pharmaceutical Sector: A Long-Term Value Outlook.
Pharma Futures- full report Pharma Futures – Emerging Opportunities, February 2009
Pharma Futures - executive summary Prescription for Long-Term Value June 2007
Pharma Futures - full report Prescription for Long-Term Value June 2007
Pharma Futures - press release Institutional Investors Report on the health of the pharma sector June 2007
Pharma Futures - the pharmaceutical sector A long-term value outlook Dec 2004
Pharma Futures PR launch Troubled future for pharmaceutical industry New joint industry-investor project says fundamental change is inevitable Dec 2004
More information about the work of Pharma Futures can be found at www.pharmafutures.org
Pharmaceutical Shareowners Forum (formerly PSG)
The Fund co-convened the Pharmaceutical Shareowners Forum in 2007 - an informal discussion forum for institutional investors and asset owners to keep up to date with developments inthe sector, particularly those linked to environmental, social and governance performance. The PSF follows on from the Pharmaceutical Shareowners Group which USS helped to create in 2003. The group has met with a number of pharmaceutical companies and organisations such as the UK Department for International Development.
Pharmaceutical Shareowners Group - PSG press release Sept 2004
Pharmaceutical Shareowners Group - PSG summary report Sept 2004
Pharmaceutical Shareowners Group - PSG report Sept 2004
Remuneration Paper for Pharma sector
In 2004 USS prepared a discussion paper Creating An Appropriate Remuneration Culture for the Pharmaceutical Sector to encourage pharmaceutical companies to amend their incentive structures in order to encourage more of a focus on innovation and a longer-term strategy to create and preserve durable shareholder value.