Stichting Access to Medicine Foundation Annual Report 2018...New Indian Express, among others. Starting in February, the Foundation engaged with pharmaceutical companies and industry

Stichting Access to Medicine Foundation

Annual Report 2018

ACCESS TO MEDICINE FOUNDATIONNaritaweg 227A 1043 CB Amsterdam The Netherlands

CONTACTOn behalf of the Access to Medicine Foundation, please contact Damiano de Felice [email protected]+ 31 (0) 20 2153 535www.accesstomedicinefoundation.org

Stichting Access to Medicine Foundation – Annual Report 2018

3

Table of contents

Executive Board Report 5

Financial Statements 15Balance sheet as at 31 December 2018 (after appropriation of result) 16Statement of income and expenses for the year ended 31 December 2018 17 Notes to the Financial Statements 18 Independent auditor’s report 23 Our organisation 25


4


5

Executive Board Report


6

Executive Board Report

2018 was a successful year, with the Foundation launching the first Antimicrobial Resistance Benchmark and the 6th Access to Medicine Index, which together formed the backbone of our engagement streams in 2018. To drive change, we built awareness of our findings and metrics through a series of technical brief-ings for governments, as well as workshops and events with investors and execu-tive-level meetings with pharmaceutical companies. A new Director of Research has further strengthened the management of the research department and the Foundation team now totals 26 people. The Foundation and its research pro-grammes are independently funded through grants from four funders.

LAUNCHING THE FIRST ANTIMICROBIAL RESISTANCE BENCHMARK The year started with the publication in January of the 2018 Antimicrobial Resistance Benchmark, the first independent assessment of how pharmaceutical companies are responding to the global health threat posed by antimicrobial resist-ance (AMR). Antibiotics are losing their effectiveness at an increasing rate, acceler-ated mostly by their misuse in humans, animals and crops. Without effective antibi-otics and other antimicrobials, infections become more difficult to treat, and medi-cal and surgical procedures can become high-risk interventions.

The goal of the Antimicrobial Resistance Benchmark is to guide and incentiv-ise pharmaceutical companies to do more to tackle AMR. It highlights where good ideas for limiting AMR are being implemented and where action is still required. The main areas tracked are: research and development for new antimicrobials; respon-sible manufacturing of antibiotics; approaches for improving access to antimicrobi-als, and for ensuring they are marketed and used appropriately. It measures the 30 most active players in antimicrobial development and production and includes mul-tinational pharmaceutical companies, biotechnology firms and manufacturers of generic medicines.

In the 2018 Benchmark, GSK and Johnson & Johnson lead among the large research-based pharmaceutical companies, while Mylan leads the generic medicine manufacturers and Entasis leads in the biotechnology group. The Benchmark finds room for all companies to improve, as well as evidence of good practice.

The Benchmark evaluates companies only in the metrics that are relevant to their businesses. The radials compare how close companies are to achieving 100% of their maximum potential score.13 companies achieve over 50%.

of max. possible score.

Shionogi

Sano

�

Roche

P�zer

Novartis

Merck &

Co., Inc.

Johnson & Johnson

GSK

Research-based pharmaceutical companies met correcties 20/12


Aspen

Teva

Sun

Phar

ma

Mylan

Macleods

LupinFresenius Kabi

Dr. R

eddy

's

Cipla

Aurobindo

Generic medicine manufacturers


Achaogen

Wockhardt

Com

pany

The

Med

icine

s

Bioph

arm

a

Tetr

apha

se

Summ

it

PolyphorNabriva

Motif Bio

MGB

Melinta

Entasis

Cempra

Biopharmaceutical companies

● Research & Development ● Manufacturing & Production ● Appropriate Access & Stewardship ● Remaining potential score

8 LARGE RESEARCH - BASED

PHARMACEUTICAL COMPANIES 10 GENERIC MEDICINE MANUFACTURERS 12 BIOPHARMACEUTICAL COMPANIES

ANTIMICROBIAL RESISTANCE BENCHMARK 2018 – COMPANY PERFORMANCES


7

The 2018 Benchmark shows that companies are developing new antimicrobial med-icines, with 28 antibiotics in clinical development that target critical AMR priorities. It also fi nds four companies that are taking steps to separate sales agent’s bonuses from the volume of antibiotics they sell, a practice that can disincentivise oversell-ing. Eight companies are setting limits on the concentration of antibiotics in fac-tory wastewater released into the environment. Nearly half of companies evalu-ated are involved in eff orts to track patterns in drug resistance. This is important as curbing AMR depends on knowing which pathogens are developing resistance and where. The analysis shows that a third of antibiotics in companies’ portfolios are in the Watch group on the Model List of Essential Medicines from the World Health Organization (WHO), meaning companies must develop suitable access plans that are integrated with stewardship practices to limit misuse and overuse and predict emerging resistance trends.

