Reports

Novartis Pakistan – Company Profile Report

by Ravi Magazine · Published 1st May 2015 · Updated 28th June 2015

NOVARTIS

Novartis is a world leader in the research and development of products to protect and improve health and well-being. Their name, derived from the Latin novae artes, meaning “new skills,” reflects their commitment to focus on research and development to bring innovative new products to the communities they serve. Their mission is to bring value to patients and customers. They want to have a positive impact on people’s lives and to discover, develop and successfully market innovative products to cure diseases and enhance the quality of life. In addition, they want to provide a shareholder return that reflects outstanding performance. They also want to build a reputation for an exciting workplace where people can realize their professional ambitions and where creativity is encouraged. Their goals are based on the following core values:

External focus

“We try to keep a step ahead of what our customers want and a close eye on what our competitors are doing.”

Innovation

“We have the patience and the skills to gain professional competence and adopt a wider perspective. It is from this platform that we take the initiative, take calculated risks, and set out to do new things in new ways.”

People

“The future of our company is in our hands. We have excellent people committed to values such as candor, trust and integrity. Through teamwork and cooperation, we enhance learning throughout the organization.”

Performance

“We set ambitious targets, benchmarking ourselves against peers, and striving always for ‘best practice’ levels of performance. We look to reduce bureaucracy and risk-averse behavior.”

Corporate Merger

On 7 March 1996, the news struck the business world like a thunderbolt. Sandoz and Ciba, two proud Swiss-based companies with almost three hundred years of tradition, have agreed to become one. The creation of Novartis, as the new company was called, was at that time the largest corporate merger in history.

Preceding the merger were months of top-secret negotiations and a meeting of the minds on a bold strategic move. “The globalization of markets, and therefore of competition, is taking on gigantic proportions,” explained Marc Moret, Chairman of the Board of Sandoz. “And the long-term success of the company depends to an ever greater degree on being among the best in our fields of activity.”

Alex Krauer, Chairman of Novartis and former Chairman and CEO of Ciba, explained the impact of the merger: “Strategically, the new company moves into a worldwide leadership position in life sciences. Novartis holds the number two position in pharmaceuticals, number one in crop protection, and has tremendous development potential in nutrition. The strategic focus on life sciences requires the de-merger of the Specialty Chemicals Division of Ciba and the Construction Chemicals of Sandoz.”

With the approval of the U.S. Federal Trade Commission on 17 December 1996, the last regulatory hurdles for the merger were cleared.

“There is a superb strategic fit between our two companies, which intensifies our market power and unlocks resources for further expansion,” said Daniel Vasella, now Chairman and CEO of Novartis. “We will now move forward to build our new company based on a common spirit of entrepreneurial energy, teamwork, and enthusiasm for our new future.”

CORPORATE CITIZEN

In addition, Novartis wants to be known for being a responsible corporate citizen. They do everything they can to operate in a manner that is sustainable: economically, socially, and environmentally – in the best interest of long-term success for their enterprise. In addition, they place a premium on dealing fairly with employees, commercial partners, government authorities and the public. Their Policy on Corporate Culture includes the principles of the UN Global Compact while their Code of Conduct covers ethical and legal behavior, including consideration of stakeholder interests, professionalism, and fair, courteous and respective treatment of our employees. Their Health, Safety and Environment Protection (HSE) Policies express their commitment for conducting their activities with respect for the health and safety of their stakeholders and the protection of the environment. The principles articulated in these documents are binding for all of their associates, and all managers are required to monitor compliance.

Partnership with United Nations

“To unite the power of the markets with the authority of universal values.” That is the goal of the Global Compact, a UN initiative that seeks to safeguard sustainable growth in today’s global economy.

The UN Global Compact promotes core values for meeting the socio-economic needs of people around the world. It asks for the partnership and commitment of multinational corporations to work with the UN in sustaining open markets and in finding solutions to social issues.

Novartis has joined with the UN and other corporate partners and organizations (i.e. NGOs) to support the Global Compact. They consider the principles set forth in this compact to be important building blocks for a free and prosperous world economy and essential for sustainable economic and social progress.

