BUSINESS RESPONSIBILITY GUIDELINES FOR PHARMACEUTICAL SECTOR IN INDIA

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

2. OUTLINE OF PRESENTATION 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

3. 1. INDIAN PHARMA SECTOR: OVERVIEW • Ranked 3rd in volume and 14th 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

4. 2. REGULATORY ENVIRONMENT • 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) • Little or no coordination between regulatory agencies • Stringent GMP enforcement (Schedule M, D&C Act 1940) • Strict government price regulation (DPCO, 2013)

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

6. 3. PHARMA ASSOCIATIONS – KEY PLAYERS 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

7. Findings of a previous CUTS study (BRCC) 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

8. 4. WHY NVG FOR PHARMA SECTOR?(NATURE & READINESS) 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

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

10. NVG Principle I: Ethics, Transparency & Accountability [business should conduct and govern themselves with ETA] 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

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] Promote NVGs principles throughout the invert ‘supply-chain’ and ‘contract manufacturers’ Unused/date expired medicines disposal Drug recalls

12. NVG Principle III: EMPLOYEES’ WELL-BEING[Business should promote the wellbeing of all employees] 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

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] Adequate attention to mapping of ‘relevant stakeholders’ Development of a strategy for stakeholder engagement with special attention to: communities at risk, patients, PAP, etc.

14. NVG Principle V: HUMAN RIGHTS[Business should respect and promote human rights] 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

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

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

17. Principle VIII: INCLUSIVE GROWTH[Business should support IG and equitable development] 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

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

19. Key issues for consideration 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

20. Key question for discussions 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?

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

22. THANK YOU