IICA-GIZ Business Responsibility Initiative
Sector Guidelines for the Pharmaceutical Sector
30 October 2014
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Pharma sector trends| Reputational risks
•. At present the Indian pharmaceutical industry has about 300 large units, 1700
medium-size units and about 8000 small-scale units throughout the country.
•India currently exports drug intermediates, Active Pharmaceutical Ingredients (APIs),
Finished Dosage Formulations (FDFs), Bio-Pharmaceuticals, Clinical Services to various
parts of the world. The export industry stands at USD 9.1 billion.
•The domestic Pharma Industry has recently achieved some historic milestones through
a leadership position and global presence as a world class cost effective generic
drugs' manufacturer of AIDS medicines
•India’s position as a strong player in the global pharmaceutical market had been under
attack for some time with the notion that Indian drug makers also produce and
export spurious drugs.
•The Centre has decided to conduct an all India survey on the extent of availability of
spurious and not-of-standard quality drugs in the country. It is expected to be a broadbased survey covering 42,000 samples belonging to 15 therapeutic groups.
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Pharma sector trends| Policy
•Highly regulated sector: various policies, laws, institutions
•Policy/law set at national level and implemented by state
•Detailed yet complicated regulatory framework (N & S legislation/institutions)
• Stringent GMP enforcement (Schedule M, D&C Act 1940)
•Strict government price regulation (DPCO, 2013)
•The implementation of the TRIPS Agreement will give rise to factors that can put
access to medicines out of reach for millions of people in the developing world.
•To truly improve access to medicines in India, we will need to continue to work together
to advance sustainable policy solutions to healthcare financing, infrastructure, and
human resources challenges, among others, rather than focus on compulsory licences
or other ways of undermining patent protection of innovative medicines.
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Trends in BR reporting in the sector
In a study conducted by PWC and commissioned by the IICA-GIZ Business
Responsibility Initiative, the first set of BRRs of the top 100 listed companies were
analysed, out of which 5 are pharmaceutical companies.
Very limited reportage of
details of resource use
reduction by way of raw
material recovery
processes and reduction
in packaging and printing
No reportage of safe
usage and side-effects of
medicines and drugs
Labelling practices
focusing on mandates
only
Percentage of inputs
sourced sustainably not
reported
Quantitative figures on
waste
management/recycling
not reported
Litigation challenges not
addressed
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5
BACKGROUND
AN
INTRODUCTION
TO THE NVGs
National Voluntary Guidelines – the relevance to your
Seite 5
Definitional Clarity
Triple
bottomline
Business
Responsibility
An allencompassing
framework
Responsible
Business
Economy
Sustainability
ESG
Seite 6
NVGs: BACKGROUND
International and
Indian perspective
on social
responsibility
Different practices/
prescriptions by
different agencies
Need for a holistic
Indian concept of
Business
Responsibility:
Social
responsibilities
Environmental
responsibilities
Economic
responsibilities
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Essence of the NVGs
Competitiveness-responsibility-development go together
Focus on
Materiality
Focus on
integration
Stakeholder
engagement
Value
creation
Reporting
Seite 8
Consultations and Consensus
09 consultations (government, Civil
society, FIs, MSMEs, large businesses)
Written feedback (national and
international)
2000 comments (editorial, substantive,
technical, adoption models)
Clear and transparent criteria for
feedback incorporation
Seite 9
NVGs: Structure
9 Principles with brief description and 48 core elements
Implementation Guidance
Indicators ( metrics) to enable self-monitoring
Specific inputs for MSMEs
Case-lets to aid comprehension of good practices
Business case matrix
Mapping of Principles against prevailing laws and Acts
Glossary of terms used
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NVGs: The nine principles
P
R
I
N
C
I
P
L
E
S
1.
• Transparency, ethics and accountability
2.
• Providing goods and services that are sustainable over entire life cycle
3.
• Well-being of employees
4.
• Being responsive towards stakeholders, especially the disadvantaged
5.
• Respecting and promoting human rights
6.
• Protecting and restoring the environment
7.
• Responsible policy advocacy that enhances public good
8.
• Supporting inclusive growth and development
9.
• Providing value to customers responsibly
Indivisibility of principles key to linking competitiveness, responsibility and
development
Seite 11 impact.
Implementation guidance
Four pillars of Implementation
Components of Implementation Guidance
Approach to
adoption of
Guidelines
Leadership
Integration
Building a Responsible
Business Strategy
Engagement
Reporting
Indicators for selfassessment
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Implementation guidance
Steps
Commitment of Top
Management and
supportive
governance
structure
Analysis and
Improvement
Continuous
improvement
Policy Deployment
and Process
management
Monitoring and
Evaluation
Disclosure and
reporting
Sensitization and
Training
Stakeholder
Engagement
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Disclosure Framework
A framework for reporting on performances related to the
Guidelines
Envisioned to be an enabling instrument
“Apply or Explain”
Pragmatic, light and single format
Accountability and aggregation of data – public good
Business case – what you can measure, you can manage –
improves performance of companies
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Objective of BRR
It is about the process, meaningful disclosure
• Organizational overview
• Strategy
• Performance
• Opportunities and risks
• Future outlook
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Report and Reporting
Reporting
Report
Reporting is:
Reporting is not:
• A process of
• An event with a
identifying issues that
starting and ending
affect and are affected time
by a business
• A data generating
• A continuous, ongoing
activity
activity
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Rationale for Sector Guidelines
Specific and most relevant
sector issues under each
principle are brought forth
Aid better implementation
and reporting by companies
on sustainability issues
Aid comparability with
peers, provide sector wide
data
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Implementation
Guidance
• The nine principles
remain
• The core elements
change to become
specific to the sector
• Material issues
relevant to different
segments of the
pharma sector
reflected in core
elements
• Guidance document
on how to integrate
the guidelines into
the company’s core
operations
• (a) Policy design/
roadmap
• (b) Selfassessment
Indicators
(core/advanced)
3.
Principles and
Core elements
2.
1.
Key Components of proposed structure of
the guidelines
Disclosure or
Non-financial
reporting
framework
• To help the pharma
company:
• Focus on
materiality
• Encourage them to
‘Apply or Explain’
• Review
organisational
strategy
• Create value
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Thank you
Neha Kumar, GIZ
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