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Contents

1. EXECUTIVE SUMMARY: ............................................................................................................ 4

2. THE PHARMACEUTICAL SECTOR .............................................................................................. 5

2.1 OVERVIEW OF THE MAJOR ISSUES PLAGUING THE NATIONAL AND GLOBAL HEALTH

SCENARIO: ................................................................................................................................... 5

2.2 DEFINING CSR FOR PHARMACEUTICAL COMPANIES ............................................................ 6

3. GSK CSR ACTIVITIES THAT IMPACT THE COMMUNITY ............................................................ 7

3.1 Rural Initiative: ...................................................................................................................... 7

3.1.1 Educational Centers: ................................................................................................... 7

3.1.2 Shelter home for children: ........................................................................................... 7

3.1.3 Mid-day Meal project: ................................................................................................. 7

3.1.4 Access to medicines: ..................................................................................................... 7

3.2 Research and Development Initiatives towards Community:............................................. 8

3.3 Investing in developing world healthcare infrastructure: ................................................... 8

3.4 Disaster response: .............................................................................................................. 9

4. WHAT DOES GSK DO FOR ITS EMPLOYEES? .......................................................................... 10

5. Some More Accolades for GSK: ............................................................................................. 10

6. MARKET PLACE OF GSK: ........................................................................................................ 10

6.1 GSK Follows Recognized Marketing Codes ......................................................................... 11

6.2 Marketing Code Exercise and Execution ............................................................................. 11

6.3 Facilitating a Culture of Compliance ................................................................................... 11

6.4 Scientific Engagement and Marketing ............................................................................... 11

7. HOW DOES GSK AFFECT ITS ENVIRONMENT? ....................................................................... 12

7.1 Some initiatives taken by GSK: ........................................................................................... 12

7.2 Use of water resource in GSK operation ............................................................................ 12

7.3 Managing waste: ................................................................................................................ 13

7.4 Destination of hazardous waste ......................................................................................... 13

7.5 Carbon neutral value chain ................................................................................................ 13

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7.6 Packaging ............................................................................................................................ 14

7.6.1 7 Rs ...................................................................................................................... 14

8. Analysis .................................................................................................................................. 16

Bibliography: ................................................................................................................................. 17

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1. EXECUTIVE SUMMARY:

The Idea behind this report was to analyse the importance of CSR in the pharmaceutical sector.

We start with the introduction to the Pharmaceutical Sector which has played a historical role in

the development and upliftment of humans. The Pharmaceutical sector has a long history with

regards to its involvement in CSR activities and is an apt industry for a CSR report.

GSK was selected because it is actively involved in various CSR activities which have direct and

indirect influence on a vast majority of people.

The Report provides a varied outlook on influence of GSK on its community, workplace,

employees, marketplace and finally the environment at large. Analysis of each sector is followed

by our critical analysis and the recommended way forward for its sustainable development.

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2. THE PHARMACEUTICAL SECTOR

The pharmaceutical industry develops and markets treatments for various human illness. Withoutthis industry, many therapies would not be introduced to the market, and many health problemswould remain unsolved. The prescription drugs spending is rapidly increasing and people acrossthe world have unequal access to these drugs due to the unequal distribution of wealth. With the

development of insulin in the 1920s, the introduction of antibiotics in 1940s and many other drugsand vaccines to maintain sound health, the pharmaceutical industry has been considered as aleader in CSR and a key player in the area of global health.Even though a large amount of their funds go in to R&D and promotional activities, manypharmaceutical companies have made CSR a fully integrated element of their strategies andoperations.The pharmaceutical industrys overall spending in R&D for neglected diseases has increased by90% in the past decade. Many pharmaceutical companies go beyond their primaryResponsibilities, and help solve health issues for people who are impoverished around the world.

