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Analysis

Wales struggles to tackle Covid surge as public confidence slumps

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Top of the UK table for coronavirus deaths and bottom for vaccination rates, Wales is finding the latest surge in infections far trickier than the first.

The devolved government’s approach to containing the pandemic in 2020 with regular lockdowns and an effective locally run tracing system won it plaudits. But first minister Mark Drakeford has come under increasing criticism on two fronts.

In December he delayed a full-scale lockdown even though the new variant was rampaging across England, and appeared to admit this week to conserving stocks of vaccine to prevent a stop-start rollout rather than deploy it as fast as possible.

Wales has highest Covid-19 death rate of home nations. Chart showing daily deaths with Covid-19 on death certificate, per million people, by date of death

“I would give [the government] an A- or B+” for their handling of the pandemic, said Ceri Phillips, emeritus professor of health economics at Swansea university. But he said the “umbilical cord” with England meant Wales’s case numbers would inevitably closely track its larger neighbour. And given that the Welsh are older and sicker than the English, higher deaths were sure to follow. “Proportionately more die of flu every year in Wales than England,” he said.

Cases have remained stubbornly high in pockets, including former mining areas of the south Wales valleys and the industrial north-east belt by the English border.

In common with the rest of the UK, deprived communities have been hit hardest. People live close together, often cannot work from home, and cannot afford to self isolate, said Prof Phillips. 

Wales’ test and trace system has performed far better than England’s, rarely dipping below a 90 per cent success rate in reaching contacts of positive cases.

Wales has a higher mortality rate than the UK average. Chart showing Age specific mortality rate (% of people of this sex & age who died at that age between 2017 and 2019)

The nation of 3.2m people has had its own government in Cardiff since 1999, with responsibility for health, and its different approach — on several occasions banning travellers from England — has raised Mr Drakeford’s profile.

A former lecturer and policy adviser with a strong grasp of detail who has held office since 2018, the pandemic has played to his strengths. But as an anti-independence Labour politician he was initially happy to follow London’s lead, said Richard Wyn Jones, director of the Wales Governance Centre at Cardiff University.

But as infection rates soared in late March “they realised London didn’t know what it was doing”.

Public support was high until Cardiff called a 17-day “firebreak” lockdown on October 23 when cases were relatively low.

Mr Drakeford was accused of damaging the economy, and the media and Welsh Conservatives attacked the measure. “They got hammered,” Prof Wyn Jones said.

So when it ended, Mr Drakeford took his foot off the brake quickly and the infection rate soared.

He slowly tightened controls from December 4, and announced a national lockdown from December 20 as infection rates reached among the highest in the world. 

Hospitals now have more Covid-19 patients than in the first wave peak in April peak, although in the last week numbers have started to fall.

Weekly case rates have fallen from about 650 per 100,000 people before Christmas to 285 per 100,000. The number dying with Covid-19 as a cause hit 5,399 by January 20, 171 per 100,000 people, compared with 145 in England.

Wales has a lower infection rate than the UK average. Chart showing cases per 100k by specimen date

The economy is also struggling. Wales has offered small companies proportionally more financial support than anywhere else in the UK. Cardiff says its Economic Resilience Fund has helped more than 13,000 businesses and protected 125,000 jobs.

But unemployment has grown faster than the rest of the UK. Between August and October 2020 it hit 4.6 per cent, up from 3.2 per cent in the same period a year ago while the UK rate rose from 4.2 per cent to 4.9 per cent. 

Mr Drakeford’s ratings collapsed in December, with YouGov finding his positive trust score of +22 in mid-November had fallen to -1 a month later. But it remains, in Wales, above that of Boris Johnson, the UK prime minister, said Prof Wyn Jones. “People are more trusting of devolved politicians than London politicians.” 

Wales has a higher proportion of elderly than the UK average. Chart showing share of population in each age band (%)

However, the vaccine rollout could yet hurt Mr Drakeford. As of January 20 Wales had given a first dose to 5.5 per cent of the population, against a UK average of 7.5 per cent.