The 2018 Benchmark was launched in a press conference at the Annual Meeting of the World Economic Forum (WEF) in Davos, Switzerland. Speaking at the press conference, Jayasree K. Iyer, Executive Director of the Foundation, warned that although the Benchmark had found more evidence of action than many experts expected, there are not enough new medicines being developed to replace the ones that are losing eff ectiveness.

The Benchmark was publically endorsed by many leading public fi gures in the AMR debate. Dame Sally Davies said: “This independent Antimicrobial Resistance Benchmark is a huge step forward and shines a light on the pharmaceutical indus-try’s progress in tackling drug-resistant infections. It can help pave the way for a transparent learning culture where best practice is shared, progress celebrated, and gaps where further work is needed are identifi ed.” Following its publication, the Benchmark was covered by global media, creating awareness of the fi ndings while making them tangible for their readers. It was covered in The New York Times, The Financial Times, The Guardian, Reuters, The BMJ, NOS, Science, Die Welt and The New Indian Express, among others.

Starting in February, the Foundation engaged with pharmaceutical companies and industry associations to discuss the Benchmark fi ndings and the potential for fur-ther action on AMR. The starting point was the opportunities for specifi c improve-ments identifi ed in each company’s Benchmark Report Card. During 2018, posi-tive changes have already taken place, including the uptake by at least one biophar-maceutical company of new stewardship plans, as well as public commitments to improve promotional practices. Following our discussions, the leadership of some companies have shown a marked change in their attitudes toward AMR.

The Foundation brought its fi ndings to many fora in 2018, bringing out the detail covered in its 200-page Benchmark report: including at the Prince Mahidol

The 2018 Antimicrobial Resistance Benchmark Press conference, WEF, Davos


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Awards Conference, at the UN Inter-Agency Coordination Group (IACG) on AMR, the High-Level Meeting on Universal Health Coverage jointly organised by the Asia-Europe Foundation (ASEF) and the Japanese government, the World AMR Congress, and a keynote address at the World Health Summit in Berlin. The Foundation also co-hosted an event with the Combating Antibiotic Resistant Bacteria Biopharmaceutical Accelerator (CARB-X) and Global Antibiotic Research & Development Partnership (GARDP) in Accra, Ghana, about the importance of starting early, during R&D, with the development of plans for stewardship and local access. It was a side-event of the 2nd Global Call to Action on Antimicrobial Resistance, which was co-hosted with the governments of Ghana and Thailand, and the United Nations Foundation, and organised in partnership with the IACG on AMR.

Starting in February, the research team carried out a review of the Benchmark methodology in preparation for the 2020 Benchmark. The review confirms the global health priorities regarding AMR and pharmaceutical companies’ role in halt-ing its rise, informed by a wide-ranging multi-stakeholder dialogue coordinated by the Foundation. Strategic guidance was provided by the Foundation’s Expert Committee (EC), an independent body of experts from, among others, WHO, gov-ernments, non-governmental organisations (NGOs), patient organisations, the indus-try, academia and investors. This led to adjustments to analytical scopes and the development of new measurements where needed. The methodology for the 2020 Benchmark will be published in 2019.

PUTTING FRAGILE ANTIBIOTIC SUPPLY ON THE AGENDA Antibiotics shortages are becoming more frequent and undermining basic access to antibiotics worldwide. Although not on the political agenda, the urgency of this topic became increasingly clear as we worked on the Benchmark. In order to jump-start the broader conversation about how pharmaceutical companies and other actors can take action, the Foundation published a white paper on the issue in May. The white paper pinpoints systemic factors that cause antibiotic shortages, iden-tifies actions companies are taking to secure antibiotic supply, and makes recom-mendations for governments, regulators and the pharmaceutical industry, among others. It was developed with advice from leading experts in supply chain manage-ment and the antibiotic market.

Antibiotic shortages are linked to AMR, as they mean doctors must resort to less optimal treatments. This makes infections harder to cure and creates opportunities for bacteria to adapt their defences. An estimated 70% of bacteria are already resistant to at least one antibiotic that is commonly used to treat them. As reported in the white paper, antibiotic supply is fragile for three main reasons: (1) the active ingredients are generally produced at only a few factories, so a single manufactur-ing failure has huge knock-on effects; (2) supply chains are complex, which leads to low visibility and accountability; and (3) fragile antibiotic supply gets little attention

Access to Medicine Foundation

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WHO CAN FIX SUPPLY?The rise of AMR – now a priority for the UN, the World Health Organization (WHO), G20 and G7 – brings new urgency to the problems posed by fragile antibiotic sup-ply. But which parties are in a position to strengthen those supply chains? Antibiotic supply chains are complex and highly interdependent. They involve a multitude of stakeholders, processes and resources needed to transform raw materials into high-quality medicines. Strengthening supply chains will depend on international coordination, commitment and collaboration between a broad range of stake-holder groups. This international effort will require strong action by governments, policymakers, regulators (such as the FDA and EMA, which regularly track short-ages), public health authorities, pharmacist associations, pharmaceutical companies and others. According to WHO, 90% of the world’s population now lives in a coun-try with a national action plan for AMR.17 Such plans typically include measures to address supply-chain stability. To track national shortages, WHO has developed a mechanism for the national reporting of stockouts.

