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CSR on the agenda

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A few years ago, reports indicated that Swedish life science companies did not focus as much on corporate social responsibility issues as other industries did.

While larger pharmaceutical and biotechnology corporations have formalized much of what they already were doing into corporate social responsibility (CSR) programs, in the case of small-to-medium-sized companies, little has changed, said one expert in the field.

“It is not a very surprising finding to me; the smaller you are, the more your focus is on one molecule, the one thing that has to be delivered,” said Bengt Mattson, head of sustainability for Swedish operations at Pfizer and a consultant for the Swedish Pharmaceutical Association. “I wouldn’t think the picture is very different from a few years ago.”

Medical effect and price are the primary factors

Mattson said he has discussed this issue several times with different stakeholders, and realized that in the case of a lot of other industries with clear consumer interactions, those interactions have been strong drivers for those industries to have green product lines to use or buy. “They were driven by development and communications about green initiatives.”

The pharmaceutical industry, for example, does not have the same clear drivers for environmental issues. While someone might choose to pay more for a refrigerator that has a greener profile, Mattson said, the same idea is not applied to medications.  Cost and effectiveness are the factors physicians consider when prescribing a drug and county councils cannot approve a medication based on just how green it is. “Medical effect and price are the primary factors; they have not found reasonable ways to introduce green into the discussions,” added Mattsson.

The right thing to do

Interest in ethics, corporate responsibility and green initiatives, though, has grown not only within industries, but in a lot of different investor groups. “There is a lot of work on greening the supply chain, but most of that is not directly controlled by the Swedish part of the global companies – rather their headquarters,” Mattsson noted.

Large corporations have had to brand some programs as CSR to keep in line with the desires of investors, customers and stakeholders, Mattson added. “A lot of activities have been going on for ages, but were never identified as a CSR platform; they were just the right things to do.”

Just providing drugs is not enough

Big companies such as Pfizer, Astra Zeneca and Novo Nordisk cite their work bringing medications and advisors to underdeveloped countries as well as the means to transport and store pharmaceuticals, among other programs, as corporate responsibility efforts. With those companies, just providing drugs is not enough; they also need to work on infrastructure to ensure drugs can be delivered to the people who need them, Mattson noted. Many Big Pharma companies also are working to reduce the amount of animal testing, which is not just the right thing to do, but less expensive.

Start building CSR for your corporate brand

Some of the smaller players understand the kind of pressure Big Pharma feels to build corporate branding and be looked upon as practicing corporate responsibility, he said. Likewise, small or medium-sized biotech companies could certainly have a CSR agenda or program. These firms can analyze their existing programs and business practices and classify many of them as CSR efforts, especially since it is harder for smaller companies to set up huge drug donation programs. “Small and medium-sized companies should start building CSR for their corporate brand,” Mattson said. “They will have to meet the expectations of Big Pharma collaborators moving forward.”

If a smaller company works with a molecule designed to cure a specific type of cancer and meets with a patient organization representing people affected by the disease, the work with the patient group could be viewed as a type of CSR program, according to Mattson. Or the company could decide that using green chemistry is a condition for the development process of this drug. “The green chemistry could be one of the requirements of a customer or a CSR initiative.”

Also, if a smaller firm is selling something to a larger company that expects some part of the chemistry process to be green, it would expect the big company to pay more, he said.

A complete pharmaceutical company

Smaller companies are reaching out for CSR guidance. As part of his work, Mattson consults with firms that want to start a CSR program. “I like to be able to see inside a company and help others in the industry.”

Recently he was scheduled to meet with officials at Oasmia Pharmaceutical AB in Uppsala, Sweden, which currently has no clearly defined CSR program. Members of the company’s management team planned to start off meeting with Mattson to get a better understanding of what CSR entails, said Anders Lundin, Oasmia’s chief financial officer.

“The reason for Oasmia to start up a CSR program is that it represents a step in the company development from a drug development company to a more complete pharmaceutical company,” explained Lundin.