Soapbox Snippets February 2025
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Article Type
The Wider Lens
Topics
Responsible Investing, Opinion
Published
February 14, 2025
Read time
4 mins
Author
Aegon AM Responsible Investment Specialists
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FDA's New AI Guidelines for Healthcare

AI advancements have the potential to transform biomedicine and healthcare. While other technological breakthroughs, such as telemedicine and digital health tools, have significantly impacted the sector, the competence of AI in data analysis, diagnostics and personalised care is likely to be revolutionary.

 

However, the use of AI in medicine brings unique regulatory challenges, including questions of liability. Errors within AI models could cause harm to patients, raising concerns about accountability. This is just one of many ethical issues to consider.

 

To address these challenges, the Food and Drug Administration (FDA) has released two new draft guidelines to manage the use of AI in drug and medical device development. The first guideline focuses on using AI to support regulatory decisions for drugs and biological products, providing a framework for evaluating AI models to ensure they are dependable and safe. The second guideline is aimed at AI-enabled medical devices, offering advice on their development and marketing. It emphasises the importance of transparency and strategies to manage the risks associated with AI.

 

Given the risk of AI outpacing regulatory frameworks, continuous updates and adaptations of regulations will be necessary to ensure AI systems remain safe and effective.

 

 

Global Banks to Cut 200,000 Jobs Due to AI Advancements

Global banks are set to cut up to 200,000 jobs over the next three to five years as AI continues to transform the financial sector. A recent Bloomberg Intelligence (BI) survey reveals that chief information and technology officers anticipate an average workforce reduction of 3%, with a quarter of respondents predicting cuts as steep as 10%.

 

The job cuts are expected to impact back office, middle office, and operations roles the most, with customer service positions also at risk due to the rise of AI-powered bots. Despite the significant job losses, AI is projected to enhance productivity and revenue, potentially adding $180 billion to banks' pretax profits by 2027.

 

These changes underscore the growing impact of AI on the banking industry, as institutions seek to leverage technology to streamline operations and improve efficiency. However, there are crucial ways companies can support their workers through this transition, such as investing in training programs to upskill and reskill employees where possible.

 

 

The beginning of the end for the opioid crisis?

 The Food and Drug Administration (FDA) has approved Journavx, developed by Vertex Pharmaceuticals, for short-term pain management following surgeries or injuries. This marks the first approval of a pain drug with a novel mechanism in over 20 years. Unlike opioids, which act directly on the brain to block pain and triggerthe brain's reward centres, potentially leading to addiction, Journavx works by blocking pain signals at their origin before they reach the brain.

 

The opioid crisis remains a significant public health challenge in the United States. According to Vertex, around 80 million patients in the U.S. are prescribed medication for moderate to severe acute pain each year. In 2022, opioid overdose deaths reached a new peak of 81,806, whilst lawsuits against drug manufacturer, distributors, and pharmacies have resulted in nearly $50 billion awarded to state and local governments to support treatment programmes and prevention efforts.  Researchers and pain specialists have hailed this approval as a major step forward in reducing opioid dependency. The success of Journavx underscores the importance of continued innovation in pain management to provide effective and safer alternatives for patients.

 

 

Climate Risks Spike US Insurance Premiums

 Extreme weather events—such as California's devastating wildfires and a rare snowstorm in the South—are transforming the U.S. insurance markets, leading to higher costs for homeowners.

 

There is a strong correlation between rising insurance premiums and counties most at risk from the climate crisis. Those in the top fifth for climate- related disaster risk saw home premiums leap by 22% in just three years to 2023, compared to an overall average increase of 13% in real terms. Florida is a prime example, with average home insurance costs soaring to around $9,000 per year due to its high vulnerability to severe weather. More than a dozen insurers have left the state over the past few years, further exacerbating the crisis and making it even more challenging for residents to find affordable home insurance.

 

 As the climate crisis intensifies, the struggle for affordable home insurance is becoming a stark reality for many Americans, highlighting the urgent need for comprehensive climate action and resilient infrastructure.

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Author

Aegon AM Responsible Investment Specialists
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