Pharmaceutical companies clearly have a vested commercial interest to ensure supply chains are strong and reliable. They also have extensive experience, exper-tise and capacities in supply chain management and distribution. This gives them the power and responsibility to support the transfer of good practices and promis-ing innovation between supply chains and different actors.

Sub-Saharan Africa: syphilis is endemic here and

responsible for almost 20% of perinatal deaths.

Few API producers: BPG supply

now depends on only four API

manufacturers. With BPG offering

little profit, manufacturers tend to

keep production levels low. Such

a small number of manufacturers

can also increase the risk of

substandard medicines, as, in the

past, regulators have had to allow

poor-quality drugs on the market

to prevent shortages of life-

saving drugs.

● BPG shortage*

● No BPG shortage*

● No BPG data*

High syphilis rates**

API manufacturers for the

production of BPG

*Source: WHO. Shortages of benzathine penicillin. How big is the problem? And why it matters. 2017

**Syphilis endemic: Sub-Saharan AfricaSyphilis outbreaks declared: Brazil, AustraliaSyphilis on the rise: USA, Germany, UK, Netherlands, Spain and FranceHigh-level meeting on universal health coverage, Tokyo White paper on fragile antibiotic supply


9

on the global political stage, with little incentive for the pharmaceutical industry to take action on its own.

On publication, the Foundation shared the paper with the companies covered by our research programmes as well as with specific topic experts and the media. The paper was broadly covered including by: The Pharmaceutical Journal, the BBC, The Guardian, The Hindu, Forbes, Newsweek, NRC, Reuters and The Telegraph. Several companies are using this paper to prioritise this issue within their internal AMR strategies. The Foundation will continue to use this paper in its engagement with market shapers on AMR, governments and the pharmaceutical industry. Following discussions with experts, the Foundation strengthened specific measures of how pharmaceutical companies aim to secure antibiotic supply in the methodology for the upcoming 2020 AMR Benchmark report.

THE 6TH ACCESS TO MEDICINE INDEX The Foundation published the 6th Access to Medicine Index in November. The Index ranks 20 of the world’s largest pharmaceutical companies based on their efforts to address access to medicine, including in strategy, governance, R&D and pricing. By publicly recognising the best performers, it spurs companies to compete to be the best.

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GlaxoSmithKline plc

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Takeda Pharmaceutical Co. Ltd.

Novo Nordisk A/S

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Eisai Co. Ltd.

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P�zer Inc.

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Boehringer Ingelheim GmbH

Bristol-Myers Squibb Co.

Bayer AG

AbbVie Inc.

Daiichi Sankyo Co. Ltd.

Astellas Pharma Inc.

Eli Lilly & Co.

General Access to Medicine Management Market In�uence & Compliance Research & Development

Pricing, Manufacturing & Distribution Patents & Licensing Capacity Building Product Donations

rank 2016rank 2018

2018 ACCESS TO MEDICINE INDEX – OVERALL RANKING

General Access to Medicine Management

Market In�uence & Compliance

Research & Development

Pricing, Manufacturing & Distribution

Patents & Licensing

Capacity Building

Product Donations

The 2018 Access to Medicine Index Healthcare worker using telemedicine platform, Ghana


10

In 2018, the Index analyses how the companies are addressing access to medicine in 106 low- and middle-income countries for 77 diseases, conditions and pathogens. It used a tighter analytical framework of 69 indicators, targeting those areas where pharmaceutical companies have the greatest potential to make change.

The 2018 Index finds that the pharmaceutical industry continues to mature in its approach to access to medicine, with models for good practice in areas such as access planning and licensing. GSK retains its No. 1 position, as Novartis moves up into 2nd. Takeda rises furthest in 2018, jumping ten places to 5th. In R&D, most pro-jects targeting global health priorities (63%) are being conducted by just five com-panies. The majority of key on-patent products (70%) have access initiatives in place, but these are limited in reach. This cycle, the Index examined company efforts to increase access to cancer products for the first time: 57% of cancer products on the WHO EML have access initiatives attached, yet access plans are in place for just 5% of late-stage-candidate cancer products, compared with 54% for communicable disease pipeline products. In 2018, the Index identified 45 best and innovative prac-tices for improving access to medicine.