Despite telling the BBC that the government was releasing stocks slowly to ensure continuous delivery, he told the Financial Times that was not the case. “We are not delaying any jabs,” he said. Wales was “on track” to vaccinate the top four priority groups by the middle of February, matching the other UK nations.

He awarded his administration a B. “Nobody is going to go through this [pandemic] without making a mistake,” he said.

Adam Price, leader of Plaid Cymru, the Welsh nationalist party, said Labour’s record was “mixed” and it should have followed Scotland’s more conservative approach. 

But he said: “The pandemic has shone a light on the existence of a Welsh government and Welsh ministers. There is such a level of interest in Welsh politics. People have tuned in in their hundreds of thousands to the televised briefings.”

He predicted turnout for Welsh parliament elections in May will top 50 per cent for the first time after a surge in support for independence.

Some 33 per cent of the population would vote for it in a referendum, up from 23 per cent in December 2019, according to YouGov.

Mr Johnson’s mishandling of the pandemic, hostility to devolution and hard Brexit has alienated Welsh voters, Prof Wyn Jones said. “People feel they are being forced into a choice between the union without devolution or independence.” 



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Analysis

Pharma groups spend billions to tap into booming China healthcare

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Pharmaceutical groups signed partnerships with Chinese biotechnology start-ups at a record rate last year despite geopolitical tensions and concerns over intellectual property rights and data security in the country.

China has opened up its healthcare industry over the past five years, prompting US and European companies to seal deals with local companies to access the world’s second-biggest drug market.

A record 271 cross-border licensing partnerships were agreed in 2020 between multinational groups including Roche, Bayer, AbbVie and Pfizer and Chinese pharma companies, according to data from consultancy ChinaBio. The collaborations involve clinical trials, development and commercialisation and sharing data and are up nearly 50 per cent from 2019 and more than 300 per cent since 2015.

Deals are being signed despite concerns over intellectual property protection and the safety of US healthcare data in China, with analysts saying the market is too big and fast-growing to ignore.

China’s healthcare industry overtook Japan in 2016 to become the world’s second-biggest and is expected to surpass the US within three years. Pharmaceutical spending in China totalled $137bn in 2018 and will reach $140bn-$170bn by 2023, according to data provider IQVIA.

“There has been an increase in both deals where Chinese companies will develop and commercialise innovative drug candidates discovered by western companies and where multinational companies will do the same with cutting-edge Chinese-invented pharmaceuticals outside China,” said Sam Thong, chairman of Goldman Sachs’ healthcare group in the Asian investment banking division.


$170bn


Potential size of pharma spending in China by 2023

Under the Made in China 2025 strategy, a scheme designed to advance the country’s technology and manufacturing goals, Beijing has set targets for domestic drug companies to make progress on innovation and has streamlined the drug approval process.

China’s state medical insurance scheme has also added more branded, non-generic drugs to a list of those that qualify for patient reimbursement, including products by foreign companies such as Novartis, in a move that could boost demand.

Western groups have already reported the financial benefits of their China strategies.

Eli Lilly, the US pharma company, agreed a $255m deal with Shanghai-listed biotechnology business Junshi Biosciences last May to collaborate on a Covid-19 antibody treatment and reported a 41 per cent jump in quarterly profit in January. Eli Lilly’s chief scientist lauded the “exciting” phase 3 trial results for the treatment with Junshi that showed the antibodies reduced risk of hospitalisation and death by 70 per cent.

Junshi said the record string of partnerships proved China’s drugs were of “international quality”.

US was the most desirable region for cross border partnering

Pfizer agreed a $480m deal in September with CStone Pharmaceuticals that gave the US group a 9.9 per cent stake in the Hong Kong-listed company, which focuses on immuno-oncology medicines, as well as an exclusive licence to commercialise CStone’s cancer drug in China.

For Chinese start-ups, the partnerships can be used as a launch pad for their global ambitions, enabling companies to carry out trials and win commercial approval for their products in the west.