2.1 OVERVIEW OF THE MAJOR ISSUES PLAGUING THE NATIONAL AND GLOBALHEALTH SCENARIO:

Often times when we think about health issues we think of those directly affecting our lives. It is

rare to think about health issues around the world, because our perception of health tells us that

these issues are not really something that we need to be concerned about. Perhaps this is because

the continents are separated by water, and somehow this allows us to feel that we are safe where

we are as long as we are not traveling to places that have certain health issues and diseases.

The Graph given below summarizes the major causes of deaths in the world:

Source: (WHO Report, 2012)

24%

21%

12%

11%

8%

6%

5%

5%4%

4%

Major Causes of Deaths in 2011Ischaemic heart disease

Stroke and other

cerebrovascular diseaseLower respiratory

infectionsChronic obstructive

pulmonary diseaseDiarrhoeal diseases

HIV/AIDS

Trachea, bronchus, lung

cancersTuberculosis

Diabetes mellitus

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DEATH DISTRIBUTION WORLDWIDE

Source:(India Current Affairs, 2011)

Looking at the major causes of deaths in the world and the death distribution chart, we can infer

that a major portion of the deaths can be prevented or delayed through effective use of medicines

which is the motive of global pharmaceutical majors such as GSK.

2.2 DEFINING CSR FOR PHARMACEUTICAL COMPANIES

The 10 largest pharmaceutical companies contributed a total of $2.2 billion in health-relatedprograms in developing countries between 1998 and 2002.GlaxoSmithKline reaffirmed its commitment to global public health by dedicating a $300,000facility to manufacture Albendazole for World Health Organization (WHO) global program toeliminate lymphatic filariasis (GSK, 2010). With an expected delivery of an additional 300 milliontreatments of albendazole per year, this investment is the largest drug donation program in thehistory of pharmaceutical industry. These examples show that some pharmaceutical companies aredoing a good job in making medicine and health care more accessible. However, there are stillloads to do.Another issue that pharmaceutical companies have been criticized for is the affordability of theirproducts. Corporate Watch accused the pharmaceutical industry of many crimes, including high

prices, immoral marketing, unethical presents to medical doctors, abandoning the rights of poor,no money-no cure attitude, clinical trials in the south and industry government alliances.With these issues and examples of CSR activities in mind, many industry veterans have attempted

to define the CSR of pharmaceutical companies. Many Prominent Industry veterans have arguedthat discovering and developing new drugs and vaccines is the primary corporate socialresponsibility of pharmaceutical companies. For some, recognizing the need for new products forneglected diseases is a clear example of pharmaceutical companies CSR. (InternationalResearcher Volume No.1 Issue No. 2 June 2012)

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3. GSK CSR ACTIVITIES THAT IMPACT THE COMMUNITY

GSK makes a positive contribution to the communities in which they operate. It invests in healthand education programmes and partnerships that aim to bring sustainable improvements to under-served people in the developed and developing world.

3.1 Rural Initiative:

GSK India undertakes a number of Rural Development initiatives through its trust GRAMINAAROGYA VI KAS SANSTHA (GAVS), a Rural Health Development Organization. As a part ofits Rural Tribal Development mission, GSK collected data from 92 villages around Nashik in theyear 2005, to identify the most under-served village communities which need support. GAVSworks in 15 of the villages in PethTaluka, Nashik District (GSK, CSR Report, 2007)GSK offers Medical check-up and treatment at Trusts Mobile Van. Mobile Clinic covers adistance of 160 kms each day and visits a cluster of five villages in rotation, covering a total of 15villages. A qualified medical practitioner along with two healthcare workers visits the villages five

days a week. (GSK, CSR Report, 2007)

3.1.1 Educational Centers:

GAVS operates a Balwadi (pre-school) for under five year age group children of rag-pickerscommunity in a slum pocket called Amrapali in Nashik. In addition to inculcating good civicnorms, these techniques train and educate their minds with impact. (GSK, CSR Report,2007).GAVS have also launched three Vocational Training Centers in PethTaluka. The centres werelaunched in the beginning of 2008 in collaboration with Mumbai based partner organization,Kherwadi Social Welfare Association. Over 700 youths have been trained and a number of themare currently gainfully employed. (GSK, CSR Report,2007)

3.1.2 Shelter home for children:

GSK India in collaboration with Pratham, a Non-Government Organization(NGO), started a

Shelter home for children under the age of 16. The project aims at prevention of children

migrating to bigger cities in need of work and falling prey to child labor and anti-social elements.