Data-collection, verification and analysis for the Index took place throughout the year, supported by a dedicated engagement stream for the pharmaceutical compa-nies evaluated in 2018. This stream included refresher calls on the data-collection process and provided a single point-of-contact for clarifying data requests and the rationales that underpin them. This stream built companies’ technical understand-ing of the methodology, as well as of how it can be translated into practical actions that can be built into companies’ access programmes. The Foundation supported this stream with a series of articles on specific areas of the Index methodology, covering: how sharing IP-assets can accelerate global health R&D (published with BioVentures for Global Health); how the Index identified R&D priorities (published in Health Research Policy and Systems); and how cancer was brought into the Index disease scope (published in Cancer Control 2018).

The Foundation organised three launch events specifically for investors about the 2018 Index, co-hosted with Goldman Sachs in London and New York, and with UBS in Tokyo. This year, these events included one-on-one meetings between inves-tors and companies in the scope of the Index, to discuss their Index performances. This is a unique platform for investors to speak bilaterally with companies about our results and the specific opportunities identified in their Report Cards. The events brought mainstream investors into the conversation, including from BlackRock, State Street and Lord Abbett. Together, the events drew more than 150 attendees, including buy-side healthcare sector analysts and ESG analysts.

The Foundation also held a series of policy and technical briefings with government representatives from Germany, Japan and Switzerland. These briefings informed

Investor meeting on the 2018 Access to Medicine Index, New York


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their policy making in view of their 2019 priorities, including AMR, emergency pre-paredness and non-communicable diseases (NCDs), for the G20, World Health Assembly, the 7th Tokyo International Conference on African Development (TICAD 7) and the UN General Assembly.

The Index was published on a new website, with improved capacity to search and fi lter in the best practices section, and a new comparison functionality in the report cards section. For the diff erent stakeholders that use the Index, these improve the fi ndability of insights into relevant diseases, countries and products, and the capac-ity to compare specifi c aspects of companies’ performances.

At publication, one fi nding generated particular interest in the media: that small groups of companies are carrying out the most activity in key areas. This fi nding was seen as a key cause for concern, and recognised by the pharmaceutical com-panies as a signal that more companies must shoulder the weight of the access challenge. The Index was covered in international titles including Die Zeit, Basler Zeitung, The Guardian, StatNews, Bloomberg, The Hindu and Devex.

ENGAGEMENT IN 2018 A core route for the Foundation to drive change is to interact with industry exec-utives and share our research and insights with them. Throughout 2018, the Foundation’s Executive Director had a series of strategic in-person meetings with executive and board-level leaders of pharmaceutical companies evaluated in its research programmes. These meetings covered specifi c opportunities for each company to improve, for example by embedding systematic access planning early in the R&D process, or conducting stewardship planning to curb AMR. These meetings send a strong signal across the entire company that addressing access or AMR is a priority for all departments/employees. In total, the Foundation held such meetings with 18 companies in 2018.

For the fi rst time, in 2018, the Foundation brought together CEO’s and board mem-bers of India-based pharmaceutical companies. India has the third largest pharma-ceutical industry in the world, with an annual turnover of over USD 20 billion. Many of the world’s major producers, especially of generic medicines, are located in India or have operations there. The strategies adopted by these companies will have a signifi cant impact on access to medicine and AMR globally. The high-level meeting took place in Mumbai and was organised by the Foundation. It covered strategies and best practices for improving access to medicine and addressing antimicrobial resistance (AMR) identifi ed through Foundation research.

Foundation spokespeople addressed experts in the access and AMR fi elds at key meetings and conferences in 2018, including at the WEF Annual Meeting in Davos, the 16th Biosimilar Medicines Conference in London, the 2018 World Health

World Health Summit, Berlin WEF panel on a new era for global health, Davos CEO panel on access and AMR, Mumbai Company event, Basel


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Summit in Berlin, at the WHO’s 71st World Health Assembly, and at the Global Conference on Primary Health Care (PHC) in Astana, Kazakhstan. Topics covered include the diff erent business models pharma companies are already using to reach poorer populations; the roles of diverse types of pharmaceutical companies in addressing access to cancer care in low- and middle-income countries; the impor-tance of biosimilars for improving access to cancer treatment; universal health cov-erage (UHC); antimicrobial resistance and the 2018 Benchmark fi ndings; and the role of pharmaceutical companies in improving access to quality and essential med-icines. The Foundation also jointly organised the fi rst ever WEF Women Leaders in Global Health event, bringing together expert panellists for a discussion on how best to scale up good practice in global health.

INVESTORSInvestors remain a key focus of the Foundation’s engagement activities. In 2018, the Foundation has increased the number of its signatory investors up from 66 in 2017 to a new high of 84, collectively managing assets of more than USD 11 trillion. These investors have committed to using the Index in their investment analysis and engagement with pharmaceutical companies. They include the fi rst Japanese sig-natories: Sumitomo Mitsui Trust Holdings, The Dai-ichi Life Insurance Company and Tokio Marine.

