Pharmaceuticals & Health Care

Risks and Opportunities

The production of pharmaceuticals requires considerable amounts of energy, water and raw materials. Active pharmaceutical ingredients (APIs), either synthetic or natural, are derived from a plethora of feedstocks, including plants, animals, fungi, bacteria, minerals and chemicals. Excipients, of which there are numerous types, are also made from a great variety of substances such as inorganic chemicals, carbohydrates, petrochemicals, oleochemicals and others. The materials used for packaging are similarly diverse. Companies need to be mindful of environmental impacts inflicted by related raw material extraction and processing such as deforestation, harvesting of endangered species or pollution. Further risks arise from insufficient effluent management during pharmaceutical production, human excretion of harmful residues during the use phase and inadequate final disposal. If managed well, the use of alternative raw materials and feedstocks can go a long way in easing pressures on the environment and local residents.

The industry’s carbon footprint is also a significant challenge as many stages of the pharmaceutical supply chain are very energy-intensive, from API and excipient sourcing to medicine manufacturing and distribution. Close collaboration with suppliers can thus make a major dent in companies’ emissions. In the social domain, manufacturing-related health and safety concerns affecting workers and communities call for stringent protocols and procedures. In addition, product and patient safety are of utmost importance and should be predicated on sound quality management. Rigorous standards in clinical trials and product testing as well as good manufacturing and pharmacovigilance practices are particularly vital in this context.

Providers of health care products and services face different yet somewhat related risks in their supply chains. Many medical devices require metals and minerals from controversial sources and their extraction has been linked to incidents of child and forced labour and adverse environmental impacts. In the interest of worker and patient safety, companies need to adhere to restrictions on the use of hazardous substances in their products. Relevant regulatory provisions include REACH, RoHS, the medical device regulation (MDR) and PBT rules under the Toxic Substances Control Act in the United States. For providers of medical services, data protection, cyber security and business continuity management are also indispensable. The same applies to pharmaceutical companies which strive to protect their proprietary knowledge.

How IntegrityNext
can help

IntegrityNext provides a platform for comprehensive ESG supply chain risk management that allows you to meet due diligence requirements and improve your sustainability performance:

1. Carry out a carbon footprint assessment and benefit from enhanced visibility into your suppliers’ emissions data, reduction efforts and targets.
2. Analyse the most relevant environmental, social and governance risks as part of a five-step risk management process.

It includes an abstract country and industry risk analysis to deliver initial insights into your supply chain’s risk exposure. Based on more detailed pre-built assessments, which draw on authoritative international standards and conventions, you can monitor your suppliers with respect to the main ESG risks:

We help you identify suppliers with the most severe impacts so that you can develop a coherent strategy and target your preventive and remedial measures accordingly. The results gleaned from the assessments are synthesised in a GRI-certified report that can be readily used for your disclosures.