A growing industry concern?
While in the past, much of the discussion around sustainability in the pharmaceutical industry rightly focused on efforts to minimize the environmental impact of drug production, the needle has now shifted. There are signs that companies not only understand that it represents one of the world’s biggest challenges moving forward, but also that they are starting to incorporate sustainability practices into a much broader suite of operations.
The old argument that this highly regulated sector’s priority should be firmly on producing essential life-saving and life-changing medicines for patients and leave other much-more highly polluting industries to address the situation no longer holds sway.
Using case studies and interviews with expert representatives from companies operating across the pharma value chain, this report will investigate what the industry is doing to establish and maintain credible sustainable strategies in several phases of the product lifecycle.
As Peylina Chu, Executive Director of Healthcare Plastics Recycling Council, and Vice President of Antea Group USA, points out, sustainability has evolved into Environment, Social and Corporate Governance (ESG) to address all business aspects.
Jos Dingemans, Manager Environment at Aspen Oss B.V. argues that while the pharmaceutical industry has several challenges which are equally important, it has to take the issue of sustainability very seriously “as a pre-condition for future operation; there is no either or. “The fact that the sector produces life-saving drugs is one of the many sustainability aspects; and in fact, a positive aspect,” he adds.
Jean-Yves Stenuick is Safer Pharma Programme Manager at non-profit organisation Health Care Without Harm (HCWH) Europe, which is a network of European hospitals and healthcare providers, healthcare systems, local authorities, research/academic institutions and environmental and health organisations with a mission to transform the European healthcare sector so that it reduces its environmental footprint.
He says that like those companies operating in all other industries, pharmaceutical companies have a moral responsibility to operate sustainably throughout their value chain.
“It is incompatible to develop solutions to heal patients while polluting the environment when we know the disastrous impact environmental pollution has on public health,” he says. “Our health and the health of our environment are interconnected.”
‘Safer Pharma’ is one of HCWH’s five interconnected programme areas – chemicals, food, healthcare and procurement being the others – and Stenuick lays down some stark statistics regarding pharma’s carbon emissions, seen as a major contributor to greenhouse gas emissions and of course, global warming. “The pharmaceutical industry emitted approximately 52 million metric tons of CO2e globally in 2015,” he says, pointing to a study published in March 2019 on the pharma industry’s carbon footprint and the relative impact of its major players.
The study indicates the pharma industry’s emission intensity – defined as the total scope 1 (direct emissions) and scope 2 (indirect emissions from purchased energy) emissions in metric tons of CO2e divided by a company’s total revenues in US dollars - was about 55% higher than that of the automotive industry in 2015. “This study also shows a high level of variability among the top 15 pharmaceuticals companies, which suggests contrasting environmental practices within the sector.”
He says while the study only focused on scope 1 emissions (direct emissions) and scope 2 emissions (indirect emissions from purchased energy), the pharmaceutical industry also makes an important contribution to scope 3 emissions (value chain emissions). “In 2015, it was estimated that pharmaceuticals made up 11% of England’s health and social care footprint, representing the largest component of the system’s carbon footprint for the procurement of goods and services.”
Stenuick at HCWH is of the opinion that the sustainability of the pharmaceutical industry has received little attention in comparison to other sectors.
“Major challenges include packaging, waste production, transport, chemical use, water pollution, energy consumption, sourcing of raw materials, and disposal,” he says. “The sector’s heavy reliance on fossil fuels carries significant impacts in terms of greenhouse gas emissions and air quality.”
Ms Chu at HPRC says that across several industries, the use of plastic packaging has very high visibility right now and identifies it as an area in which the pharmaceutical industry needs to act. “Although much concern is focused on consumer packaging, the healthcare plastics packaging industry is significant at 14.6 billion pounds in 2020 and is forecasted to grow to 18.8 billion pounds in 2025,” she says.
“While plastics have greatly improved global healthcare, the growing environmental impact cannot be ignored.
"To mitigate this impact will require cross-functional, multi-stakeholder engagement and collaborative action, along with regulatory and policy drivers to create incentives and accelerate progress.” Dingemans at Aspen Oss B.V. identifies water and energy consumption at production facilities; carbon (CO2) emissions in manufacturing and supply chains, including business travel by the sales force; security of supply; the reduction of hazardous chemicals/solvents and Pharmaceuticals in the Environment (PiE) as major challenges for the industry to address.