The Foundation’s investor engagement team held bilateral meetings with Top-10 holders of pharmaceutical companies covered by its research, including with BlackRock, Dodge & Cox, Lord Abbett and State Street. Foundation team mem-bers also spoke at investor events throughout the year, including all Responsible Investor conferences. We closed the year with series of launch events for investors about the 2018 Access to Medicine Index, co-hosted with Goldman Sachs and UBS, in London, New York City and Tokyo.

Reports, rankings and scores published by the Foundation are now available to investors across four major fi nancial data platforms: Bloomberg Terminal, FactSet, Refi nitiv Eikon, and S&P Global. Further, the Global Impact Investor Network (GIIN) now includes reports from the Foundation’s three research programmes in its Navigating Impact project, a new online resource centre specifi cally for impact investors.

Pharmaceutical companies are involved in many diff erent reporting streams, includ-ing a variety of ESG and sustainability initiatives. In 2018, the Foundation worked with the Sustainability Accounting Standards Board (SASB) to ensure a strong alignment between the Index indicators and the metrics of the fi nal SASB Standard for the Biotechnology and Pharmaceuticals Industry.

Investor panel on the 2018 Access to Medicine Index, London


13

ORGANISATIONAL DEVELOPMENT In 2018, the Foundation stabilised its growth and continued to invest in the research department and engagement teams. A new Director of Research, Gabrielle Breugelmans, has now come on board and is giving strategic guidance to all Foundation research activities. Further, the Foundation hired a Research Programme Manager for the AMR Benchmark. The Foundation had reached 26 people by the end of 2018, representing 14 nationalities. Regarding its internal pro-cesses, the Foundation became fully compliant with the new EU-wide General Data Protection Regulation (GDPR) per the May 25 deadline. Further, the Foundation successfully conducted a data-handling audit to stay abreast of developments in data security. In 2018, the Foundation began looking for a fifth member of its Supervisory Board, which currently consists of four members including the Chair.

FINANCIALSThe Foundation ended 2018 with a positive net result of EUR 88,691. The equity position of the Foundation at the end of the year is EUR 186,381 (positive equity). The Foundation’s income in 2018 was EUR 2.6 million. Total expenses were EUR 2.5 million. The most significant variances between actuals and budget are in the fol-lowing categories.

Income/deferred income: Several activities planned for 2018 will take place in 2019, including outreach activities following the launch of the 2018 Access to Medicine Index, finalisation of the Antimicrobial Resistance Benchmark methodol-ogy and engagement activities with companies and stakeholders. This means that income has been deferred to 2019.

Salaries: The budget included new positions to strengthen research, investor engagement, company engagement and communications capacities. Due to lat-er-than-expected grant approvals, the Foundation has taken a prudent approach with hiring new staff.

Travel expenses: The Foundation kept costs low by planning its trips as early as possible, and using the travel budget conservatively. Some trips planned for 2018 will take place in 2019.

Consultants and similar expenses: The Access to Medicine Foundation limited the use of external consultants, for instance, in terms of strategic support and exter-nal research. Also several activities planned for 2018 have been postponed to 2019, including finalisation of the Antimicrobial Resistance Benchmark methodology and outreach and engagement activities with companies and stakeholders.

Supplies and similar expenses: The Access to Medicine Foundation has limited the use of sub-contractors by ensuring that certain activities, for example the

Foundation office: interviews, workshops and meetings, Amsterdam


14

data-collection system, are now carried out entirely in-house.

CONTINUITYIn 2018, the Foundation signed a new five-year grant agreement with the Dutch Ministry of Foreign Affairs and a five-year grant extension with the Bill & Melinda Gates Foundation. During the year, the Foundation received grant instalments from the UK Department for International Development, the Bill & Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs and the Dutch Ministry of Health, Welfare and Sport.

In 2019, the UK Department for International Development, the Bill & Melinda Gates Foundation, the Dutch Ministry of Foreign Affairs and the Dutch Ministry of Health, Welfare and Sport will continue to support the Foundation. The Dutch Ministry of Health, Welfare and Sport formally approved a budget-neutral extension of the cur-rent grant to perform in 2019 some activities that were originally planned for 2018. The Foundation will apply for the renewal of this grant in the first half of 2019. The Foundation is also pursuing additional funding streams to ensure that the level of funding in 2019 and beyond can meet the Foundation’s goals and mandate.

OUTLOOK 2019 offers a moment of reflection and we will be setting the stage for the years to come. Throughout the year, our engagement streams will use our insights to accel-erate the uptake of good practices across the industry. This year, the Foundation will publish its first-ever ten-year analysis of how the pharmaceutical indus-try has performed on global health goals. We will use the conclusions of this pro-gress report to show what still needs to be done and to inspire new commitments to improving health through innovation and healthcare delivery. In tandem, we will prepare the second AMR Benchmark, which will analyse progress on AMR by key pharmaceutical companies. Working toward the next Access to Medicine Index, the Foundation will review the Index methodology. To close the gaps that remain on access to medicine, a greater diversity of pharmaceutical companies must get involved and stay engaged for the long haul.

