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 SectorCSR is a strategy where corporates integrate social, environmental or other important concerns in their business strategies on volunteer basisHealthcare 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 perceptionsCSR 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 LabsCiplaLupinRanbaxy LabsGlenmarkAbott IndiaNovartis 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

£18.0bnTurnover

£3.3bnTurnover

£5.1bnTurnover

68%of Group

13%of Group

19%of Group

CSR RatingsOverall

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 & discriminationGSK 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

318

Financial giving in £m

CashProduct and in-handTimeManagement

% spent on support programmes

5628

16

Financial giving in %

Health & well beingEducationOther

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.

Data Summary

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 EnvironmentalProtection Agency to reverse pesticide controls introducedto 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 – A029Rashi Kapur – A039

Sonal Rajadhyax – A050Tarannoom Rehmani –A053

Yuvraj Tandon – A059

November, 2013