The compact sets forth nine principles in as follows:

Human Rights
· Support and respect the protection of human rights within the sphere of our influence
· Ensure that our own operations are not complicit in human rights abuses

Labor
· Freedom of associations and the effective recognition to collective bargaining
· Elimination of all forms of forced and compulsory labor
· Effective abolition of child labor
· Elimination of discrimination in respect of employment and occupation

Environment
· Support a precautionary approach to environmental challenges
· Undertake initiatives to promote greater environmental responsibility
· Encourage the development and diffusion of environmentally friendly technologies
As a corporate partner, Novartis is asked to make a clear statement of support for the Compact and to post an example of progress made or lessons learned in implementing the principles on the UN Global Compact website at least once a year. They are also asked to engage in or support partnerships with UN organizations by undertaking activities that implement the principles of the Compact, such as eradication of poverty.

StakeHolder’s Dialogue

In the era of globalization, Novartis faces an increasingly complex situation because innovation can sometimes lead to risks, costs and imbalances that extends beyond national borders. Novartis cannot solve these issues alone and so it aims to build partnerships with other stakeholders such as the various public institutions, international organizations, and the private sector. The co-operation with them can lead to a more sustainable development, which in this case means the more equitable sharing of the benefits of innovation.

Novartis aims to maintain an active role in the multi-stakeholder dialogue because effective collaboration with other stakeholders can contribute to the drawing of a framework that can clarify uncertainties and prevent problems. A mutual goal could also be achieved that would be unattainable if each actor were working alone. In April 2001, Novartis, in collaboration with the UNED Forum, a UK-based NGO, held a series of workshops aimed to develop a framework for various types of multi-stakeholder processes which allows for transparent, equitable, democratic and gender-balanced dialogue agreeable to all stakeholders and adaptable to various situations and issues.

A stable social and political framework is essential for the long-term sustainability of Novartis’ businesses, hence, out of enlightened self interest, Novartis is working together with leading public and private organizations to improve the health of people living in the developing world. This public-private partnership can better utilize the resources and strengths of each partner. For instance, in a global effort to eliminate leprosy, the Novartis Foundation for Sustainable Development engages in programs in which Novartis provides the medication for free while the World Health Organization (WHO) and other institutions attend to the distribution, patient education and medical follow up. In endemic malaria areas, Novartis provides its innovative malaria drug at cost to the WHO.

“The collaboration with other stakeholders provides stability and predictability for the peaceful resolution of conflicts. Establishing a level of mutual trust, respect and understanding of each one’s needs is a requirement for any public-private partnership. We, at Novartis, believe that this is an important factor for a successful and sustainable development,” says Dieter Wissler, Head of Novartis Communications, during a speech at the World Bank Forum in Berlin.

These are pioneering initiatives from a pharmaceutical company that help contribute in maintaining and improving people’s lives.

Benchmarking Profiles

Innovest Strategic Value Advisors

Novartis received a rating of AA, ranking number four out of 29 pharmaceutical companies in this sector. As a result, Innovest projects that Novartis will out-perform the sector going forward because of below average risk, above average environmental management capacity, and above average engagement in environmentally favorable businesses.

Sarasin

Sarasin’s sustainability profile of Novartis reported that our clearly structured EMS is exemplary in the industry for identifying areas of concern, setting goals, reviewing results and acting to improve. Sarasin also added that Novartis’ relationships with competitors are above average for the pharmaceutical industry.

SAM Research

Strong performance in all three dimensions of corporate sustainability places Novartis amongst the leaders in the pharmaceutical sector. In key economic areas such as corporate governance and risk management, Novartis shows above average performance. By operating a comprehensive and effective risk and crisis management Novartis reduces risks throughout the value chain related to physical or chemical incidents, product emergency, environmental incidents, company property and reputation.

Storebrand Investments

Novartis scores well above average when its environmental performance is analyzed together with other companies belonging to the pharmaceutical industry. In addition, they also score well above average in all of Storebrand’s five social indicators, which demonstrates commitment to the UN Global Compact and the UN Declaration on Human Rights.