By far the largest contribution to pharmaceuticals entering the environment is from patient excretion, where drugs pass through bodies and into waterways. The second largest is the improper disposal of medicines such as throwing unused tablets or liquids into the sink or flushing down the toilet. Pharmaceutical waste from manufacturing facilities is a relatively smaller global issue although it is accepted that it can present huge problems for local communities living close to such plants.
Increased awareness has prompted further investigation, as well as calls and proposals for action to reduce emissions to the environment, in particular to water but also to soil. Stenuick at HCWH says discharge of pharmaceutical residues into wastewater during the manufacturing process is a key environmental challenge for the pharmaceutical industry.
He adds that the level of pollution can be shockingly high, citing a 2007 study which found that a stream near Hyderabad, India, with discharged water from manufacturing, had concentration levels of ciprofloxacin -- a common broad-spectrum antibiotic -- that exceeded levels toxic to some bacteria by over 1000-fold. "This is not only an issue in developing countries, downstream pollution from manufacturing facilities has also been observed in the EU,” Stenuick adds.
When it comes to the western world, the issue tends to be amplified by the media on a stop-start basis; in 2009, the Associated Press ran a series of articles in the US reporting concentrations of a variety of pharmaceuticals found in rivers and many local newspapers picked these up and republished them.
More recently in Europe, there have been a series of papers both on pharmaceuticals and antibiotics that have reported on concentrations measured in rivers. While both sets of reports were on the surface alarming, Dr Dan Caldwell, Toxicology Fellow, Johnson & Johnson argues that they contained very little risk context in terms of explaining what these concentrations meant as far as human and environmental health are concerned.
He says that when it comes to aqueous concentrations, “the scale we are looking at is tiny.” “If we take ibuprofen as an example, the therapeutic dose is 200mg tablets,” he says. “If you take two tablets with a litre of water, the concentration is 400mg/litre. Ibuprofen has been measured in US and European rivers at about 0.3µg per litre so that is approximately a million times below the therapeutic dose. I think the main concern for many people is the mere presence of these pharmaceutical compounds in the environment.” Caldwell says that as far as industry preparedness goes, several companies have been addressing the whole idea of PiE for a decade now and more recently as the industry brings together several resources: “We have more of a unified approach to the issue and I think that’s helped everybody, at least in understanding the underlying issues.”
Steve Brooks, Advisor to the Antimicrobial Resistance (AMR) Industry Alliance says PiE can sometimes be a difficult subject to talk about when many members of the public may only have a basic concept of what is actually occurring.
“Trying to explain, for example, to a family member that pharmaceuticals might be present in water courses doesn’t sound right,” he explains. “Their natural question would be ‘why should there be pharmaceuticals present in a local river?’ or worse still, they may have legitimate concerns about drinking water. It’s fairly hard to get past that point.”
He adds that the real issue is the concentration and what is the consequence of that concentration. “It’s a fairly challenging conceptual debate to have because we’re using terms like micrograms per litre and the headlines are saying things like ‘drugs in the drinking water’ and that is very concerning to people,” he says. “In regard to antibiotics, the AMR Industry Alliance’s job is to provide context and also to address the issue i.e. where we believe there are things that can be done to minimise concentrations that might find their way into water courses.”
According to the World Health Organisation, Antimicrobial Resistance (AMR) occurs when bacteria, viruses, fungi and parasites change over time and no longer respond to medicines making infections harder to treat and increasing the risk of disease spread, severe illness and death. For Brooks at the AMR Industry Alliance, there are many contributing factors to the development and spread of AMR, including inappropriate use of antibiotics (prescribed or taken when not needed, e.g. to treat a viral infection), lack of basic sanitation and hygiene (e.g. open defecation as still practiced in some parts of the world), poor infection control (for example in some hospital settings) and the presence of antimicrobial agents in the environment (a subset of PiE) from application and use in agriculture including aquaculture, manufacturing discharges and human and animal use and excretion.
Stenuick at HCWH says water sources contaminated with traces of drugs in the environment are another contributing factor to AMR.
Exposure to environmental sources of antimicrobial drugs is placing vulnerable populations at a higher risk of community-acquired AMR, he says.
“This is not only a concern in producing countries, however, as drug-resistant bacteria do not know borders and can easily spread around the world through trade and travel,” he continues. Brooks at the AMR Alliance says that antimicrobial resistance is a very significant health issue: “It affects every country in the world and it causes prolonged illness as doctors try to find treatments that will work, and sadly it causes many deaths – the estimates are something like 700,000 people a year dying from AMR.