3.1.3 Mid-day Meal project:

GSK Pharma has been supporting the Mid-day meal program for Municipal school students fromthe year 2005. (GSK, CSR Report,2007)

3.1.4 Access to medicines:

Every year Hundreds of millions of people die from curable or preventable infectious diseases orsuffer unnecessary ill health because they do not have access to basic healthcare services,including essential medicines or vaccines.There are two main barriers in the developing world.

Distribution network for medicines is poor.

Poverty

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To address the twin problems GSK has come up with the following approach.

o Increasing availabilityGSK is trying to expand availability of its medicines and vaccines to as many ofthe people who need them as possible. The company is broadening its portfolio by

introducing new products and making sure that existing products are more widelyavailable to the health needs of people in developing countries.

o Improving affordabilityPricing is one factor that impacts access to medicines and vaccines.GSK wants toensure that the medicines are not only available but also affordable to everyone inthe world. So the company continues to take substantive steps to reform its corepractices, including adopting a range of flexible pricing models. The company isintroducing medicines in smaller pack sizes to make it more cost effective.In theLeast Developed Countries, the prices of the patented medicines and vaccines are

fixed at not more than 25% of prices in the developed countries.

Source:(GSK, CSR Report,2011)

3.2 Research and Development Initiatives towards Community:

GSK has a specialised R&D unit dedicated to developing drugs for patients in developing andleast developed countries and championing their needs throughout the R&D operations. GSKconducts a focus on the Patient programme (GSK, CSR Report, 2011) that brings patients to GSKsites to speak directly to their R&D teams about their healthcare needs. This helps the company tomake better medicines and inspires employees to do more to help improve patients lives. GSK isone of the few companies researching new vaccines and treatments for all three of the World

Health Organizations priority infectious diseases, HIV/AIDS, malaria and TB.

3.3 Investing in developing world healthcare infrastructure:

GSK reinvests 20% of its profits from medicines and Consumer Healthcare products into projectsthat improve local healthcare infrastructure. In 2011, GSK has set up new partnerships withAMREF, Save the Children and Care International to deliver future investments. (GSK, CSRReport, 2011)

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4. WHAT DOES GSK DO FOR ITS EMPLOYEES?

GSK was one of the 52 employers to get the Best Employers for Healthy Lifestyles award atthe Leadership Summit sponsored by the National Business Group on Healths (NBGH)Institute on the Costs and Health Effects of Obesity.( www.csrnewseurope.com/article/26)

GSK received a Platinum Award - the highest honour - for its commitment to fostering aculture that supports healthy high performance. Also providing a healthy workplace andpromoting a healthy lifestyle for employees and their families.

According to GSK's Christopher Viehbacher, President, US Pharmaceuticals, GSK plays a

major role in craeting a healthier, more spirted staff by planning health benefits that encourage

the prevention and better management of chronic diseases and their costly complications.

5. Some More Accolades for GSK:

GlaxoSmithKline has received a perfect score of 100 per cent from the US Human RightsCampaign Foundation's 2005 Corporate Equality Index, an annual report card on corporateAmerica's management of gay, lesbian, bisexual and transgender (GLBT) employees,customers and investors.(GSK US Press Release 2010)

GSK Belgium has also won the award for the most desirable place to work in 2005.( www.gsk.com/about/diversity_awards.htm)

Corporate responsibility, including ethical marketing practices, is an essential part of their

business. Sound business practices require us to operate in a manner that is responsible to all

stakeholders, including their shareholders and society at large.

