Swiss multinational pharmaceutical firm Novartis has priced a 1.85 billion euro (US$2.18 billion) sustainability-linked bond (SLB), reinforcing its commitment to environmental, social and governance (ESG) principles.

The new bond is the first of its kind in the healthcare industry and the first SLB incorporating social targets, with bondholders entitled to receive a higher amount of interest if the company fails to meet its targets for expanding access to its innovative medicines and addressing key global health challenges, Novartis said in a statement.

Under its 2025 Patient Access Targets, the drug firm aims to increase patient reach in low- and middle-income countries (LMICs) with its strategic innovative therapies by at least 200% by 2025. It is also taking steps to improve access to its global health flagship programmes in leprosy, malaria, Chagas disease and sickle cell disease by at least 50% over the same period. Novartis estimates achievement of these targets will result in a potential reach of over 24 million patients across therapy areas.

Globally, approximately two billion people have no access to basic medicines and healthcare, while 100 million people are impoverished by medical expenses each year. Weak healthcare systems in LMICs also hinder timely diagnosis and treatment.

“For decades, Novartis has worked to improve access to medicines and tackle global health challenges. We’re currently working to support global health efforts to address diseases like malaria and leprosy, to continue novel research into tropical diseases, and to ensure access to our new medicines in low- and middle-income countries,” says chief executive officer Vas Narasimhan. “Today’s announcement is another important step on our journey to integrate ESG into the core of our business, measure our progress, hold ourselves accountable, and demonstrate our dedication to making good on our promise to broaden global access to our medicines.”

Novartis says it has obtained two separate second-party opinions that validate the robustness and relevance of its KPIs and targets. The first one is from the Access to Medicine Foundation, an independent non-profit organization focused on access to medicine in LMICs, on the social benefits of the 2025 Patient Access Targets. The second opinion is from Sustainalytics, a consultancy with recognized ESG expertise, on the social benefits of the 2025 Patient Access Targets and on the alignment of the SLB to the Sustainability-linked Bond Principles, published by the International Capital Markets Association.