Blueprint for change concept climate bangladesh (bysted june 21)
The Triple Bottom Line– our way of doing business Gå hjem møde - Bysted June 21, 2012Ole Kjerkegaard Nielsen, MSc, PhD Programme Director Corporate Relations Novo Nordisk A/S
Caring for people and society is at the heart of ourheritage and values Patient J.L. Patient J.L August and Marie Krogh 15 December, 1922 15 February, 1923 (with his mother – (after insulin treatment) prior to insulin treatment)
Defining moments have shaped our approach 2001 AIDS drug court case in South Africa and access to care 1960-70’s Enzymes 1980-90’s 2005-2009 and allergy Genetic engineering Oil for Food and and the impact on business ethics environment Occupational Environmental Social justice health and and economic Globalisation safety protection growth
An ever changing environment affects our business Global diabetes epidemic Financial instability Millions of people w diabetes 600 +51% 500 400 300 552 200 366 100 0 2011 2030 Source: IDF Diabetes Atlas, 5th edition, 2011
We have an ambition to be a sustainable business Our ambition is to strengthen our leadership in diabetes. We aspire to change possibilities in haemophilia and other serious chronic conditions. Our key contribution is to discover and develop innovative biological medicines and make them accessible to patients throughout the world.
The TBL is a core principle in the Novo Nordisk Way Our culture is also defined by TBL The company seeks “Our business philosophy is one to conduct its business of balancing financial, social anda financially, in environmental considerations – we call it environmentally ‘The Triple Bottom Line’” Patients and socially - The Novo Nordisk Way responsible way.
Sustainability strategy A true leader in the transition towards global sustainable development Managing Responding Driving systemic our to changing change in areas business stakeholder of strategic sustainably expectations business interest Risk mitigation Resilience Innovation Innovating Value Business Learning with through creation integration stakeholders partnerships
Novo Nordisk has a patient centred business approachFrom customer driven relationships to cluster development
changing diabetes® ambitionsAddressing the ”rule of halves” Public awareness on the need to take action on diabetes More resources to prevention and early detection of diabetes Better treatment and care for all people with diabetes
NADINE ABRAHAMS AND TAMSYN LA VITAIn good company, South Africa Nadine has type 1 diabetes
A series of carefully selected programs strengtheningthe link between our TBL principle and our valuecreation… …with the purpose to • assess and communicate the impact of our initiatives for society and for us • foster healthy: - profitable business - communities - sustainable production - planet • emphasize the importance of the TBL principle integration in both internal and external stakeholders’ priorities
Full TBL integration will enhance value to Novo Nordisk and society Scale Shared value to Novo Nordisk and SocietyExpanding the • Shaping societypie • Scale• Capture Value creation opportunities potential that create value for both society and Novo Nordisk The right thing to doZero sum game • Adhere to requirements• Re-allocate • Getting engaged resources to contribute to society Integration Philanthropy Business basics • Passive approach to contribute to • Embedded part of how Novo issues important to society Nordisk does business
the Blueprint for Change Programme is based on a holistic shared value creation model short term long termmaximising upside Tangible Intangible Value Valueminimisingdownside Cost Risk Developed by Novo Nordisk and Accenture
Making a business case for corporate sustainabilityFacing up to the climate Changing Diabetes in Creating shared value Changing diabetes in change challenge China through socially Bangladesh through responsible initiatives sustainable in the United States partnerships
the climate change challenge1st Blueprint for Change - Climate Strategy Climate becomes a focus area 2003 Novo Nordisk became the 10th Commitment to reduce 2006 member of the WWF 10% from 2004-2014 Climate Savers Programme 2010 Impact assessment of the climate strategy Facing up to the climate change challenge
the climate change challenge10% reduction in carbon emissions achieved five yearsahead of time VALUE TO SOCIETY VALUE TO NOVO NORDISK• 28,000 tons of CO2 reduction • The energy savings have realised a equivalent to 4,500 fewer cars on total of 24 million USD in cost the road every year savings corresponding to a 10% SHARED VALUE reduction in global energy• 50,000 tons CO2 reduction through consumption sourcing of wind power equivalent to taking a further 8,000 cars off the • The energy savings conducted from road every year 2004 will continue to yield annual cost savings of app. 8 million USD in• The DONG Energy partnership – the future building of the world’s largest off- shore wind farm which will supply • Half of all energy saving projects are power equivalent to the annual paid back in less than one year electricity consumption of 200,000 • Average pay back time is 1.9 year households • Intangible value of future risk• 30 new partnerships have been mitigation, employee engagement, inspired by the Novo Nordisk model trust and reputation
the climate change challengeDecoupling environmental impact from sales 300 Index: year 2001 = 100 250 200 Index 150 100 50 2001 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 2010 CO2 Water Energy Waste Sales
the climate change challengeOur partnership with DONG Energy leads to aninnovative solution Novo Nordisk saves The financial savings are The premium paid helps 100% of our electricityenergy at production earmarked to sourcing fund establishment of consumption in Denmark facilities of renewable electricity new wind farm in the is covered by the new North Sea wind farm
Slide no 20situation Bangladesh has a strong growing market-based economy with continuously improving quality of life Gross domestic product, Human development index2 constant prices1 index index 1International Monetary Fund, World Economic Outlook Database. http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/index.aspx. Accessed on January 2012. 2International Human Development Indicators. Regional and National Trends in the Human Development Index 1980-2011. http://hdr.undp.org/en/data/trends/. Accessed on February 2012.