6. MARKET PLACE OF GSK:

GlaxoSmithKline (GSK) is dedicated to ethical, responsible, principled and patient-centred

promotional practices. Their interactions with healthcare professionals are intended tobenefit

patients and enhance the practice of medicine.

In order to be truly successful in that endeavor, their practices conform to high ethical, medicaland scientific standards that are determined by law and regulation, promoted by industryassociations and embraced by the company. All GSK marketing and promotion is based on validscientific evidence, is consistent with national prescribing information documentation andcomplies with all applicable laws and regulations established at national levels.Corporate responsibility, including ethical marketing practices, is an essential part of theirbusiness. Sound business practices require us to operate in a manner that is responsible to allstakeholders, including their shareholders and society at large.

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6.1 GSK Follows Recognized Marketing Codes

As a multinational company, GSK sells products in more than 150 countries. The organisation is

well thought out into four main commercial regions the United States, Europe, Emerging

Markets & Asia Pacific, and Japan - exhibiting the size of some markets while recognizing the

similarities amongst others. They abide by laws and industry codes for each of the four regions

and have also adopted their own marketing codes for each region:

In the United States, they abide by the PhRMA Code on Interactions with Healthcare

Professionals and the PhRMA Guiding Principles on Direct-to-Consumer Advertisements of

Prescription Medicines. GSK also has in place a set of Commercial Practices Policies that were

developed to provide clear rules on how GSK employees should conduct themselves in their job.

In Europe, GSK observes individual country laws, regulations and industry codes, engulfing the

European Federation of Pharmaceutical Industries and Associations (EFPIA) Code of Practice and

has its own GSK European Promotion of Medicines Code of Practice

6.2 Marketing Code Exercise and Execution

New GSK representatives are trained by GSK on the medicines they encourage, the diseases the

medicines are planned to treat and appropriate marketing practices.

These include self-study based on company created materials, face to face in the field sessions

with managers, web-based learning and in-house training courses. GSK also provides their

marketing codes to employees when they are appointed to a position that requires an

understanding of the policies, specifically sales, marketing, medical and dictatorial roles

6.3 Facilitating a Culture of Compliance

Various parts of the business, engulfing Finance, Human Resources, Legal, Compliance and

Internal Audit, work together to ensure compliance with applicable laws and regulations, industry

guidelines and their Codes.

GSKs Internal Audit Department reviews sales and marketing on a regular basis to ensure proper

procedures are in place and adhered to. This audit process allows us to identify areas that need to

be addressed or are a reason for worry, and make any mandatory changes to enhance complete

compliance with their policies.

6.4 Scientific Engagement and Marketing

The new standards apply to all scientific and medical interactions with any external groups,

including healthcare practitioners, payers, governments, patient groups and the media. They

believe that if their scientific activities appear in any way to be promotional, their credibility will

be undermined and they will lose the trust of their stakeholders. These standards therefore support

their aim of being seen as a trusted and valued scientific partner in developing medicines and

vaccines that enhance patient care.

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7. HOW DOES GSK AFFECT ITS ENVIRONMENT?

GSK is thriving hard to align its business operations with environmental sustainability as it feels

the need to meet the environmental challenges. These environment challenges are also seen as an

opportunity keeping in mind the changing business environment.

Lately, GSK has been stressing upon its value chain to be carbon neutral. There isa strong urge toreduce the carbon footprint, 20% reduction in water use across the value chain and keeping thewaste to zero for landfill by 2050. (GSK, CSR Report,2011)

7.1 Some initiatives taken by GSK:

On-going R&D by doing the life-cycleassessment of integral parts of business liketechnologies, packaging etc. to give birth to sustainable alternatives.

A new guideline is set for procurement teams wherein the suppliers can be measured tointegrate sustainability.