“ethos” Swiss Investment Foundation for Sustainable Development
ethos´ ranking of Novartis in its sustainability matrix includes environmental criteria such as management and production, in addition to social issues related to employees, civil society and shareholders.

Measuring and Monitoring their Environmental Impact

Environmental protection has long been a focus for Novartis. Over the last several decades, they have achieved major reductions in the amount of emissions their operations release into the air, water and soil. This progress was driven by growing industry awareness that lower emissions correspond to less material used, lower costs and higher profitability, as well as growing societal concern about pollution levels which resulted in increased pressure from communities and authorities.

The 70s and 80s saw major emission reductions when Novartis first undertook end-of-pipe measures (air-cleaning filters and wastewater treatment facilities) to reduce emissions. Since then, they made process improvements that reduced the formation of waste, emissions and by-products during manufacturing. As a result, the air and water around their sites are much cleaner than they were 20 years ago. Near a major production site in the city of Basel, Switzerland, residents can again swim in the Rhine River that flows through the middle of the town.
Environmental Impact
They continually monitor and strive to reduce the environmental impact of their products and new technologies, including collecting emission data to assess their impact on the environment. Using a scientific method known as the Eco-indicator95, they measure:

Eutrophication – over-fertilization of aquatic ecosystems caused by nitrate and phosphate run-offs and by NOx air emissions.

Acidification – atmospheric acids caused by NOx and SO2 emissions from burning fossil fuels and are deposited directly onto the earth’s surface or fall as acid rain.

Greenhouse Effect (Global Warming) – when the sun’s heat is trapped in the earth’s atmosphere by “greenhouse gases” such as CO2, methanes, chlorofluorocarbons (CFCs and H-CFCs) and nitrous oxide.

Winter Smog – caused by SO2 and particulates in air emissions.

Summer Smog – caused by the reaction of sunlight with VOCs and NO2 air emissions from industrial and non-industrial sources.

Heavy Metals – poisonous to human beings and eco-systems.

Ozone Depletion – depletion of the earth’s ozone layer due to CFC emissions.

Their 2000 data shows that they reduced their environmental impacts in all areas, in part due to reduced production and through reduced energy use. Major impacts still come from CO2, NOx and SO2 air emissions caused by energy consumption. These contribute to the greenhouse effect, summer and winter smog, and acidification. They are continuing efforts to reduce energy use.

Their impact on water quality is somewhat lower (eutrophication, acidification and heavy metals), and they have reduced their impact with heavy metals, perhaps the most critical impact, to the smallest of all.

Ozone depletion, caused by CFC emissions, is a significant impact for Novartis. Since CFCs do not occur naturally, their emissions are the major factor in ozone layer depletion. During 2000, they reduced this to 1.78 tons in absolute terms. Because eliminating CFC emission is a major political target, the Eco-indicator 95 method weights these heavily.
Novartis commissioned an independent scientific study of their measurement methods, which determined that our effort to convert raw data into environmental impacts provided a helpful qualitative understanding of the impacts and suggested some adjustments to improve the quantitative aspects of their analysis.

Health and Safety

Caring for their Employees and Neighbors

Enhancing and Protecting Health

In the context of our Novartis Health, Safety and Environment program, “Health” means the well being of our employees. They are committed to providing their employees with safe workplaces and to offering programs that promote and improve their health and well being.

Through health protection measures, they try to identify and reduce any injuries and occupational illnesses that could arise out of the workplace as a result of exposure to physical, chemical, biological or ergonomic factors. They maintain thorough risk assessment and management practices, including medical examinations.

In addition, they implement health promotion activities that expand the view of occupational health beyond the workplace to related environmental, behavioral, and life-style factors. They offer a variety of initiatives and programs to maintain the health of their employees, all the while respecting personal views and privacy. Depending on the size of the site and the activities performed there, a full- or part-time occupational medicine worker is available to all associates, offering services that include workplace assessment, health promotion and counseling.

Safe Products and Production

Protecting the safety of their employees, their neighbors and the environment is an integral part of their operating responsibilities. At Novartis they have concrete systems in place to ensure that all our products and operations are safe and environmentally compatible from the research and development phase, through the production and distribution phase.