Amsterdam, 19 March, 2019

Stichting Access to Medicine FoundationThe Executive Board

Jayasree K. IyerExecutive Director


15

Financial Statements


16

31 December 2018 31 December 2017

Note EUR EUR EUR EURASSETS Non-current assets

Property, plant and equipment 4 28,594 27,885

Financial fixed assets 5 22,436 22,436

Current assets

Receivables, prepayments and accrued income 6 70,990 339,886

Cash and cash equivalents 7 1,713,537 1,049,460

1,835,557 1,439,667

EQUIT Y AND LIABILITIES

Equity

General reserve 8 186,381 97,690

Current liabilities 9

Accounts payables 80,324 11,698

Taxes and social security contributions 10 53,587 34,255

Deferred income 11 1,260,495 1,090,000

Other debts and accruals 12 254,770 206,024

1,649,176 1,341,977

1,835,557 1,439,667

Balance Sheet as at December 31, 2018(after appropriation of result)


17

Budget 2018 Results 2018 Results 2017

Note EUR EUR EURINCOME Grants and subsidies 14 3,229,844 2,554,268 2,093,356

Financial income 15 - 140 1,102

Exchange difference 16 - 4,844 -5,717

Total income 3,229,844 2,559,252 2,088,741

EXPENSES Salaries and wages 17 1,834,541 1,496,490 1,147,976

Social security and pension contributions 18 287,748 273,223 200,522

Other personnel expenses 19 107,708 80,195 68,362

Depreciation of plant, property and equipment 19,950 17,909 15,505

Book loss disposals - 300 1,028

Travel expenses 191,625 145,756 102,265

Financial expenses 1,260 1,232 1,005

Housing expenses 20 105,525 99,227 96,030

Consultants and similar expenses 21 503,372 286,844 266,674

Supplies and similar expenses 22 122,436 69,385 96,210

Total expenses 3,174,166 2,470,561 1,995,577

Net result 55,678 88,691 93,164

Distribution of net result

Addition to general reserve 88,691 93,164

Statement of Income and Expensesfor the year ended December 31, 2018


18

Notes to the Financial Statements

1 . GENERAL INFORMATION

1.1 Activities Stichting Access to Medicine Foundation (the ‘Foundation’), with a statutory seat

in Haarlem, the Netherlands, is a foundation (‘stichting’) incorporated accord-ing to Dutch law. The Foundation’s registered office is Naritaweg 227-A, 1043 CB Amsterdam. The Foundation is registered with the Chamber of Commerce under number 34185938.

The Access to Medicine Foundation is primarily involved in the promotion of access to health care (in the widest sense) and, in particular, to encourage the pharma-ceutical industry to accept a larger role regarding access to medicine in low- and middle-income countries. To achieve this, the Foundation develops and publishes the Access to Medicine Index, the Access to Vaccines Index and the Antimicrobial Resistance Benchmark.

The Foundation was established on February 5, 2003 and its first accounting period ended on December 31, 2003. Thereafter, the Foundation has reported its figures on a calendar-year basis (12 months). The current reporting period covers the period from January 1 to December 31, 2018.

1.2 Going concern The equity of the Foundation amounts to EUR 186,381 as at December 31, 2018.

The budget for the next year is for a major part already covered by grant agree-ments with the UK Department for International Development, the Dutch Ministry of Foreign Affairs and the Bill & Melinda Gates Foundation. With respect to the Dutch Ministry of Health, Welfare and Sport, the Foundation has received a for-mal approval of a six-month budget-neutral extension of the current funding agree-ment, which allows the Foundation to perform some activities in 2019, by deferring part of the funding from 2018 to 2019. The Foundation is also in consultation with the Dutch Ministry of Health, Welfare and Sport about the renewal of the current funding agreement (extending the grant at least until 2020).

The continuity of the Foundation depends to a significant extent on the willingness of funding organisations to continue these financing facilities. On this basis, the accounting principles applied to the valuation of assets and liabilities and the deter-mination of results in these financial statements are based on the assumption of continuity of the Foundation.

1.3 Estimates In applying the principles and policies for drawing up the financial statements, the

management of the Foundation sometimes needs to make estimates and judg-ments that may be essential to the amounts disclosed in the financial statements. To provide the transparency required under Book 2, article 362, paragraph 1 of the Dutch Civil Code, the nature of these estimates and judgments, including related assumptions, is disclosed where necessary in the notes to the relevant financial statement item.


19

2 ACCOUNTING POLICIES FOR THE BALANCE SHEET

2.1 General information The financial statements have been prepared in accordance with the Guideline for

Annual Reporting 640 ‘Non-profit Institutions’ of the Dutch Accounting Standards Board.

