GlaxoSmithKline plc Is Best In Class When It Comes To Affordable Medicine

GlaxoSmithKline plc (LON: GSK) is leading the world in the development of affordable medicine.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Big pharmaceutical companies like GlaxoSmithKline (LSE: GSK) (NYSE: GSK.US) have a reputation for developing costly medicines with fat profit margins, a reputation that has attracted a lot of negative attention over the years.  

However, big pharma is now seeking to change this image. The development of low-cost affordable medicines is becoming a priority for many pharmaceutical companies. Glaxo is leading the group.

The best of breed

The Access to Medicine organisation has developed an index that is used as a barometer, to show how big pharma is approaching and dealing with challenges brought about by medical conditions of the developing world. Assessing the quality and availability of affordable care in the developing world is an extremely important trend to monitor in many respects. 

Should you invest £1,000 in Polymetal right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Polymetal made the list?

See the 6 stocks

Indeed, the majority of the world’s population lives within the developing world, and many low-income families struggle to get access to basic healthcare. What’s more, it makes perfect business sense to appeal to this market — while margins will fall, sales will explode. 

Glaxo topped the annual Access to Medicine Index for the fourth consecutive time this year, despite the company’s high-profile corruption scandal in China. It’s the company’s work outside of China that’s really attracting attention.

For example, the company has introduced a tired pricing model around the world, based on each countries’ ability to pay. Moreover, Glaxo is rapidly closing in on producing the world’s first malaria vaccine, after filing for regulatory approval in July. While the invention of a malaria vaccine is itself a ground breaking development, Glaxo isn’t actually going to make any money from the production of the vaccine. Management has declared that the malaria vaccine will be sold at only 5% above cost, with all profits reinvested into research and development for other tropical diseases. 

Novo NordiskJohnson & Johnson and Novartis all rank below Glaxo in the Access to Medicine index.

Economic sense 

They say money isn’t everything, and Glaxo’s efforts to become a respectable global corporate citizen are commendable — but will these efforts affect shareholders? 

Well, in business reputation counts for a lot, and Glaxo’s reputation as a leading light in the production and development of affordable medicine has got the company out of some sticky situations. Specifically, when Glaxo was found guilty of bribing doctors within China earlier this year, the company’s punishment — a fine of $490m — was given alongside a guarantee from management that the company would help the development China’s healthcare infrastructure.  

Additionally, the good publicity surrounding Glaxo’s charitable actions is invaluable. On the business side of things, with billions of potential customers located within the developing world, Glaxo’s presence and reputation will draw customers towards it.

With billions of potential customers and huge economies of scale, Glaxo’s charitable actions now are bound to pay off in the future. This makes Glaxo the perfect long-term investment for me, and that hefty 5.4% dividend yield cannot be ignored.

Should you buy Polymetal now?

Don’t make any big decisions yet.

Because Mark Rogers — The Motley Fool UK’s Director of Investing — has revealed 5 Shares for the Future of Energy.

And he believes they could bring spectacular returns over the next decade.

Since the war in Ukraine, nations everywhere are scrambling for energy independence, he says. Meanwhile, they’re hellbent on achieving net zero emissions. No guarantees, but history shows...

When such enormous changes hit a big industry, informed investors can potentially get rich.

So, with his new report, Mark’s aiming to put more investors in this enviable position.

Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!

Grab your FREE Energy recommendation now

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves owns shares of GlaxoSmithKline. The Motley Fool UK has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

DIVIDEND YIELD text written on a notebook with chart
Investing Articles

The dividend yield on this FTSE 100 stock has jumped 50% in a year. Time to buy?

Jon Smith explains why the yield on a FTSE 100 share has risen sharply over the past year but details…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

AstraZeneca’s share price is down 20% from September, so is it time for me to buy?

AstraZeneca’s share price has fallen a long way this year, which could mean a bargain to be had, so I…

Read more »

Man smiling and working on laptop
Investing Articles

2 top gold ETFs to consider in May!

Buying a gold exchange traded fund this month is a great idea to consider as the precious metal targets new…

Read more »

Middle aged businesswoman using laptop while working from home
Investing Articles

3 dirt cheap FTSE 250 shares for May

I think these FTSE 250 shares could be among the London stock market's best bargains to consider following recent turbulence.

Read more »

Portrait Of Senior Couple Climbing Hill On Hike Through Countryside In Lake District UK Together
Investing Articles

£500 to invest in an ISA each month? Here’s how to target a potential £60k+ second income!

A regular monthly investment in a Stocks and Shares ISA could build a huge passive income in retirement. Let me…

Read more »

Departure & Arrival sign, representing selling and buying in a portfolio
Investing Articles

£10,000 invested in Jet2 shares 1 year ago is now worth…

Jet2 shares jumped on Tuesday 29 April after a positive trading report boosted investor sentiment. Dr James Fox explores his…

Read more »

UK financial background: share prices and stock graph overlaid on an image of the Union Jack
Investing Articles

£10,000 invested in BT shares 5 years ago is now worth…

BT shares have shone over the past 12 months, and that’s a little painful for me to say, having touted…

Read more »

Businessman hand stacking up arrow on wooden block cubes
Investing Articles

I think this could be the best investment opportunity on the FTSE 100

Like many FTSE 100 stocks, this one has been through the mill in 2025. However, it hasn’t recovered, potentially offering…

Read more »