Eli Lilly signed a licensing deal worth more than $1bn with Suzhou-based oncology group Innovent in August for the exclusive rights to its lung cancer therapy outside China.

AbbVie, another US pharma group, agreed to pay mainland biotech I-Mab up to $2bn for access to its experimental cancer drug in September.

“This is an important step for Chinese companies because it validates their capabilities — their R&D is reaching a global standard,” said Cathy Zhang, Morgan Stanley’s head of healthcare for global capital markets in Asia.

Column chart of Number of deals showing China pharma partnering hit a record in 2020

But China remains under pressure to better protect intellectual property, a longstanding grievance for overseas companies.

Patent law changes in 2020 gave foreign groups more confidence they would be protected, but “enforcement is still a big issue in practice”, said Rocky Wu, a Shanghai-based partner for KPMG, the professional services firm. “The detailed guidelines on implementation of patent linkage has not officially been published.”

US national security experts are also worried about Beijing gaining access to American healthcare data, particularly genomic information, for both privacy reasons and concerns about the ability to use such data to help develop biological weapons.

The US-China Economic and Security Review Commission, which evaluates the national security risks attached to doing business with China, last year said Beijing had made the collection of foreign healthcare data a priority and tried to gain access to US information through “licit and illicit means”.

Chinese entities have done this through investments, partnerships and sales of equipment and services, the commission said in its 2020 report to the US Congress.

The commission added that “Beijing has placed increasingly tight restrictions on foreign firms’ ability to access and share healthcare-related data collected in China”, despite officially encouraging foreign participation.

Additional reporting by Wang Xueqiao in Shanghai, Thomas Hale in Hong Kong and Hannah Kuchler in New York



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Teachers grapple with how to help students scarred by pandemic

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As staff at Strive Collegiate Academy in Nashville prepare for the school’s reopening this month, principal LaKendra Butler is grappling with the best way to support pupils after a traumatic year in which their education was thrown into chaos by the pandemic.

“Our students are performing 10-15 per cent below the level a year ago,” Butler said. “Right now I’m prioritising their time during the school day and making sure we’re focused on bringing them back . . . [but] longer-term we need to look at how to do school differently. We can’t go back to the status quo.”

Strive is one of tens of thousands of schools around the world, from the US to the UK and the Netherlands, that will reopen their doors in the coming weeks, as students return to the classroom after months of often solitary online study.

A first priority will be regular Covid-19 tests and measures to cut the risk of the virus spreading in schools. The longer-term challenge will be assessing how far behind pupils have fallen in their academic and emotional development and finding ways to rectify the problem with often limited resources.

Getting students back into the classroom is just the start. Many educators believe schools will need to adopt radical new approaches to learning and spend eye-watering sums of money to close the “learning gap” and prevent a generation being scarred, their prospects set back permanently.

LaKendra Butler, left, says students at Strive Collegiate Academy in Nashville are performing 10-15% below the level of a year ago
LaKendra Butler, left, says students at Strive Collegiate Academy in Nashville are performing 10-15% below the level of a year ago © STRIVE Collegiate Academy

“Covid has been the largest disruption to education in history,” said Per Engzell, a researcher at the Oxford Leverhulme Centre for Demographic Science in the UK. “Ninety-five per cent of children were affected and in many countries schools have remained closed since [last] March. It’s totally unprecedented.”

Using detailed testing in the Netherlands, his team has identified an “alarming” average loss of learning equivalent in that country to one-fifth of the academic year — the entire period students were out of school in 2020. The finding “seems to bear out some of the worst misgivings on the magnitude of learning loss and social disparities”, he said.

The pattern is similar elsewhere. Jonathon Guy, research officer at the Australian Education Union, said the learning loss was even more marked for children from marginalised communities and disadvantaged groups. “Demographic factors, low levels of prior achievement and a lack of access to technology are the main concerns,” he said.

