Published on March 12, 2014
CSR & Sustainability in the Indian Pharmaceutical Sector
CSR & Sustainability in India • Sustainable development is vital to not only improving a company's commitment to its stakeholders but also in reducing costs through efficient use of scarce resources and processes. • Organizations increasingly find that their P&L statements are influenced by parameters that do not feature on the balance sheet. These external parameters are “sustainability” issues that could be economic, environmental or social in nature. • However, only around 10 per cent of the firms in the BSE 200 bring out sustainability reports.
Pharmaceutical Industry – An Overlook The branch of the chemical industry associated with the discovery, development, and manufacture of drugs and medications Because of sustained efforts, it has greatly aided medical progress & severity of diseases such as typhoid fever, poliomyelitis, syphilis are greatly reduced Challenges face by the industry : Identifying new drug targets, attaining regulatory approval and refining drug discovery processes Need for CSR in the Pharma Sector CSR is a strategy where corporates integrate social, environmental or other important concerns in their business strategies on volunteer basis Healthcare and pharma companies are often criticized by people as a consequence of escalating healthcare prices and increase in healthcare fraudulent cases. Need for pharma firms to improve their image and counter negative public perceptions CSR blends excellently with their business strategy
Pharmaceutical Sector in India • Indian pharma industry ranks 3rd globally in terms of volume • 4th largest producer of pharmaceuticals • Presence of 15 of the 20 largest companies in the world • 35% of the drugs in the US markets come from India • Highest quality approvals from USFDA, EDQM & MHRA • 13 billion USD sales in 2012 List of Major Indian Pharma companies: Dr Reddys Labs Cipla Lupin Ranbaxy Labs Glenmark Abott India Novartis India
R & D Spending of leading Indian & Global Pharmaceutical Companies Indian pharma majors have to spend Rs.325 cr under Corporate Social Responsibility scheme Companies Bill 2012
Case Study : GlaxoSmithKline • Three primary areas of business: • £25bn Amount returned to shareholders via dividends and buybacks over past five years • 1st in Access to Medicines Index • 23 :Number of new product approvals in the USA and Europe in the past five years Pharmaceuticals Vaccines Consumer Healthcare £18.0bn Turnover £3.3bn Turnover £5.1bn Turnover 68% of Group 13% of Group 19% of Group
CSR Ratings Overall Community Employees Environment Governance GSK India 57 57 66 47 61 GSK Global 52 51 53 55 51
GSK’s CSR Initiatives • GSK has substantially reduced the price of its patented medicines in the least developed countries (LDCs) to 25% of developed world prices. • GSK reinvests 20% of its profits from sales of medicines in those countries to support the strengthening of healthcare infrastructure. • Researchers also have access to GSK's intellectual property and know-how. GSK’s initiatives can be classified as : Health for all Our behavior Our people Our planet
Health for all - overview • Giving children a better start in life through deworming • Aims at improving health by developing innovative & improved products & disease prevention • Partnering with others to tackle issues of lack of health infrastructure • Interactive patient programme to make better medicines
Global challenge • Poverty – a key issue • WHO recommends – investment of $44 per capita per year • 29 countries still to meet this target
Global challenge Barriers at global level • Lack of effective treatments • Affordability • Healthcare infrastructure • Resistance to existing treatments • Non communicable diseases • Stigma & discrimination GSK role • Innovative science creating value for all • Access to healthcare • Investing in treatment of diseases of developing world
Diseases of developing world GSK commitment • Partnering with Gates Foundation to fight 10 out of 17 neglected tropical diseases • Investing in PHASE – Personal Hygiene and Sanitation Education • Dedicated NTD units set up to accelerate the fight • Since 1998 half a billion people in more than 50 countries have been treated • Eradication of polio and researching vaccines for malaria and fight against HIV / AIDS • Product & financial donations • 3 billionth albendazole tablets donated • Donations to low income patients through Patient Assistance Programs in USA • Supplying antibiotics, basic medicines to those hit by epidemics and natural calamites
Financial giving 54 131 3 18 Financial giving in £m Cash Product and in-hand Time Management
% spent on support programmes 5628 16 Financial giving in % Health & well being Education Other
Ethical standards & behavior • Integrating value based culture • Medical governance • Bribery and corruption • Human rights • Compliance • Addressing misconduct • Breaches of external codes • Sales & marketing • Working with healthcare professionals • Research practices • Manufacturing & supply chain • Public policy and patient advocacy and taxation
Our People • Talent and development - Recruited 317 graduates globally, making progress towards the target of recruiting 450 graduates a year by 2015. • Empowered 91 employees from 22 countries to volunteer with 51 non- profit organisations in 26 countries through PULSE assignments. • Inclusion and diversity - Increased the proportion of women in management to 40%, up from 39% in 2011. The people we employ in our Emerging Markets, Asia Pacific and Japan regions represent 42% of our total workforce, up from 40% in 2011. • Launched Project Search in the UK to help a group of young people with learning disabilities make the transition from education to the world of work at GSK.
Our People • Employee engagement - In the global employee survey, 85% said they were proud to work for GSK (based on 72% participation). This equals the level from the last survey. • Health, safety and well-being - Reduced the injury and illness rate by 10%. • Provided resilience training for 6,400 employees, including advice on reducing stress and improving energy levels.