Each of their business units carefully assesses potential risks to humans and the environment through systematic risk analyses, which are compiled into a risk portfolio. These portfolios provide an overview of the major risks and their potential impact. It also outlines control measures and ongoing programs for improvement.

If a serious accident would occur, their emergency management system (NEM) is in place to respond and reduce the consequences of the impact. They also conduct a thorough investigation of any incident to identify the causes and learn how to avoid similar accidents in the future. Regular audits of sites ensure that measures to reduce and control risk are in place.

They also pay specific attention to the safety of their employees. Reducing accidents is now a top priority for them. They have instituted training programs for employees and set targets for each business unit to work toward our goal of zero accidents.

Alone and Helpless?

AIDS Orphans in Tanzania

In many developing countries, AIDS is not only one of the greatest health problems, but is increasingly a social problem as well. Children whose parents die of AIDS-related illnesses face the worst imaginable opportunities in life. A local project called Humuliza, sponsored by the Novartis Foundation and Terres des Hommes Switzerland, has been providing psychological care for AIDS orphans in the region of Kagera in Tanzania for three years now.

In 2000, there are already one million AIDS orphans in Tanzania. This means that one in 15 children under the age of 15 are orphans. In the Kagera district, between one-third and one-fifth of the children have lost one or both parents to AIDS. This situation confronts a child with immense psychological and social problems because death brings a loss of emotional security and confidence. A 16-year-old orphaned girl said:
“The worst thing is that you’ve got nobody you can trust with your problems. Also, I have to be responsible for my younger brothers and sisters and do boy’s work. I have to go and work for other people because my grandparents can’t fully provide for me. Sometimes all of the work just gets too much, and then I cry out in pain – but also because I miss my parents.”

The Humuliza project conducts 14-week programs with orphans with the aim of stabilizing the children psychologically and socially. The program is based on group interventions and also a “child-to-child” approach. This recognizes that children who have similar experiences can benefit from exchanging information and understanding that their situation is not unusual and is in no way a “failure.” This approach also takes account of the fact that young people are much more willing to accept emotional support from people of their own age than from adults.

There are also some income-generating methods that the project uses. For example, the project offers the orphans to work for their breadwinners, such as grandparents, and receive 150 Tanzanian schillings for each completed project. This enables the children to make a contribution to supporting themselves, while at the same time promoting cohesion between the generations. In some cases, the project also pays school fees. As a 14-year-old girl said:
“I am proud that I was recently able to buy a bed sheet with money that I earned myself.”

These are just some ways to encourage the orphans’ development, growth and promote their abilities.

MALARIA

A Deadly Disease

Malaria is one of the world’s most serious tropical diseases and infects up to 500 million people each year. Although some types only make you feel ill, causing fever and sweating that returns at regular intervals for years if the disease is not treated properly, the most serious type can kill. For example, every year close to 3 million people die from malaria, and every 30 seconds a child somewhere in the world dies from the disease.

Around 40 years ago, most doctors were confident that malaria was beaten and no longer a serious health problem. The disease was well controlled in areas where it had once been very common, and available medicines worked well. However, in recent years, there has been a sharp rise in the number of malaria cases. Africa is terribly affected and accounts for over 90% of reported cases of malaria. About 10% of hospital admissions are for malaria, as are 20-30% of doctors’ visits. In addition, some experts foresee as much as a 20% annual increase in Africa’s rate of malaria-related illness and death. No Western disease is nearly so prevalent. Each year, the world over, malaria destroys, through premature death and disability the equivalent of at least 35 million years of healthy, productive human life.

Children are especially vulnerable to malaria. In Africa, where 80% of malaria cases are treated at home, the disease kills one child in twenty before the age of five. The World Health Organization (WHO) advises against taking babies or young children on holiday to malarious areas, particularly where there is drug resistance to the most dangerous form of malaria. Pregnant women are also especially at risk. In highly malarious parts of Africa, women are more than four times as likely to suffer clinical attacks of malaria during pregnancy than at other times; but only half as likely to survive bouts of life-threatening illness. In addition, having malaria, especially when combined with inadequate nutrition, causes many complications of pregnancy and stillbirths.

