Innovations in CSR for pharmaceutical industry | http://www.expresspharmaonline.com/20120229/pharmalife01.shtml
As companies scramble to counter negative public perceptions, CSR has taken on a new appeal. Dr Prem Jagyasi, a global consultant and expert and a chartered consultant, analyses the CSR trends in the pharmaceutical sector and focuses on innovative strategies for effective CSR as well as importance of CSR in retaining consumer loyalty
The most talked about topic in the Indian business world today is Corporate Social Responsibility or CSR. It is believed that in India, CSR is being practiced since ages. However, the point to discuss is that do we really interpret the term as done globally or are we confined to our own beliefs by relating it to philanthropy. When it comes to pharmaceutical companies especially, working beyond philanthropy is important and it is an ideal approach for success, as there is a perception among people that pharma and healthcare companies often get high profits through high price products/services and unethical practices by some.
To start with, there is only one prime responsibility of any corporate – to make it profitable. However, since a corporate operates within an environment and with the society, it is inevitable that it can continue functioning productively or profitably if the environment and society do not effectively battle challenges. Hence, corporates have always supported environment, society and causes in some or the other way.
Hence, one might believe that CSR is being practiced for ages in India, but the fact remains that many still confuse CSR with charity. Thus, to begin with, let us first get our facts clear that charity and CSR are two completely different concepts, but are unfortunately often mixed together and used simultaneously even in the corporate world.
Charity is as simple as doing something for free for the well-being of the society, whereas, CSR is strategic and much more complex. Hence, it is difficult to conceptualise and implement, but far more fruitful in terms of social benefits as well as ROI for corporates. E.g. if an individual donates old clothes to those less privileged; a company donates an old IT system to a school or a research institute; a corporate firm donates a certain amount of money to a local orphanage or old age home etc. are all examples of charity. On the other hand, CSR should preferably be linked up to the core business of the company i.e. while doing some good for the society the company actually does good for its business as well.
CSR is a strategy where corporates integrate social, environmental or other important concerns in their business strategies on volunteer basis. It should be a part of company’s overall business strategies. For the company, CSR is a beneficial business advantage with tax exemptions, while for the employees it acts as a moral boost for working in a company that values ethics and cares for culture.
Importance of CSR to pharma industry
Healthcare and pharma companies are often criticised by people as a consequence of escalating healthcare prices and increase in healthcare fraudulent cases. Collecting money from the healthcare policy illegitimately, commonly termed as Medicare or healthcare fraud is at its high in recent times. Thus, as mentioned before, there is a common public perception that pharma and healthcare companies profit immensely and most of the times through high prices/charges and unethical practices by some. Therefore, it is necessary that pharma and healthcare firms improve their image and strengthen their brand. As companies scramble to counter negative public perceptions, CSR has taken on a new appeal. It is today one of the finest ways to give back some good to the society and at the same time enhance business.
Some common benefits of CSR are: Increased sales and market share; Strengthened brand positioning; Enhanced corporate image; Increased ability to attract, motivate, and retain employees; Decrease operating costs; Increased appeal to investors and financial analysts.
Some facts that support the above observations are: 83 per cent of the people will trust a company more if it is socially responsible — USA TODAY
80 per cent of young professionals are interested in securing a job that has a positive impact of the environment — MONSTER TRACK Recruitment Survey
90 per cent of young professionals would prefer to work for an environmentally friendly employer — MONSTER TRACK
50 per cent of young professionals would turn away from an employer that lacked good CSR policies — Personneltoday.com
Looking beyond the conventional
For the pharma companies, CSR can be altogether a different approach, as they can apply their knowledge of science, expertise and technology to address critical healthcare needs. This can be achieved through innovative partnerships with governments, healthcare professionals and NGOs.
For example, for enhancing healthcare access, Abbott India recently entered into a partnership worth `7.6 crore with PATH, an international non-profit organisation that creates sustainable, culturally relevant solutions, enabling communities worldwide to break long-standing cycles of poor health. The partnership is to advance a cost-effective strategy to fortify rice to address micro-nutrient malnutrition. By sharing Abbott’s expertise in science and technology, this initiative aims to initially benefit five lakh people through public sector food distribution programmes. The company also supported 93 projects with Lifeline Express, a mobile diagnosis and treatment train, to provide access to medical services and treatment for around four lakh Indians in rural areas that otherwise have limited access to hospitals and qualified healthcare professionals.
Abbott worked closely with the Ministry of Health and Family Welfare; Ministry of Consumer Affairs and the Ministry of Women & Child Development to advance the safety and quality standards pertaining to food laws. It also developed and launched a flavoured syrup-based preparation of Divalproex for epilepsy patients who cannot take tablets.
Partnering in healthcare initiatives is another effective CSR strategy. Some of its benefits include: Promoting wellness of community; Developing relationship with community; Increasing brand loyalty and brand recognition; Direct consumer relationship through education programmes; Association with government bodies.
For the research-based companies, CSR is a fully integrated element of strategy and operations. Such companies undertake several activities related to healthcare, and thus there is a scope of an effective CSR in all the initiatives related to R&D including drug development and supply chain, clinical trials, etc.
For example, undertaking clinical trials is integral to the development of a new medicine. However, conducting clinical trials for chronic diseases such as HIV/AIDS presents an ethical challenge as life-long treatment is required. In low and middle income countries, it would be irresponsible for any company to sponsor an HIV/AIDS trial and allow patients to be initiated on to therapy, without assurance of continued supply of that drug following the study-end. Thus, company undertaking such trials should take the responsibility of life-long treatment of the patients undergoing such trials.
Further, access to healthcare is a global issue that needs to be addressed immediately and a lot of onus is on the pharma companies to take an initiative to address this issue. Some critical diseases like HIV/AIDS currently affect an estimated 40 million people worldwide and two thirds of these are in countries of sub-Saharan Africa. For a region facing innumerable societal challenges – inadequate health services, lack of infrastructure, a shortage of skilled healthcare workers, to name a few – it is no wonder that the global HIV/AIDS community calls for free drugs and for companies and individuals to donate funds as immediate fixes to such a pandemic problem.
In one such initiative, Roche’s technology transfer programme few years back enabled it to share its technical expertise with local generic manufacturers in the least developed countries and sub-Saharan Africa. Roche provides eligible manufacturers with on the-ground technical guidance to support the production of saquinavir, a Roche HIV medicine. Through this initiative, the company is helping to strengthen and expand manufacturing capabilities and capacities across Africa to begin to produce their own medicines in the future.
Employee engagement for developing CSR
For developing effective CSR strategies one needs to first understand the local scenario and analyse the trends witnessed. One needs to identify key challenges, which can be addressed effectively through CSR. Aligning corporate values, offerings and brand strategies is important for developing CSR strategies. Another important aspect for successful CSR is employee engagement.
Involving employees right from the beginning is advisable. Role of employees should not be merely limited to execution, but their inputs should be valued and can be incorporated right from the brainstorming session that determines areas that need to be prioritised to the roadmap that needs to be followed. This helps in inculcating pride in employees for the company, and making them more sensitised participants while contributing towards the CSR objectives of the company.
To conclude, one can say that there is a need for pharma companies to have focused CSR initiatives for social development and economic growth of the country. Pharma companies need to contribute towards society by involving themselves in activities in the field of healthcare, education, and other environmental and civic initiatives, and should try to delineate these activities from business. CSR is a good initiative to drive growth and empower people but it should be driven by ground realities. Pharma and healthcare companies need to look beyond conventional approach to develop effective CSR.