Slide no 21situation One-third of sales are expected to come from China and International Operations (IO) regions by 2020 Novo Nordisk, sales shares rest of the world IO China Note: IO is International Operations (Bangladesh is an IO country) Source: Internal data: SPP11 ex-factory sales, Insights & Forecasting, January 2012. Slide no 21
Slide no 22situation IO will account for 51% of the patient growth by 2021 driven by intensified treatment and lifestyle changes Share of global growth (patients) IO growth potential (drivers) CAGR (2011-2021) - 5.87% CAGR (2011-2021) - 7.03% Source: Internal data: Insights & Forecasting, January 2012. Slide no 22
Slide no 23situation As incomes and longevity rise, demand will shift from infectious to non-communicable diseases Infectious diseases Non-communicable diseases HIV malaria tuberculosis cardio vascular cancer diabetes Currently, many developing countries The rise in socioeconomic and educational levels rely primarily on locally produced drugs is driving a market for more innovative and branded drugs These are often counterfeits or generics of branded drugs Rising standards of living and increasing life spans will shift focus away from infectious diseases Source: IMS Health. Pharmerging Markets. Opportunities for Growth and Change. IMS ,2008 Slide no 23
Slide no 24situation complication However, healthcare systems will not be transformed as quickly as demand, creating a need for models to ensure both economic and public health sustainability private sector Significant private sector or social entrepreneurship investments, in addition to government interventions sustainable A compelling business case that business encourages private institutions to models invest in healthcare infrastructure and services partnerships Early market entry and extensive partnering with government, non- governmental institutions and private enterprises with an aligned vision for removing barriers to care and improving defined outcomes Demand for Supply of healthcare healthcare Slide no 24
Slide no 25situation complication Patients in the developing world face barriers to improve their health Issues and barriers examples Lack of education and Lack of high quality HCPs and awareness about diabetes, clinics, long distance to its complications, and its facilities, and long waiting cost time for treatment Awareness Accessibility Many cannot afford medicine It is difficult for many to and treatment services, the remember medication and majority do not have health follow scheduling, many Quality for insurance and do not have Affordability fear of injections, many patients access to other finance people living with diabetes solutions, healthcare system are stigmatized and have is lacking necessary resources psychological issues to treat diabetes Availability Some medicines/package solutions are not available in the country or in the region Note: The model has been developed together with BADAS and Accenture, and is based on “Access to Health: Our Approach”, Novo Nordisk, 2011.
