Currently, there seem to be three key ingredients for a successful pharmaceutical or health care company: innovation, research and development, and distribution, according to Julie Dickson, an investment director at Capital Group in London; “COVID shone a light on exactly how those three elements now often come together quickly in today’s healthcare sector,” she said.

A decade or two ago, it might have taken 10, 15, or even 20 years before a COVID vaccine could be developed and shipped, but thanks to technological leaps in part funded by global investors, this timeframe has shrunk to less than a year. This is part of a wider trend, Ms Dickson pointed out. “The number of major drugs delivered between 2007 and 2016 was 29, but in the last four or five years we have seen 51 emerge,” she said.

This innovation is coming just in time, as global healthcare systems are coming under strain from aging populations who are increasingly expectant of receiving treatments for a growing list of conditions. “From obesity to diabetes, cystic fibrosis, heart conditions, the sweep is very broad,” she said. “These are exciting times for researchers making life saving and life enhancing breakthroughs, with financial investors increasingly required to fund these innovations.”

COVID also broke new grounds when billions became used to the concept of self-diagnosis; a process that was unfamiliar to most before the pandemic. Ms Dickson discusses the implications of this for the healthcare industry, medical practitioners, and, by extension, investors.

This episode is part of the second season of the “Investing for the long term” podcasts series featuring Capital Group. These monthly podcasts, produced and hosted by Delano and Paperjam, explain some of the key challenges investors are facing and the investment opportunities related to those challenges.

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