30 th October 2014, New Delhi BUSINESS RESPONSIBILITY GUIDELINES FOR PHARMACEUTICAL SECTOR IN INDIA

 Overview of Indian Pharmaceutical Sector  Regulatory Environment  Key Stakeholders  Industry Association – Key role to play  Rethinking Business Responsibility – A previous study by CUTS  Mapping of ESG issues in Pharma sector  Key issues for consideration 2 OUTLINE OF PRESENTATION

 Ranked 3 rd in volume and 14 th in value terms, globally  Expected to grow toUS$55bn by 2020  Highly fragmented sector > 20,000 firms (L/M/S)  Industry faced with allegations of malpractice  Access to good quality, affordable, essential medicines is still a challenge 3 1. INDIAN PHARMA SECTOR: OVERVIEW

 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) Detailed yet complicated regulatory framework (N & S legislation/institutions)  Little or no coordination between regulatory agencies  Stringent GMP enforcement (Schedule M, D&C Act 1940)  Strict government price regulation (DPCO, 2013) 4 2. REGULATORY ENVIRONMENT

 Government (MoHFW, DoP0, CDSCO, State FDA)  Pharmaceutical firms  Pharma Associations – crucial role to play  Healthcare providers (Doctors, Hospital )  Pharmacists  Patients/consumers 5 Key Stakeholders

 National-level Associations: - Indian Pharma Alliance (IPA) - Indian Drug Manufacturers Association (IDMA) - Bulk Drug Manufacturers Association (BDMA) - Org of Pharma Producers of India (OPPI) - Confederation of Indian Pharma Industry (CIPI)  State associations also present in many states  No institutional basis for interaction: Nat & State Assocn 6 3. PHARMA ASSOCIATIONS – KEY PLAYERS

 Awareness of legislations good, but compliance often weak  No institutionalised process of Interaction between sectoral association and government/regulators  Sectoral associations not responsible for monitoring behaviour of members --Co regulation – one of the mechanism to ensuring better compliance  Sectoral analysis of pharma sector (key issues and corresponding NVG Principles) – in the matrix form 7 Findings of a previous CUTS study (BRCC)

GOAL & PURPOSE  Key goal (pharmaceutical sector): provide good quality medicines at affordable price  High public interest element, unlike other sector(s)  Output from industry used as input for health sector NATURE OF SECTOR  High private participation for providing public good Co-REGULATION  An opportunity for industry and government to play complementary roles  Guidelines/Codes in existence  Associations are interested  Industry led guidelines, for better buy-in 8 4. WHY NVG FOR PHARMA SECTOR? (NATURE & READINESS)

Juxtaposing Critical Issues pertaining to the Pharmaceutical Sector on the NVGs Framework 9 Mapping of Key ESG Issues in Pharmaceutical

 Refrain from unethical promotion and marketing of drugs  Addressing information asymmetry – for communities, patients, consumers, etc.  Disseminating knowledge and sharing ‘good practices’ by the pharma industry  Encouraging whistle blower policy at firm level  Dealings between Pharma companies and doctors  Compliance with relevant laws, regulations 10 NVG Principle I: Ethics, Transparency & Accountability [business should conduct and govern themselves with ETA]

 Promote NVGs principles throughout the invert ‘supply-chain’ and ‘contract manufacturers’  Unused/date expired medicines disposal  Drug recalls 11 NVG Principle II: PRODUCT LIFE CYCLE SUSTAINABILITY [Business should provide goods and services that are safe and contribute to sustainability throughout their Life Cycle]

 Training and enforcement of occupational safety standards  Safe handling of chemicals and equipment (GLP)  Presence of employee’s grievance redressal mechanism at firm level  Overall work place safety  Gender sensitivity and zero-tolerance for harassment 12 NVG Principle III: EMPLOYEES’ WELL-BEING [Business should promote the wellbeing of all employees]

 Adequate attention to mapping of ‘relevant stakeholders’  Development of a strategy for stakeholder engagement with special attention to: communities at risk, patients, PAP, etc. 13 NVG Principles IV: STAKEHOLDER ENGAGEMENT [Business should respect the interests of, and be responsive towards all stakeholders, espacially those who are disadvantaged, vulnerable and marginalised]

 Well-laid out and communicated policy on ‘Clinical Trials’ – [access to new medicines will be a challenge]  Policy for proper care and compensation in-case of mishaps  Engagement with human rights experts and practitioners for advice 14 NVG Principle V: HUMAN RIGHTS [Business should respect and promote human rights]

 Achieving Energy Efficiency  Keeping emissions (air) and discharges (water) within the prescribed standards  Management of hazardous wastes  Moving towards better water efficient production 15 NVG Principle VI: ENVIRONMENT [Business should respect, protect and make efforts to restore the environment]

 Productive and continuous engagement on relevant policy matters  Support initiatives on key issues viz. Prescription Audit, Rational Use of Drugs, etc.  Pricing 16 NVG Principle VII: Policy Advocacy [Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner]

 Investing and developing (through R&D) innovative yet affordable medicines  Continue to give adequate attention to production of good quality ‘generic medicines’  Work towards improving access to essential drugs, especially in remote locations 17 Principle VIII: INCLUSIVE GROWTH [Business should support IG and equitable development]

 Proper labelling and disposal of medicines  Promotion of ‘rational use of drugs’  Redressal mechanism for customers 18 Principle IX: CUSTOMER VALUE [Business should engage with and provide value to their customers and consumers in a responsible manner]

 Prioritization of the key dimensions – environment most critical with second and third order impacts  How is the voice of the patient addressed?  Doctor-pharma company relationship  Clinical trials 19 Key issues for consideration

 Can we add to the dimensions for each of the principles ?  NVG’s for mid sized companies since they are part of the value chain of the large manufacturers – how should this be structured? Should we go by turnover, standard definition or nature of product/process?  Any other aspects? 20 Key question for discussions

 How can the industry associations present here offer a way forward for the implementation of the NVG? 21 How can co-regulation enable?

THANK YOU 22