“Projected estimates take that death toll much higher if AMR is not addressed. As a result of drug resistance, antibiotics and other antimicrobial medicines become ineffective and infections become increasingly difficult or impossible to treat.”
Ms Chu at HPRC – whose members include Thermo Fisher, BD, Dupont and Johnson & Johnson – describes the consortium of industry peers across the healthcare, recycling, and waste management industries as a success story of stakeholder collaboration across the healthcare plastics value chain. She says its work includes design guidance for manufacturers to enable recycling of plastic products and packaging materials, as well as guidance to educate recyclers on the feedstock opportunities with healthcare plastics.
HPRC has also kickstarted the HospiCycle programme; a step-by-step toolkit for hospitals to start and/or improve upon a plastics recycling program, integrate recycling practices into a patient care setting, and better understand the economic, regulatory, resourcing, and infrastructure nuances that come with it.
Individual firms in the pharma sector are now making sustainability pledges on a regular basis. In April this year, Lubrizol promised to not only reduce its greenhouse gas emission by 20% by 2030 but also to conduct water risk assessments at all its manufacturing sites on a biennial basis and to decrease the impact of its waste (including reducing scrap and increasing recyclability) by 10% by 2030.
And in its fiscal 2020 Corporate Responsibility Report, Catalent said it began its transition to clean energy sources, which it anticipates will result in significant emission reductions in fiscal 2021. The company also announced a 21.9% decrease in energy intensity compared to fiscal 2018, reflecting improved energy efficiency in manufacturing, and a growing renewable energy sourcing initiative.
Alliance to Zero
Eight pharma and biotech supply chain companies have founded the Alliance to Zero, a non-profit membership organisation with the aim of facilitating the transition of the pharma sector to achieve net zero emissions in line with the Paris Climate Agreement.
The founders of the non-profit membership association represent key parts of the pharma supply, including component suppliers, machine suppliers and assembly/manufacturing service providers, as well as those involved in primary and secondary packaging to final device assembly and even collection after use.
The Alliance to Zero says there is an urgent need to collaborate across the pharmaceutical supply chain, it says:
In addition, the Alliance to Zero says its founding companies recognise that proactive collaboration across traditional company boundaries is the way to develop solutions that will have broad acceptance and a positive impact on the pharmaceutical industry.
The Alliance to Zero intends to involve, connect and coordinate suppliers, pharmaceutical companies, manufacturers and service providers along the supply chain and engage with academia and non-profit organisations with similar aims.
Already, the alliance has started work on developing a roadmap detailing what a net zero emission concept for pharmaceutical manufacturing and supply chain would look like and the steps necessary to achieve it.
This foundational work also includes agreement on harmonized language and principles for the assessment and control of the total emission footprint for the final pharmaceutical products, as well as the company-specific responsibilities.
The founding members are Datwyler, Harro Hoflinger, HealthBeacon, Körber Pharma, SCHOTT, Schreiner MediPharm, Sharp, and Ypsomed Holding.
However, Stenuick at HCWH asserts that pharmaceutical companies that address sustainability issues actually mitigate reputational risks associated with revenue losses and gain a competitive advantage as buyers are paying increased attention to the sustainability of the products they purchase. “Norway and Sweden, for example, have adopted sustainability public procurement criteria for pharmaceuticals that reward companies that adopt measures to be more sustainable,” he says. “Operating sustainably also opens the door to sustainable investment funds, and integrating environmental, social, and governance principles that represent a growing market.” Jos Dingemans at Aspen Oss B.V. says societal acceptance is a key benefit of a sustainability drive, arguing that a company with a solid sustainable footing is a much more attractive destination for younger and future employees and is more likely to secure investment from financial institutions.
Peylina Chu at HPRC identifies fortified business resilience as another advantage, explaining that studies show companies with robust sustainability programs have been more resilient during the COVID-19 pandemic, as evidenced by ESG-focused funds largely outperforming classic indices throughout 2020.
“This outperformance is tied to the fact that a company’s ability to anticipate, respond, and recover from large market shocks is closely related to the level of integration of sustainable practices within the company,” she adds.
Ms Chu says regulatory compliance and license to operate is also improved, as environmental sustainability becomes mandatory through a variety of regulations and taxes, especially in Europe which has established the EU Circular Economy Action Plan, the European Green Deal, the European Climate Law, and has proposed a new plastic tax.
In terms of the investment community, Chu says there is ever increasing interest in sustainability and ESG, with Larry Fink, founder, chairman and CEO of BlackRock, the largest asset manager with $8+ trillion in assets under management, being “exceptionally vocal” in the past few years about the importance of climate change and ESG in business resiliency.