Surveys in Australia and other countries suggest widespread disparities in access to computers, affordable internet, safe places to learn and supportive home environments.

Home-schooling in remote Tarpoly Creek, New South Wales. Surveys suggest learning loss has been more marked for children from marginalised communities
Home-schooling in remote Tarpoly Creek, New South Wales. Surveys suggest learning loss has been more marked for children from marginalised communities © Lisa Maree Williams/Getty Images

Luke Sibieta, a researcher at the UK’s Institute for Fiscal Studies, has estimated that British pupils could lose a combined £350bn over their lives as a result of missed education during lockdown. According to a forecast by the World Bank, globally the loss could be as much as $10tn if effective policy responses were not introduced.

Those responses will not come cheap. In the UK, Sibieta suggested £30bn — equal to six months of spending on schools — as a useful benchmark for what the government should consider spending on “radical and properly resourced ways to help pupils catch up”.

Some teachers have sought to learn from approaches adopted after previous disruptions, such as when Hurricane Katrina overwhelmed New Orleans in 2005. Then, a so-called spiralling technique was used to reteach essential missing skills before proceeding with scheduled lessons.

David Steiner, head of the Johns Hopkins Institute for Education Policy in the US, who led a review of “catch up” techniques for Unesco, said the evidence was against strategies that promoted students automatically to the next grade regardless of the gaps in their learning or got them to retake the entire year with a younger class.

Instead, he called for “acceleration” programmes to test students and focus on missing skills essential to the next stage of study. “You need to narrow the list of topics to those that really matter and do ‘just-in-time’ instruction so they’re ready to take regular classes with grade-level peers,” he said.

Children sanitise their hands at a school near Bordeaux, France. Researchers say the pandemic has been the biggest disruption to education in history
Children sanitise their hands at a school near Bordeaux, France. Researchers say the pandemic has been the biggest disruption to education in history © Philippe Lopez/AFP via Getty Images

Butler has carved out two hours during her school’s daily schedule away from normal lessons, to focus on teaching in one-on-one and small group sessions, guided by periodic assessments of students’ progress and surveys of their parents.

She is also exploring more use of tutoring, an approach that has garnered attention around the world, including in a £1.7bn package in Britain. The UK has also appointed an “education recovery tsar” who has made clear that the catch-up would take years of work and “radical” curriculum changes.

James Turner, head of the Sutton Trust, a charity participating in the UK tutoring programme, said this was an essential response. “It’s not the complete solution but the evidence is very strong,” he said, estimating that the country would need 20,000 additional tutors to meet its objective of supporting 250,000 pupils in the current school year.

Matthew Kraft, associate professor of education and economics at Brown University in the US, cautioned that while there was strong evidence for the value of tutoring in small groups, “we know much less about scaling and maintaining its effectiveness”.

He proposed a “peer-to-peer” volunteer system where older students helped younger ones, to reinforce their own learning and give something back.

Jelmer Evers, a teacher in the Dutch city of Utrecht and vice-president of the country’s General Education Union, said the task was best tackled by qualified teachers, despite a backdrop of falling numbers entering the profession. They had greater knowledge of their students’ needs and of the curriculum than external tutors, he said.

For Amy Wood, principal at Mossbourne Riverside Academy in London, student wellbeing and social activities would be as important as academic work when her pupils return on Monday.

She remained optimistic. “Children are more resilient,” she said. “They’ll bounce back.”



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Analysis

Pandemic shift to premium brands leaves drinks makers in high spirits

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Drinks industry chiefs may be hoping for a new “roaring 20s” when coronavirus restrictions ease, but millions of households have already embarked on an era of upmarket stiff drinks in their living rooms as Covid-19 reshaped global drinking culture.

Global sales of tequila, vodka and liqueurs outperformed the broader alcohol market in 2020 as housebound consumers took to sipping high-end spirits and mixing their own cocktails.

While parts of the population faced acute financial hardship because of coronavirus, wealthier consumers who kept their jobs have been left with extra disposable income as holidays and going out became all but impossible.