GSK achieved the status of global certification by the Carbon Trust Standard. A significant partnership with the Singapore Economic Development Board by funding 24

million to execute research on green and sustainable manufacturing. (GSK, CSRReport,2010)

7.2 Use of water resource in GSK operation

Water Kaizen approach has been taken by GSK to judiciously use water. This approach was firstused in England at their Worthing and Maidenhead sites and 25% savings was noticed. This wasdone by fixing aerators to taps, optimisation of service water flows etc. The Kaizen approach alsoenabled the company with the choice of using wasted water in other facilities rather thanextracting fresh potable water.

Water consumption

Source:(GSK, CSR Report, 2010)

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7.3 Managing waste:

The PET waste is used to manufacture bottles for Ribena. This waste of 700 tonnes is recycled tomake Ribena bottles and resultantly saving a huge chunk of 700,000 and over 3,000 tonnes ofCO2-equivalent emissions a year. (GSK, CSR Report 2011)

7.4 Destination of hazardous waste

214,520 tonnes of waste in 2009 was lowered to 191,470 tonnes in 2010. A total of 81.6% wasrecycled, 5.3% was incinerated with energy recovery. Only 0.2% went to landfill.

Source:(GSK, CSR Report,2010)

7.5 Carbon neutral value chain

The impact of transport, operation and inhalers due to increased production volumes has come

down due to the constant effort of stressing on carbon neutral value chain by 2050 (GSK, CSRReport,2011)

The trend of CFC gases emissions since 1998 has been displayed in the below diagram. In 2010our climate tranformation impact, engulfing operational energy, travel, transport and other directsources, and inhalers used by patients, was 6.9 million tonnes of CO2, 9.2% lower than in 2009.This engulfs 4.6 million tonnes from inhalers used by patients, down by 10.1% from 2009.

Climate change impact from operations, transport and inhaler use

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Source:(GSK, CSR Report,2010)

The consumption of energy used by operations and transport has decreased by 6.6% that is from26.0 million GJ in 2009 to 24.3 million GJ in 2010

7.6 Packaging

In order to reduce the impact on environment, GSK is set to source 50% of its paper requirementfrom sustainable sources by 2015 and further 90% by 2020. Furthermore, the concept of 7 R wasalso implemented in 2010 as a part of sustainable packaging strategy

7.6.1 7 Rs

RINCIPLE OCUS XAMPLE

educe he mass of materials,omplexitynd the life cycle footprint ofackaging

The redesigned Ventolinanister will save 125onnes of aluminium and,200 tonnes of CO2 perear

emove aterials with sustainability orHS

ssues

Removing the PVC tray foricoderm saved over 8

onnes of material and 20onnes of CO2 every year

euse ecycled materials inackagingsubject to regulatoryequirementshich mean this is a major

hallengen pharmaceuticals)

Reusing trays, pallets andrums saves plastic andood

ecycle esign for recyclability Moving the desiccantequired in Niquitin bottles tohe cap means bottles can beecycledWorking with suppliers tohange a carton materialor Aquafresh to a fully greenubstitute, reducing0 tonnes of material and 250onnes of CO2

enew se materials and energy fromenewable sources

For paper-based packaginge increasingly buyaterials made from

ecovered fibres.

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eward mprove the environmentalmpact ofhe total GSK packagingupplyhain, meeting the needs of

atients,ustomers and consumers atowerost

Sustainability is a keylement in the selection andontinued management ofealers. It frames aital part of the purchasing

uidelines andeneral ways of working.

espect se responsible suppliers We include social andnvironmental requirementss piece of our dealerelection method and we arereating more in depth basisor precise factors

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8.Analysis

GlaxoSmithKline is the leader in CSR activities and a key player in the area of global health. The

companies is spending substantial amount of its funds into R&D and other promotional

activities. The major source of death in 2011 has been non-communicable diseases. Such

diseases are more common in rural areas where people do not have access to medicines. Around

14 million people die every year from communicable diseases, and in excess of 2 billion people

lack facilities to medicines for treatable health conditions. To address this problem, GSK has

expanded the availability of its medicines and vaccines and made it easily affordable to the

common man. This has wiped out the no money-no cure attitude.