“In 2020, BlackRock announced a number of initiatives that places sustainability at the centre of their investment approach,” she explains. “With this shift in BlackRock’s strategy, a number of investment companies have followed suit, leading to a shift in the investment industry that places a growing emphasis on ESG as an important investment criterion.”
Dingemans at Aspen Oss B.V. says first of all, a company should look at its own impact and identify areas for sometimes transitional improvement and then set plans to realize these opportunities. “From there on, the company looks at its supply chain, at each level of the organization, for each decision to take and identifies areas for improvement,” he adds.
Dingemans also believes cooperation with significant suppliers and partners in the supply chain is vital, as are collaborations/partnerships between industry and academia: “The industry must be willing to learn and search for knowledge outside of its own playing field.” Ms Chu at HPRC is of the opinion that companies should start with a materiality assessment, surveying internal and external stakeholders to identify sustainability topics that are material to their operations. “For example, most biotech and pharmaceutical companies do not use a lot of water or generate a large volume of wastewater – therefore, water may not be a material aspect,” she says. “However, many stakeholders may be concerned about the amount of plastic packaging waste generated by a pharmaceutical company, and this area may be worthwhile investing efforts to reduce and recycle more plastic packaging materials.”
As the world continues to tackle the COVID-19 pandemic, this global healthcare crisis has inflicted immeasurable and long-lasting economic and social upheaval. With so many governments, populations and organisations preoccupied with managing and getting through this public health crisis, there is a valid concern that sustainability may be deprioritised.
However, Ms Chu suggests that the pharma industry’s response to the pandemic has generally been to continue supporting and investing in sustainability programs: “If anything, there has been a greater push towards integrating sustainable business practices into corporate strategy as operational and supply chain vulnerabilities have been exposed by poor governance and supplier engagement practices.” She adds that companies with strong sustainability leadership have recognized that many of the 2020 environmental crises, such as severe weather and wildfires, that greatly exacerbated the business disruptions from the pandemic have arisen from lack of environmental stewardship.
“COVID has re-emphasized the importance of pharma and has taught us that business travel can be avoidable as office work and meetings can be done remotely, cutting down CO2 emissions,” says Dingemans at Aspen Oss B.V.
“Ideally, the relocation of some technology will decrease the logistic footprint and impact the carbon footprint; this relocation will be done with innovation while considering safety and sustainability,” he says.
Brooks at the AMR Industry Alliance says he suspects and hopes that our COVID experience will make us better aware of and prepared to address and reduce the risk of development and spread of infectious diseases: “especially those diseases that may not be easy to treat (for example, when resistant to drugs).”
“I think as a result of AMR, the issue of PiE will remain a key, growing issue that garners attention from policymakers,” he continues. “My sense is there’s a lot going on with COVID and it correctly demands attention now, but I think nonetheless that PiE and its associated issues will remain a concern that will need to be addressed. I don’t think the COVID issue will dilute the focus.”
The issue of environmental sustainability within the pharmaceutical and biopharmaceutical industries is gaining ever more traction. Companies are starting to introduce such practices into their development, manufacturing and logistics operations, not just with the aim of hitting green targets but also of cutting costs, controlling expenses and gaining reputational value.
The ongoing COVID-19 pandemic has not only emphasized the central role the industry is playing to battle the virus and protect society and the economy, but also thrown into sharp relief the increasing focus of global governments and institutions on sustainability. The focus is very much on companies operating in the pharmaceutical sector to display their green credentials to win the trust of authorities who are introducing more and more regulations and restrictions to mitigate against environmental problems.
Whether the pharma industry still needs to do more to communicate its commitment to social and environmental issues is still open for debate.
Jos Dingemans accepts that in general, pharma is very focussed on compliance related to quality and has resources available for this: “As a company, being committed to sustainability and to have this integrated into your operational strategy is one major step. Another is to communicate this to all stakeholders involved so that it not only becomes the effort of an independent company, but a truly holistic approach for the industry as a whole.”
Ms Chu at HPRC says communications can always improve, including communication channels, content, reporting and disclosure: “Stakeholder engagement and collaboration is critical to making progress in sustainability, and industry and company-specific communications on the commitment, investment, and progress made in sustainability is the foundation for effective stakeholder engagement.” On behalf of CPhI, I would like to thank all of our contributors for taking part in this report - and a special thanks to our partner, Aspen API for their insights and support.