That has resulted in “huge trading up” when it comes to alcohol, said Ed Mundy, analyst at Jefferies, as these cash-rich drinkers also took advantage of lower retail prices compared with those for the same drinks served in bars and restaurants.

“If you’re stuck at home and you don’t want to go out to the shops, it’s easier to buy a big bottle of spirits than 24 beers. There’s more cocktail making at home going on . . . people are trading up from brandy to cognac, from cheap drinks to expensive drinks,” said Mr Mundy.

Sales of prestige spirits, which cost more than $100 a bottle, are forecast to grow by more than two-fifths to 2024, about four times faster than standard brands and almost twice the growth of premium bottles, according to drinks analytics group IWSR.

Chart showing that prestige and premium brands forecast to outperform standard spirits

The world’s largest distiller Diageo said its tequila sales shot up 80 per cent last year, driven by the high-end brands Don Julio and Casamigos, which was co-founded by the actor George Clooney. The boom, centred in the US, has followed a resurgence of upmarket “pure agave” tequila as a sipping drink.

“The trend of moving to spirits away from beer and wine has accelerated in the pandemic,” said Ivan Menezes, chief executive of Diageo. The group’s North American chief said late last year that household penetration for spirits had increased in 2020 at three times the rate of beer, and double that of wine.

Pernod Ricard said its whisky brands Jameson and The Glenlivet had shown “solid growth” despite the closure of stores in airports and train stations, which have traditionally been a major sales outlet for spirits.

Globally, overall alcoholic drinks consumption fell just 8 per cent in 2020 by volume from the year before despite many pubs, bars and restaurants being closed, according to IWSR figures. But there were substantial differences between countries.

Chart showing drinks sales fell modestly in 2020 as people switchedto cocktails and upmarket spirits

Shifts in drinking patterns, at first glance, appear similar in the UK and US: sales through the “on-trade”, which includes pubs, bars, restaurants and clubs, dropped by half in 2020 in both countries, while retail sales rose 12 per cent.

Yet overall drinking was far higher in the US last year, since retail sales of drinks to consume at home account for much more of the market. Before Covid-19, a fifth of alcohol sales by volume took place in bars and restaurants in the US, while it was twice the level in the UK, Jefferies said.

In South Africa, where periodic alcohol bans have been imposed, and Turkey, where drinks sales are closely linked to tourism, consumption dropped by about a third. Many countries still turned to a spirit of choice: Brazilians favoured gin, Colombians liqueurs and vodka, said Diageo.

While all drinks makers suffered to some extent from pub closures, brewers were especially hit: the world’s second-largest brewer Heineken announced 8,000 job cuts this year as it struggles to deal with the drop in beer drinking.

In China, where the pandemic originated but where the virus was brought relatively quickly under control, drinking declined by 9 per cent but retail sales of drinks by volume were up 23 per cent, the highest among major markets. Kweichow Moutai, which makes a luxury version of the national white spirit baijiu, reported a 10 per cent sales rise for the year.

Chart showing that drinking dropped in countries with strong barand restaurant cultures

For those with a thirst for less fiery drinks — Kweichow Moutai comes in at 35 to 60 per cent alcohol — another trend has taken hold: the cocktail in a can. 

Ready-to-drink cocktails, a broad group that also includes the flavoured alcoholic sparkling water known as hard seltzer, were the only category to record growth last year. Sales increased by more than 40 per cent, a surge that began in the US but is also evident in other markets such as the UK and China.

As vaccinations are rolled out, analysts at Bernstein expect a return to “near normal” in terms of socialising by the middle of 2021. “As the vaccines are rolled out and lockdowns ease, there will be enormous pent-up demand to socialise, glass in hand,” said Trevor Stirling, analyst at Bernstein. 

And entrepreneurs are making a similar bet; in the UK, despite the pain of coronavirus, the Wine & Spirits Trade Association said a record number of new distillers were registered in 2020.



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