Assets and liabilities are generally valued at historical cost or at fair value at the time of acquisition. If no specific valuation principle has been stated, valuation is at historical cost. In the balance sheet, statement of income and expenses, refer-ences are made to the notes.

2.2 Prior-year comparison The accounting policies have been consistently applied to all the years presented.

2.3 Foreign currencies

2.3.1 Functional currency The financial statements are presented in Euros (€), which is the functional and

presentation currency of the Foundation.

2.3.2 Transactions, assets and liabilities Foreign currency transactions in the reporting period are translated into the func-

tional currency using the exchange rates prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated

into the functional currency at the rate of exchange prevailing on the balance sheet date (31 December 2018: 0.8969 GBP = 1 EUR; 31 December 2017: 0.8863 GBP = 1 EUR). Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates are recognised in the income statement.

Translation differences on non-monetary assets held at cost are recognised using

the exchange rates prevailing on the dates of the transactions.

2.4 Property, plant and equipment Property, plant and equipment are stated at historical cost plus expenditure that

is directly attributable to the acquisition of the items, less straight-line deprecia-tion over their estimated future useful lives. Allowance is made for any impairment losses expected on the balance sheet date.

2.5 Financial fixed assets Financial fixed assets like deposits are valued at historical cost. Impairment losses

are deducted from amortised cost and expensed in the income statement.

2.6 Receivables Trade receivables are recognised initially at fair value and subsequently measured

at amortised cost. If payment of the receivable is postponed under an extended payment deadline, fair value is measured on the basis of the discounted value of the expected revenues. Interest gains are recognised using the effective interest method. When a trade receivable is uncollectible, it is written off against the allow-ance account for trade receivables.


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2.7 Cash and cash equivalents Cash and cash equivalents include cash in hand, bank balances and deposits held at

call with maturities of less than 12 months. Bank overdrafts are shown within bor-rowings in current liabilities on the balance sheet. Cash and cash equivalents are valued at nominal value.

2.8 Current liabilities and deferred income

Liabilities are initially recognised at fair value, net of transaction costs incurred. Liabilities are subsequently stated at amortised cost, being the amount received taking into account any premium or discount, less transaction costs.

Any difference between the proceeds (net of transaction costs) and the redemp-tion value is recognised as interest in the income statement over the period of the borrowings using the effective interest method.

All donor payments received by the Access to Medicine Foundation for activities that have not been performed yet are presented as ‘deferred income’ under current liabilities.

3 ACCOUNTING POLICIES FOR THE INCOME STATEMENT

3.1 General information The result is determined as the difference between total income and total

expenses. Income and expenses are recognised in the income statement in the period that they are realised.

3.2 Grants and subsidies Grants and subsidies are recognised as income when there is reasonable assurance

that they will be received and that the Foundation will comply with the conditions associated with these contributions. Grants and subsidies that compensate the Foundation for expenses incurred are recognised as income on a systematic basis in the same periods in which the expenses are recognised.

3.3 Financial income Interest income is recognised on a time-weighted basis, taking into account the

effective interest rate of the assets concerned.

3.4 Exchange differences Exchange differences arising upon the settlement or conversion of monetary items

are recognised in the income statement in the period that they arise.

3.5 Expenses Development costs for the Access to Medicine Index, the Access to Vaccines Index

and the Antimicrobial Resistance Benchmark are recognised as expenses, since no future benefits are expected.

The Foundation is the owner of the intellectual property rights of the Access to Medicine Index, the Access to Vaccines Index and the Antimicrobial Resistance Benchmark. These rights are internally developed and on that basis not capitalised (in accordance with Dutch law).

3.6 Employee benefits Salaries, wages and social security contributions are reported on the income state-

ment based on the terms of employment, where they are due to employees.


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3.7 DepreciationProperty, plant and equipment are depreciated over their estimated useful lives from the inception of their use. Future depreciation is adjusted if there is a change in estimated future useful life.

3.8 Financial expensesInterest paid is recognised on a time-weighted basis, taking into account the effec-tive interest rate of the liabilities concerned. When recognising interest paid, allow-ance is made for transaction costs on loans received as part of the calculation of effective interest.

3.9 TaxesThe Foundation is exempt from both income taxes and VAT. For services purchased outside of the EU yet consumed in the Netherlands, the reverse charge mechanism applies. The Foundation must then self-assess and pay VAT on these services.

4 MANAGEMENT REMUNERATION

During the reporting period, the Foundation paid EUR 157,986 as remuneration for the Executive Director (2017: EUR 155,505). Members of the Supervisory Board of the Foundation are not remunerated.