The rise of the disease is due to a number of factors, such as high rainfall in recent years, increased migration, a reduction in the use of DDT in vector control, and the progressive development of resistance to many of the drugs that once controlled the disease so successfully. As a result, malaria kills more people today than it did 30 years ago. This imposes significant costs on the local and national economies. For example, early records of malaria cases in Europe in the late 19th and early 20th centuries show that malaria was a severe inhibitor of economic development and caused large economic costs. Currently, the presence of malaria in selected Southern African countries could cost as much as US$1,000 million, or 4% of GDP.

Novartis has developed a new combination drug for malaria. Although new to the Western world, the medication, derived from the plant Artemesia, has been used for centuries in China to reduce fevers and other symptoms associated with malaria. In addition, as part of the Roll Back Malaria initiative, Novartis supplies at cost the new therapy to the WHO for use in developing countries.

Novartis Foundation in France

Due to agribusiness spin-off, Novartis Foundation has refocused its scope of activity in the area of health environment.

It now addresses new issues in French society due to longer life length, to shortening of working life, to overall more fragile social links.

Its objective is to provide persons in difficulties due to age, illness, handicap or family environment, with personal and social support.

Basically, Novartis Foundation sponsors innovative projects, setting up networks linking together different types of organizations (such as medical, patient, educational or sports organizations) in order to provide a continuing support and nursing to such persons, and help them to find new interests and projects in their life.

Through sponsored projects, Novartis Foundation wishes to identify and experiment with local partners, such as organizations, communities, or public institutions, new social jobs in the area of services and network coordination.

New technologies will be used in the process of network setting in order to promote new social links (notably for old people), or new working habits.

Here are two examples of projects newly sponsored by Novartis Foundation in France:

Psychological assistance to breast cancer patients through expression groups, a quite innovative approach in France, which will be launched by Institut Curie in Paris: Novartis Foundation will finance the job creation of a psycho-educational assistant who will be an intermediate between patients and medical team. This assistant will also develop an external network in order to help patients to reintegrate their social environment after their treatment.

Improved assistance to aged and dependant persons by upgrading the job and qualification of home-helpers. Novartis Foundation finances additional training programs and management support for 150 employees supervised by Archipel Domicile, an organization in Paris, which provides more than 200 couples, aged 82 or more with daily assistance and services.

School-coaching for young autistic children: Novartis Foundation helps experiment an educative approach with an organization called First Classes, which aims at integrating autistic children into ordinary classes as early as nursery school, each child being coached all day long by a full time employed psychologist.

Product Stewardship

Their care for their products does not end with the transfer of ownership. Product stewardship is the responsible management of a product’s impact on health, safety and the environment throughout its life cycle. It is an ongoing process extending from the birth of the product’s initial concept, through its design, assessment, manufacturing, distribution, use, recycling, disposal and withdrawal.

Once a product leaves their hands, their efforts focus on customer support and service, education, continued monitoring and, above all, communication with their stakeholders.

Good product stewardship goes beyond merely preventing negative impacts. It also helps to enhance the beneficial impacts of their products, ensure their accessibility and improve their effectiveness, thereby contributing to improved customer health.

The Istanbul Foundation for Culture and Arts

A large company has a responsibility to the community in which it operates. In practical terms, it is often met in these categories: Education, arts and culture, and environment. Novartis Turkey knows its responsibility to the community and has consistently sponsored an event at the Istanbul Foundation for Culture and Arts for the last 20 years.

Novartis gives high priority to quality and social-cultural responsibility, in addition to supporting the arts and culture in Turkey. The Istanbul Foundation for Culture and Arts (IFCA), established in 1973 to create an international medium of cultural exchange in all disciplines of art through Istanbul festivals, received the UNESCO Award for its achievements. IFCA is committed to showcasing the finest examples of artistic creativity in classical music, ballet, contemporary dance, opera, jazz, cinema, drama and visual arts from Turkey and abroad. Every year an increasing number of famous artists and orchestras join the festival.