Gareth Carpenter, Editor - Pharma, Informa Markets
David Demailly, Commercial Director, Aspen API
David is graduated with a Ph.D. in Economics from the University of Lille in France where he continues to give lectures. He gained experience in several global Sales and Marketing roles within both Finished Dosages Formulations and Active Pharmaceutical Ingredients, working for originator business and generic business, companies like Teva, Merck KGaA and in middle size pharmaceutical companies as Theramex, Acino and Centrient. David is currently Commercial Director for Aspen API and plays an active role in the transformation of the pharmaceutical business with focusing on sustainability.
Jos Dingemans, Manager Environment, Aspen Oss B.V.
Jos is a chemical engineer with 35+ years of Environmental, Health and Safety experience. He started working for local public organizations and then transferred to the pharmaceutical industry. As an environmental engineer he worked on emission reduction programs (air and water), including in-process adaptations. Moreover, contributed in the development of the first Environmental management system (EMS). Followed by the role of level Safety Manager, where he developed the process safety management program and integrated Safety and Health into the EMS.
After a five-year break, being an environmental engineering teacher, he rejoined the pharmaceutical industry. This time leading a team of environmental, safety and industrial hygiene professionals, serving R&D, API production and end product manufacturing operations, later expanded with Hazcom and health services on four productions plants. Big Pharma acquired the company and he helped in the integration process.
He then became a policy advisor and lobbyist for the national chemical industry association. In his current role he is managing the environmental portfolio with a focus on developing the sustainability agenda.
Jos has been personally involved in sustainability all his life. It already started with his biology teacher explaining the meaning of ecology, choosing all the available environmental science curricula in University and currently still working and teaching the environmental field of expertise. He drives a hybrid car and at home he participates in a solar panel union. Some personal tips for a sustainable lifestyle: • Limit your meat consumption; • Flying for fun is the worst thing to do for the environment; • Use your bike every day; • Use green energy and insulate your house.
Dr Dan Caldwell, Toxicology Fellow at Johnson & Johnson
Dan has extensive experience in toxicology, environmental science, sustainability and risk assessment. He is a founding member of the NSF Water and Environmental Technology Center at Temple University and has been conducting research on pharmaceuticals in the environment and antimicrobial resistance for over 10 years. He is a Diplomate of the American Board of Toxicology and Certified Industrial Hygienist and has authored over 30 scientific and technical publications.
Steve Brooks, Advisor to the Antimicrobial Resistance (AMR) Industry Alliance
Steve also chairs the Manufacturing Work Group of the Alliance. He gained almost 37 years of pharmaceutical industry experience in the UK and the US with Pfizer in roles of increasing complexity, scope and responsibility. He has mentored many colleagues, formally and informally, developed and implemented major corporate programs and is a recognized EHS leader in the pharmaceutical industry.
Peylina Chu, Executive Director of Healthcare Plastics Recycling Council, Vice President of Antea Group USA
“I believe in helping companies ‘do good to do well’.” Peylina is a master at helping companies manage the business aspects of Environment, Health, Safety, and Sustainability (EHS&S). Recognizing that EHS&S management is much more than just compliance, and that these issues have the potential to seriously disrupt business, Peylina develops fit-for-purpose programs for clients that are proactive, tailored to the company-specific risk tolerance levels, and incorporated into company culture from the C-suite to the hourly employee. With her 20+ years of experience, she understands that in addition to traditional regulatory drivers, today’s companies must meet public and customer expectations, investor concerns and non-governmental organization demands. Peylina is a Registered Professional Engineer and leads the technology market segment at Antea Group. She serves as Executive Director for the Healthcare Plastics Recycling Council and as Chair of the Board of Directors for the Inogen Environmental Alliance, an alliance of global EHS and sustainability consultants.
Jean-Yves Stenuick, Safer Pharma Programme Manager - Health Care Without Harm (HCWH) Europe
Jean-Yves works at Health Care Without Harm (HCWH) Europe, the European arm of a global not-for-profit NGO whose mission is to transform healthcare worldwide so that it reduces its environmental footprint, becomes a community anchor for sustainability, and a leader in the global movement for environmental health and justice. He leads the Safer Pharma programme, which aims to reduce pharmaceutical pollution and limit its contribution to the development of antimicrobial resistance. In this position, he engages with members and stakeholders across Europe to develop knowledge and share best practice, as well as carry out policy advocacy work at the EU level to ensure a stronger EU environmental regulatory framework on pharmaceuticals in the environment.
