Environment

  • GHG Emissions
  • Air Quality
  • Energy Management
  • Water & Wastewater Management
  • Waste & Hazardous Materials Management
  • Ecological Impacts

Social Capital

General Issue Category
(industry agnostic)

Disclosure Topics (industry specific) for:
Biotechnology & Pharmaceuticals

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Human Rights & Community Relations

Safety of Clinical Trial Participants

Clinical trials are an essential component of the approval process for biotechnology and pharmaceutical products. The safety of clinical trial participants is a critical component of a company’s ability to successfully bring a product to market. Oversight of these trials is an important factor in the industry due to the number of clinical trials conducted by third party contract research organizations as well as those conducted in emerging markets. Biotechnology and pharmaceuticals companies that effectively manage clinical trials may be positioned to enhance shareholder value through the revenue associated with new products.

Access & Affordability

Access to Medicines

Biotechnology and pharmaceuticals companies play an important role in providing access to the industry’s products around the world. Firms can develop pricing frameworks that account for differing levels of economic development and health care needs across various countries. Further, the industry can target priority diseases in developing countries. Strategic approaches related to access to medicines can yield opportunities for growth, innovation, and unique partnerships, which may enhance shareholder value.

Affordability & Pricing

Stakeholder emphasis on health care cost containment and increased access will likely continue to place downward pricing pressures on the Biotechnology & Pharmaceuticals industry. As a result, companies that have relied on raising drug prices, contractual advantages, and reverse payments to protect profits may be challenged to enhance value by efforts to reduce costs. Firms that prevent stakeholder scrutiny of pricing practices may limit their exposure to issues such as regulatory action, or adverse reputational impacts.

Product Quality & Safety

Drug Safety

Information on product safety can surface after controlled clinical trials and regulatory approval. Subsequently, companies are exposed to the financial implications of recalls and other adverse events. Product safety concerns, manufacturing defects, or inadequate disclosure of product-related risks can lead to significant product liability claims. Biotechnology and pharmaceuticals firms that limit the incidence of recalls, safety concerns, and enforcement actions for manufacturing concerns may be better positioned to protect shareholder value. In addition, concern over the abuse or resale of certain medications has led to mandated take-back programs. Firms that are able to successfully engage in these programs may limit future liabilities.

Customer Welfare

Counterfeit Drugs

The World Health Organization estimates that counterfeit drugs represent more than 10 percent of the pharmaceutical supply chain in low and middle-income countries. The issue of fake or substandard medication also presents a significant risk in developed economies. Biotechnology and pharmaceuticals companies may face added costs as numerous governments and agencies have implemented drug supply chain regulations in an effort to prevent counterfeit, substandard, or mislabeled drugs from entering the pharmaceutical distribution system. Companies that fail to manage this issue effectively may face material risks associated with the potential loss of public confidence and reduced revenue.

Selling Practices & Product Labeling

Ethical Marketing

Biotechnology and pharmaceuticals companies face challenges associated with the marketing of specific products. Direct-to-consumer advertisements for prescription drugs provide opportunities for increasing market share. However, challenges arise from the potential for marketing off-label uses, which can result in significant fines and settlements. Corporate disclosure of legal and regulatory fines and the codes of ethics that govern marketing activities will allow shareholders to better understand performance in this area.

Employee Engagement, Diversity & Inclusion

Employee Recruitment, Development & Retention

Biotechnology and pharmaceuticals companies face intense competition for employees. The industry relies on highly skilled employees to develop new products, conduct clinical trials, manage government regulations, and commercialize new products. Firms that are able to attract and retain employees in light of a constrained talent pool may be better positioned to protect and enhance shareholder value.

Supply Chain Management

Supply Chain Management

For the Biotechnology & Pharmaceuticals industry, supply chain quality is essential to protecting consumer health and corporate value. Biotechnology and pharmaceuticals firms that fail to ensure quality throughout their supply chains are susceptible to lost revenue, supply disruptions, and reputational damage. Disclosure of supply chain audit programs may provide shareholders with an understanding of how companies in this industry are protecting shareholder value.

Business Ethics

Business Ethics

Biotechnology and pharmaceuticals firms are subject to various international, national, and state laws pertaining to health care fraud and abuse. For example, in the U.S., anti-kickback laws and the Foreign Corrupt Practices Act generally prohibit companies from making payments for the purpose of obtaining or retaining business. The ability of companies to ensure compliance throughout their global and domestic operational footprint may have material implications. Corporate disclosure of legal and regulatory fines and the codes of ethics that govern interactions with health professionals may allow shareholders to monitor performance in this area.

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