Regulation, efficiency and reputation have encouraged many
organisations to consider how they can measure and reduce carbon
emissions in their own businesses. The agenda, however, is now
shifting towards the wider carbon
impact of the organisation. There is an increasing awareness
that emissions outside the direct organisational control represent
an opportunity to improve cost efficiencies and reduce
emissions.
In the pharmaceutical sector, this could apply to the carbon
embodied in a particular drug, how chemical waste is disposed by a
supplier or the release of greenhouse gases contained in the
propellant of an inhaler used by patients. This is important
because the National Health Service (NHS), which represents
approximately 25% of England's public sector emissions, estimates
that 60% of the emissions can be allocated to procurement.
Pharmaceutical companies recognize that significant savings
could be made in their indirect
emissions and there is increasing pressure for them to
demonstrate this to their customers. There are, however, certain
challenges to overcome.
Pharma Challenges
Product Development
A new drug can take significant time and resources develop, from
initial R&D through to approval by regulatory bodies. It is
very difficult to then change the components, packaging and
delivery model of pharmaceutical products because of expensive
retesting and new regulatory approval. This contrasts with the
retail sector where product specifications can change within days
in response to a new low carbon innovation. The challenge for
pharmaceutical companies, therefore, is to understand how to design
the carbon, and associated cost, out of products during the initial
R&D phase.
Patent System
When a pharmaceutical company is granted a patent it is
important that that product reaches the market quickly to meet the
needs of patients, to recover the costs involved in the R&D
phase and to maximize the patent lifetime. The urgency to bring the
drug to market means that it may not necessarily be manufactured as
efficiently as possible.
Relationship with Suppliers
Companies with fast moving consumer goods and high volume sales
are more able to quickly use different raw materials and suppliers
to reduce emissions. In contrast, this is more difficult for
pharmaceutical companies because of the specific and complex
chemical processes and more limited number of API suppliers.
Collaboration with these suppliers, therefore, is more important if
reductions are to be achieved across the supply chain.
Supply Chain Characteristics
The large number of chemical components that are frequently used
to produce a drug introduces another challenge for pharmaceutical
companies. The supply chain becomes more complicated at the start
of the supply chain, which makes it more challenging to trace
detailed information.
Packaging
Drugs are packaged in accordance with regulations, and so may
not use the most carbon‑efficient design. It can be challenging,
therefore, to implement innovative designs that save carbon yet
adhere to regulations.
Pharma Response
With these challenges in mind, how can pharmaceutical companies
respond?
Production Techniques
The production of many drugs can be expensive and requires
complicated chemical processes that generate significant amounts of
waste. Optimizing the production process to increase yield and
minimize waste will undoubtedly increase profits and save
carbon.
Product Use Phase
GlaxoSmithKline revealed in its 2010 Sustainability Report that
an estimated 40% of its overall carbon footprint comes from
indirect emissions resulting from the use phase of its products,
such as propellants in inhalers. This highlights that the use and
disposal of pharmaceutical products can significantly affect
emission reductions.
Collaboration
The industry is looking at more collaboration to source and
refine raw materials. Although individually, pharmaceutical
companies may procure a chemical ingredient at a lower volume than
other industries, a collective approach to encourage suppliers to
adopt less carbon‑intensive processes can affect change.
Collaboration might also be an effective approach to tackle the
regulatory red tape encountered when changing a product to a lower
carbon design.
Working with the NHS
The UK NHS accounts for 4% of global pharmaceutical sales and a
large proportion of UK investment. New technology and processes
such as RFID tagging, use of two‑dimensional barcodes and new
packaging techniques can help to optimize stock control, reduce
wastage and improve logistics. These developments should also have
a positive impact on the environmental footprint of healthcare and
pharmaceutical products, as well as generating cost savings for the
NHS.
Expert Help
The assessment of reducing carbon across a pharmaceutical value
chain can be complex. It is important that the assessment meets the
business aims of the company and adds value. Pharmaceutical
companies should start evaluating this area now and seek expert
guidance.
Conclusion
The unique business model and intrinsically innovative nature of
the pharmaceutical industry mean that it is a particularly complex
sector for measuring, managing and reducing carbon emissions. As
expectations of customers increase, however, forward‑thinking
pharmaceutical companies can genuinely differentiate their brand
and products from the competition by reducing the carbon impact of
their products.