LIF, the association of the research based industry in Sweden, arranged a seminar today regarding environmental and social requirements in public procurement of pharmaceuticals. We had the privilege to listen to Cecilia de Pedro (CR Communication as AstraZeneca) presenting her university thesis from back in 2005.
In her thesis she was the first to describe the situation with large API (Active Pharmaceutical Ingredient) releases in Hyderabad, India. Read more about those releases on my previous blog posts, e.g. Aug 16, 2010. Cecilia took us on a very interesting, but sad, journey... Large releases of pharmaceutical substances out from the waste water treatment plant in Patancheru, just outside Hyderabad.
She managed to really give us a strong feeling about the whole situation, describing the smells and sights that met her in the Hyderabad region. The presentation gave the perfect background to the next lecture, regarding the environmental and social responsibility requirements the County Councils include in the procurement questionnaries.
Anna Lipkin from the Stockhom County Council gave a general presentation of the code of conduct the Swedish County Councils use for CSR-related matters in the procurement process. Anna then shifted over to describe the development of environmental and social requirements used in the procurement process of pharmaceuticals.
These requirements are not the same as the ones in the code of conduct, although the County Councils have the ambition that the code will be applicable completely in the future. We then met Maria Azzopardi from Miljöstyrningsrådet (in English: The Swedish Environmental Management Council) who presented the environmental and social requirements used for pharmaceutical procurement in more detail.
And after Maria we had Daniel Paska and Achim Richarz from Sustainia presenting how you can work with environmental and social issues in the supply chain. Sustainia has worked with the supply chain with several companies within different industries, including the pharmaceutical industry. Sustainia has also help SLL performing two supplier audits in China. They gave us a lot of good advice on how strong supplier development programs should look like. I presume that several of the pharmaceutical companies in the audiance recognized the different parts of such programs. For reference you can follow these links to Pfizer's EHS External Supply program or a description on how AstraZeneca works with their suppliers.
The concluding remarks were delivered by myself (as chairman of LIF's environmental committee) and by Karin Ekholm (from AstraZeneca and the chairman of LIF's committee for tender businesses). We were both very pleased with the discussions during the day and appreciated the high quality presentations. Karin stated clearly that actions were needed, it should be obvious to anyone who had seen Cecilia's slides. And I restated LIF's position: We welcome requirements, if they are fair, reasonable and in line with the public procurement regulations, e.g. LOU (Lagen om Offentlig Upphandling). LIF's position also clearly states that requirements should be followed-up, otherwise "honest and serious" companies may suffer compared with "cheaters".
I also said that although LIF welcome differentiating requirements in the procurement process, this is definitely not the only tool to manage the type of situations described by Cecilia. It might not even be the most effecive tool. Remember that the procurement process only covers less than 20% of the pharmaceutical market. The major part of the market is the products prescribed by physicians directly to patients, and handed out at the pharmacy. I strongly believe that implementation of green incentives in this piece of the market is even more important. Read about green pharamceuticals and green economic incentives on my previous blog posts, e.g. May 17, May 11, and April 20.