In low income countries the major chunk of death relates to children under the age of 14. The

major portion of the deaths can be prevented or delayed through effective use of medicines. To

address this problem, GSK reinvests 20% of its profits from medicines and Consumer Healthcare

products into projects that improve local healthcare infrastructure

Through its trust GRAMIN AAROGYA VIKAS SANSTHA (GAVS), GSK operates a Balwadi(pre-school) for under five year age group children. This is a 2015 millennium development goal

towards achieving compulsory primary education. GSK has also set up Vocational Training

Centers were over 700 youths have been trained and a number of them are gainfully employed.

GSK has also started a Shelter home for children under the age of 16 to prevent children

migrating to bigger cities in need of work and through its Mid-day-Meal project it has reduced

hunger to a great extent.

GSK is providing environmental friendly products by reducing its carbon footprint and achieving

20% reduction in use of water. GSK recycles the waste to manufacture bottles. In order to reduce

the impact on environment, GSK is set to source 50% of its paper requirement from sustainablesources by 2015. GSK achieves sustainable packaging strategy through reducing carbon

footprint, removing materials with sustainability issues, recycling materials in packaging, using

renewable sources, rewarding customers at low cost and respecting responsible suppliers. GSK is

increasing its investments and proposals to reduce the consumption of energy.

GSK provides a healthy workplace and promotes a healthy lifestyle for employees and their

families. GSK protects human rights and also takes care of its internal customers by providing

them with work-life balance. Through such initiatives GSK has won the award for the most

desirable place to work.

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Bibliography:

1. GSK,2010, Corporate Responsibility Report,pg 149-195www.gsk.com/responsibility/downloads/GSK-CR-2010-Report.pdf

2. GSK,2011, Do More Feel Better Live Longer, Corporate Responsibility Report,pg 84-100http://www.gsk.com/responsibility/downloads/GSK-CR-2011-Report.pdf#our-planet

3. PR Newswire,2011,United Business Media, GlaxoSmithKline Wins EnvironmentalStewardship Awardhttp:// GlaxoSmithKline%20Wins%20Environmental%20Stewardship%20Award%20--

%20NAPERVILLE,%20Ill.,%20Feb.%2024,%202011%20%20PRNewswire%20%20--.htm

4. GSK,2007, Corporate-Ruralprojectshttp://www.gsk-india.com/corporate-ruralprojects.htm

5. World Health Organisation Report 2012www.who.int/mediacentre/factsheets/fs310/en/index.html

6. India Current Affairs Report, 2011, The World health Statistics-2011http://indiacurrentaffairs.org/the-top-10-causes-of-death-world-health-statistics-2011/

7. India International Researcher Volume No.1 Issue No. 2 June 2012

http://iresearcher.org/1-9%20%202-8%20Final%20paper%20Moussa%20Berete.pdf

http://www.gsk.com/responsibility/downloads/GSK-CR-2010-Report.pdfhttp://www.gsk.com/responsibility/downloads/GSK-CR-2011-Report.pdf#our-planethttp://www.gsk.com/responsibility/downloads/GSK-CR-2011-Report.pdf#our-planethttp://www.gsk-india.com/corporate-ruralprojects.htmhttp://www.who.int/mediacentre/factsheets/fs310/en/index.htmlhttp://indiacurrentaffairs.org/the-top-10-causes-of-death-world-health-statistics-2011/http://indiacurrentaffairs.org/the-top-10-causes-of-death-world-health-statistics-2011/http://www.who.int/mediacentre/factsheets/fs310/en/index.htmlhttp://www.gsk-india.com/corporate-ruralprojects.htmhttp://www.gsk.com/responsibility/downloads/GSK-CR-2011-Report.pdf#our-planethttp://www.gsk.com/responsibility/downloads/GSK-CR-2010-Report.pdf