Our Planet • Carbon - Despite reducing the carbon from energy use by 15% since 2010, the total carbon footprint (excluding that from raw materials) has increased by 7% from 2010 driven by higher inhaler sales. • Water - Reduced water consumption in their own operations by 14% compared to 2010. • Waste - Cut total waste by 9% and sent 40% less waste to landfill compared with 2010. • Established an inhaler recovery and recycling service in the UK, USA and Chile, collecting more than 90,000 used inhalers in the UK.
Our Planet • Managing other impacts - Created a Green Chemistry Performance Unit to research ways to replace hazardous chemicals and processes with lower impact alternatives. • Pledged £12 million to establish a Centre of Excellence for green chemistry in collaboration with the University of Nottingham, UK. • Engagement - Engaged 32 suppliers on carbon, water and waste reduction.
GSK’s CSR in India • Gramin Arogya Vikas Sanstha (GAVS) – focus on Tribal health care project – covering 60 villages through nine health centers and mobile van clinics in Nashik, Maharashtra – In 2012, this project has impacted the lives of 30,000 direct beneﬁciaries and 1.25 lakh indirect beneﬁciaries through health checkups and education sessions. • Support to Institute for Indian Mother and Child (IIMC) – providing primary health care services to mother and child – Covered 950 villages while catering to 300 mothers and 26000 malnourished children. • Assessing health care needs of 30,000 slum dwellers in the slums of the dumping grounds in Deonar, Mumbai Tribal population is 8% of India’s total population (MMR) of India is 212 per one lakh live births
GSK’s CSR in India • Cancer care support for four voluntary organizations – 120 camps were conducted where 10,000 patients were screened for cancer - 1849 were suspected with cancer out of which the hospital has operated upon 248 patients thereby helping them to cure their cancer. • Residential shelter home for children in Jodhpur, Rajasthan & Behraich, Uttar Pradesh – providing them education, food and shelter & preventing migration for labor – "School Chalo Abhiyan" was organized – Child helpline 1077 was also initiated to protect child exploitation 5.56 Lac deaths in a year in India due to cancer 2 Crore Children in India engaged in Child labor
Good Practices In Pharmaceutical Companies Formulation of GMP (Good Manufacturing Practices) in 1967 by WHO Environmental protection – Companies treat effluents before disposal following EHS safety guidelines Being transparent – medicine recalls Implementation of information technology Accountability for actions
Examples of Good Practices by Major Pharmaceuticals Ranbaxy Sanjeevan Swasthya Sewa, a public private partnership with the Punjab State government in 2010 where the focus is mainly on primary healthcare and prevention and early detection of commonly found cancers of cervix, breast and oral cavity. Novartis Malaria Initiative – Assistance and aid in manufacturing and supplying “AL”, in areas such as sub-Saharan Africa, where infants and young children suffer from Malaria Bayer – Didget, social networking site and blood glucose monitoring tool for young people living with diabetes in the United Kingdom River blindness plagued remote communities in Africa, Latin America and the Middle East. In October 1987, Merck committed to donate Mectizan, a much needed medication with the goal to help eliminate river blindness. Merck has stated that it will continue to donate this medication as much as needed. (Ref: http://www.merck.com/about/featured-stories/mectizan1.html)
Bad Practices in Pharmaceutical Companies Failure to comply with FDA norms Stopping the manufacture of low cost medicines Illegal drug trials - Not following the guidelines laid down by Nuremberg Code, International Conference on Harmonization (ICH) guidelines, etc Not revealing the failed test groups results Unethical Marketing Practices Gifting and rewarding doctors to promote drugs
Examples of Bad Practices by Major Pharmaceuticals In 1998, 6.1 million people in developing countries died from diseases that are preventable, and curable, including malaria, tuberculosis, and lower-respiratory-infections. These people died because the drugs used to treat their diseases are either no longer effective, nonexistent, or too expensive. In June 2008, Pfizer was forced to pay a $975,000 fine for violating the Clean Air Act at one of its manufacturing plants in Groton, Connecticut – a drop in the bucket for a company that makes upwards of $50 billion in profits every year. The Pfizer plant was emitting methanol, hydrogen chloride, methylene chloride, MTBE, hexane, toluene and other chemicals classified by the EPA as hazardous air pollutants Masking the trial as a “humanitarian mission”, Pfizer tested an experimental antibiotic called Trovan on meningitis-infected Nigerian children without their knowledge or the knowledge of their families. 11 children died, and others developed brain damage and crippling arthritis. In 1998, Bayer, conducted pesticide experiments on humans - called the Inveresk trials. The experiment conducted was a forceful effort to get US Environmental Protection Agency to reverse pesticide controls introduced to protect children. The chemical, which the participants were given in minute doses, was a pesticide deemed 'highly hazardous' by the World Health Organization.
Conclusion • The proactive practices of International pharmaceutical companies towards sustainability are beginning to show measurable results. • With the recent prescription from the GOI, the Indian Pharma Inc seems to be gearing up to earn its stripes as a more responsible corporate citizen.
Thank You Presented by: Neha Kumar – A029 Rashi Kapur – A039 Sonal Rajadhyax – A050 Tarannoom Rehmani –A053 Yuvraj Tandon – A059 November, 2013
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