Corporate
Responsibility and
Third Party
Relationships
GSK and Contract
Manufacturers
James Hagan
Vice President
Corporate Environment, Health &
Safety
GSK and Contract Manufacturing
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Overview of GlaxoSmithKline
Scope
Business/CR/EHS drivers
CR / EHS process
EHS management and audit
EHS data reporting for CM
Summary
Overview of GlaxoSmithKline - Who are
we?
World leading research-based pharmaceutical
company.
GSK’s mission is “to improve the quality of
human life by enabling people to do more,
feel better and live longer”
 7% of total global pharmaceutical sales
 Total company sales: £21.2 bn / $31.8 bn
GSK - Where are we?
Our International Region covers
80% of the world’s population
GSK - Where are we?
 100,000 employees worldwide
– R&D
 16,000 employees
 at 24 sites
 in 7 countries
– Manufacturing
 42,000 employees
 at 91 sites
 in 38 countries
– Sales & Marketing
 40,000 employees
 191 countries
Our Flagship Products
Our Flagship Products
 GlaxoSmithKline develops, manufacturers and
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markets:
– pharmaceuticals, vaccines, over-the-counter
medicines and health related consumer
products
Our broad pharmaceutical product line includes:
– antibiotic, antidepressant, gastrointestinal,
dermatological, respiratory, cancer and
cardiovascular medications
In 4 of the 5 largest therapeutic areas worldwide,
we are world leaders:
– anti-infectives, CNS, respiratory and metabolic
Our Flagship Products
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We supply products to 191 global markets
Produce over 1,200 different brands
Manufacture 4 billion packs per year
Produce over 28,000 different finished packs
per year
 Supply 6,900 tonnes of bulk active each
year
 Manage 2,000 new product launches
globally each year
Scope of Contract Manufacturing
Contract Manufacturers are integral to GSK’s
supply chain
 GSK has strategic alliances and
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partnerships with over 400 Contract
Manufacturers (many long term)
Across all the products in our portfolio
For all the stages of product life cycles:
GSK Spends over £800m per annum
Business drivers for Contract
Manufacturing
 GSK has strategic alliances & partnerships with
Contract Manufacturers:
– To optimise supply chains & costs
– To provide a ‘best in class’ supply base
– To partner with companies on specialist
processes or technologies
 GSK has a regional approach to supply local
markets
Corporate Responsibility drivers for
Contract Manufacturers
 Committed to doing business with integrity
 Protect our Corporate Reputation
 Ensure compliance with EHS regulatory
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requirements
Protect CM employees, local communities,
and the environment
Minimise business interruption and ensure
continuity of supply of medicines
Minimise risk to GSK
Foster sustainability
Provide for competitive advantage
How do we manage the EHS / CR
component?
Work in partnership with Contract Manufacturers
to prevent adverse events and ensure continuity
of product supply:
 Structure our approach within a comprehensive
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framework of Standards
Integrate EHS/ CR considerations in sourcing
decisions and Contract Manufacturer selection
Incorporate EHS / CR requirements in contracts
Conduct EHS audits to assess conformance with
GSK requirements and highlight areas for
improvement
Monitor progress with audit follow-up
GSK - EHS Framework
Policy
Standards
Guidelines
Tools & Best Practices
What the Global EHS Standards Do
• Establish a management system approach
• Outline minimum requirements
• Drive towards excellence
• Apply to everyone
• Effective from 2001
CR/EHS Requirements for Contract
Manufacturers
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Two specific Standards on CM
Distilled set of Standards for CM
Utilised in selection process
Incorporated in contracts
Requires
– compliance with laws & regulations
– compliance with GSK Standards
– report adverse events
– report EHS performance
Corporate Responsibility issues beyond
EHS
CR requirements are included in contract
language and audit teams assess Contract
Manufacturers to ensure that they:
 Comply with local employment legislation.
 Do not discriminate against sex, race,
religion or disability.
 Do not use child (< 16 years) or bonded
labour
Scope of the EHS Audit Programme
 Conduct over 40 audits per annum globally
 Selection for audit:
– where there is a significant spend / revenue / gross
profit dependency
– serving multiple key markets or essential supply chains
or supplying WHO products
– where significant hazards are presented by GSK
technologies / products / processes e.g. cytotoxics
 Contract Manufacturers have rated from 30% to
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86% (out of 100%) on an EHS Audit scheme
Equivalent to ‘Poor’ - ‘Excellent’ on qualitative
ratings or bandings
Audit process
 Provides a governance review
 Provides for working in partnership
 Improves EHS performance of Contract
Manufacturers through continuous review
Audit process
No progress = 2nd ‘exit’
opportunity
Example - EHS Audit Rating / Banding
Audit Experience Summary 2002-2003
 Downsides
– Some lack of investment / limited resources
(chiefly in the containment of APIs)
– Occasionally poor Chemical Agents assessments
– Occasional high incidence of EHS adverse
events
 Positives
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Commitment to progress actions rapidly
Willingness to learn from the audit experience
Growing proportion of companies with ISO14001
Best practices GSK could learn from…...
Annual Report Information
 2002: Collected EHS data from key Contract
Manufacturers
 2003: Verifying the data collection process
 2004 and beyond:
– Expand the number of CMs reporting results
– Incorporate collective results as part of
GSK’s annual report
– Include Contract Manufacturers as part of
GSK EHS footprint
Summary
 The emphasis on partnership and
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continuous improvement
EHS / CR considerations are integrated in
the business process
Audit teams conduct EHS audits to assess
conformance with GSK requirements
EHS performance is generally good
Future annual reporting to include EHS
performance results