Slide no 26situation complication More than one-third of all people with diabetes in least developed countries live in Bangladesh People living with diabetes, top 10 LDC countries 40% of people living with diabetes in least developed countries (LDCs) are living in Bangladesh In Bangladesh, diabetes is a particularly daunting challenge, with more than 12% of the adult population affected by diabetes or prediabetes Nearly half of the population with diabetes is undiagnosed Among those with diabetes, only 1 in 3 people is treated, and roughly 1 in 13 achieves treatment targets IDF Diabetes Atlas, 5th edition, International Diabetes Federation, 2011. Slide no 26
Slide no 27situation complication answer Patients in LDCs face barriers in diabetes, which need to be addressed sustainably and in partnerships non-exhaustive Critical Success Factors Issues and barriers Response to Issues Outcomes Interactions/Partners • Too few people know about diabetes / • Value to people with diabetes lack of awareness • Value to society • Patients have difficulties adhering to • Value to Novo Nordisk guidelines • Most people cannot afford medication • Value to NGOs • Lack of sufficiently educated health • Value to public sector care professionals • Value to social enterprises • Limited availability of HCPs • Value to private sector • Transportation issues • Psychosocial issues The most important initiatives since 2001 Implementation of Distance Learning Bangladesh: a full Primary prevention Changing Diabetes cool-chain system Programme (DLP) fledged affiliate of diabetes in Children 2003 2004 2004 2006 2007 2007 2007 2008 2010 2010 Improving DM Improving LDC pricing Distributor Accredited through diabetes diabetes policy change Physician Scheme educators care at Thana level
Slide no 28situation complication answer Partnering with the local champion has been a key for the success created in Bangladesh focus trust In Bangladesh no diabetic shall die untreated, unemployed or unfed. All people shall be provided with affordable healthcare services. - BADAS vision Our key contribution is to discover and develop innovative biological medicines and make them accessible to patients throughout the world. - Novo Nordisk Way commitment consistency
Slide no 29situation complication answer Accessibility and availability of diabetes care have been addressed though DLP and distributor change Interactions Issues and barriers Outcomes Response Distance Learning Programme • Poor accessibility to HCPs Improved quality of more Contribution to device, Increased sales than 4,500 HCPs volumes and market and MI penetration, • Quality of diabetes care is poor potential market potential • Lack of awareness and knowledge Improved quality of care Improved reputation Improved access to among patients about diabetes and patient knowledge new growth and stakeholder about diabetes possibilities support Improved patient v Improved access to outcomes (3%-6% new skills & patient decrease in HbA1c level) pools Distributor change • Lack of insulin availability in the Increased insulin Increased Increased sales sales country distribution from 16% to volumes and market volumes (9.5%-point) 53% of population potential market potential and • Lack of proper insulin storage equipment Improved availability of Improved access to Improved access to and accessibility to HCPs new growth new growth on a sub district level possibilities possibilitiesouter circle pie chart involved partners not involved partners primary addressed issues secondary addressed issues not addressed issues
Slide no 30situation complication answer Affordability and accessibility of diabetes treatment has been improved through LDC pricing policy and CDiC Interactions Issues and barriers Outcomes Response LDC pricing policy Overall reduced cost of Increased Increased sales sales • Affordability is a very significant issue insulin and complementary volumes and market volumes (2.3%-point) in Bangladesh products potential market potential and Decreased cost of treatment Improved to Improved access market from 41% to 12% of the new growth with 12%-point share disposable income possibilities first 2 years in the Improved affordability from m 10% to 40% of the population Changing Diabetes® in Children • Affordability is poor in the country Improved quality of life for Increased Increased sales market • Lack of awareness about type 1 1,077 children volumes and market potential and diabetes stakeholder support Increased focus and V • Lack of specialized and dedicated awareness about T1D Improved access to resources new growth Accessibility to care has Improved access to • Accessibility to care is challenging possibilities improved new growth Treatment targets improved Employee c engagement due to CDiC campsouter circle pie chart involved partners not involved partners primary addressed issues secondary addressed issues not addressed issues
Slide no 31situation complication answer Novo Nordisk has been effective in addressing societal issues due to a number of sustainability considerations Private sector involvement In addition to government interventions significant private sector or social entrepreneurship investments are required Sustainable business Partnership models’ creation development A sustainable business case Success requires extensive is needed to incentivize partnering with private institutions to invest government, NGOs and in healthcare infrastructure other institutions and and services private enterprises with aligned visions and goals
Slide no 32situation complication answer next steps In order to drive more value, a stronger partnering model around the patient centric issues is advised non-exhaustive Critical Success Factors Issues and barriers Interactions/Partners Outcomes • Too few people know about diabetes / • Value to people with diabetes lack of awareness • Value to society • Patients have difficulties adhering to • Value to Novo Nordisk guidelines • Most people cannot afford medication • Value to NGOs • Lack of sufficiently educated health • Value to public sector care professionals • Value to social enterprises • Limited availability of HCPs • Value to private sector • Transportation issues • Psychosocial issues
Making change happenThere is only one way“Be the changeyou want to seein the world.” Mahatma Gandhi