Amsterdam, 19 March, 2019Stichting Access to Medicine Foundation

The Executive Board


The Supervisory Board

John Schaetzl Wilfred GriekspoorChairman Member of the Supervisory Board

Hans V. Hogerzeil Joelle Tanguy Member of the Supervisory Board Member of the Supervisory Board

Results 2018 Results 2017

EUR EUR

Gross wage salary (including vacation allowance)

141,138 141,135

Social charges 10,661 9,902

Pension charges 6,187 4,468

157,986 155,505


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INDEPENDENT AUDITOR’S REPORT

To: the Board of Stichting Access to Medicine Foundation

Our opinion The summary of the audited financial statements 2018 of Stichting Access to Medicine Foundation based in Haarlem is derived from the audited financial statements 2018 of Stichting Access to

Medicine Foundation.

In our opinion the accompanying summary of the audited financial statements are consistent, in all material respects, with the audited financial statements 2018, on the basis described in the notes and in accordance with the accounting policies and other explanatory information that are adopted

in de audited financial statements of Stichting Access to Medicine Foundation for the year ended 31 December 2018. The summary financial statement are in accordance with the Guideline for annual

reporting 640 “Not-for-profit organisations” of the Dutch Accounting Standards Board.

Summary of the audited financial statements The accompanying summary financial statements do not contain all the disclosures required by the Guideline for annual reporting 640 “Not-for-profit organisations” of the Dutch Accounting Standards Board. Reading the summary of the audited financial statements and our report thereon, therefore, is not a substitute for reading the audited financial statements of Stichting Access to Medicine

Foundation and our auditor’s report thereon. The summary of the audited financial statements and the audited financial statements do not reflect the effects of events that occurred subsequent to the date of our auditor’s report on those financial statements of 22 March, 2018.

Responsibilities of management and the supervisory board for the summary financial statements

Management is responsible for the preparation of the summary of the audited financial statements on the basis as described in the notes of the related explanatory notes.

The supervisory board is responsible for overseeing the company’s financial reporting process.

Our responsibilities Our responsibility is to express an opinion on whether the summary of the audited financial

statements are consistent, in all material respects, with the audited financial statements based on our procedures, which we conducted in accordance with Dutch law, including the Dutch Standard 810 ‘Opdrachten om te rapporteren betreffende samengevatte financiële overzichten’ (Engagements to report on summary financial statements).

Report on other legal and regulatory requirements

Pursuant to the Guideline for annual reporting 640 “Not-for-profit organisations” of the Dutch Accounting Standards Board, we report, to the extent of our competence, that the executive board report (as set out on pages 5 until 14) is consistent with the financial statements as required by the Guideline for annual reporting 640 “Not-for-profit organisations” of the Dutch Accounting Standards Board.

Bloemendaal, 21 March, 2019

JPA Van Noort Gassler & Co B.V.

Original signed by

R. van Dijck MSc RA

Chartered public accountant

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24


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MANAGEMENT TEAM

FOUNDATION

Gabriëlle BreugelmansDirector of Research

Damiano de FeliceDirector of Strategy

Suzanne WolfDirector of Communications

John SchaetzlChair of the Supervisory Board

Wilfred GriekspoorMember of the Supervisory Board

Hans HogerzeilMember of the Supervisory Board

Joelle TanguyMember of the Supervisory Board

SUPERVISORY BOARD

EXECUTIVE DIRECTOR

Our organisation on 31 December 2018


There are 26 people working at the Access to Medicine Foundation, dedicated to stimulating and guiding pharmaceutical companies to do more for people living in low- and middle-income countries without access to medicine. They work across diverse research, engagement, strategy, communications and support teams.


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DisclaimerThe report is intended to be for information purposes only and is not intended as promo-tional material in any respect. The material is not intended as an offer or solicitation for the pur-chase or sale of any financial instrument. The report is not intended to provide accounting, legal or tax advice or investment recommendations. Whilst based on information believed to be relia-ble, no guarantee can be given that it is accurate or complete.

Photo DisclaimerThe Access to Medicine Foundation gratefully respects the permission granted to reproduce the copyright material in this report. Every reasonable effort has been made to trace copyright holders and to obtain their permission for the use of copy-right material. Should you believe that any content in this report does infringe any rights you may pos-sess, please contact us at [email protected] or + 31 (0) 20 21 53 535.

CopyrightNo part of this report may be reproduced in any manner without the written permission of the Access to Medicine Foundation. The information herein has been obtained from sources which we believe to be reliable, but we do not guarantee its accuracy or completeness. All opinions expressed herein are subject to change without notice. © 2019 Access to Medicine Foundation - All rights reserved

Photo credits Patricia Wolf (Organisation photos)

DesignExplanation Design, Netherlands


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The Access to Medicine Foundation is independently funded by the

UK Department for International Development, the Bill & Melinda

Gates Foundation, the Dutch Ministry of Foreign Aff airs and the

Dutch Ministry of Health, Welfare and Sport.

Documents

Stichting Access to Medicine Foundation Annual Report 2018...New Indian Express, among others. Starting in February, the Foundation engaged with pharmaceutical companies and industry