Corporate responsibility and third party relationships gsk and contract manufacturers
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Corporate Responsibility and Third Party Relationships GSK and Contract Manufacturers. James Hagan Vice President Corporate Environment, Health & Safety. GSK and Contract Manufacturing. Overview of GlaxoSmithKline Scope Business/CR/EHS drivers CR / EHS process

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Corporate Responsibility and Third Party Relationships GSK and Contract Manufacturers

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Corporate Responsibility and Third Party RelationshipsGSK and Contract Manufacturers

James Hagan

Vice President

Corporate Environment, Health & Safety

GSK and Contract Manufacturing

  • Overview of GlaxoSmithKline

  • Scope

  • Business/CR/EHS drivers

  • CR / EHS process

  • EHS management and audit

  • EHS data reporting for CM

  • Summary

Overview of GlaxoSmithKline - Who are we?

World leading research-based pharmaceutical


  • 7% of total global pharmaceutical sales

  • Total company sales: £21.2 bn / $31.8 bn

GSK’s mission is “to improve the quality of

human life by enabling people to do more,

feel better and live longer”

GSK - Where are we?

Our International Region covers

80% of the world’s population

GSK - Where are we?

  • 100,000 employees worldwide

    • R&D

      • 16,000 employees

      • at 24 sites

      • in 7 countries

    • Manufacturing

      • 42,000 employees

      • at 91 sites

      • in 38 countries

    • Sales & Marketing

      • 40,000 employees

      • 191 countries

Our Flagship Products

Our Flagship Products

  • GlaxoSmithKline develops, manufacturers and markets:

    • pharmaceuticals, vaccines, over-the-counter medicines and health related consumer products

  • Our broad pharmaceutical product line includes:

    • antibiotic, antidepressant, gastrointestinal, dermatological, respiratory, cancer and cardiovascular medications

  • In 4 of the 5 largest therapeutic areas worldwide, we are world leaders:

    • anti-infectives, CNS, respiratory and metabolic

Our Flagship Products

  • We supply products to 191 global markets

  • Produce over 1,200 different brands

  • Manufacture 4 billion packs per year

  • Produce over 28,000 different finished packs per year

  • Supply 6,900 tonnes of bulk active each year

  • Manage 2,000 new product launches globally each year

Scope of Contract Manufacturing

GSK has strategic alliances and partnerships with over 400 Contract Manufacturers (many long term)

Across all the products in our portfolio

For all the stages of product life cycles:

GSK Spends over £800m per annum

Contract Manufacturers are integral to GSK’s

supply chain

Business drivers for Contract Manufacturing

GSK has strategic alliances & partnerships with Contract Manufacturers:

To optimise supply chains & costs

To provide a ‘best in class’ supply base

To partner with companies on specialist processes or technologies

GSK has a regional approach to supply local markets

Corporate Responsibility drivers for Contract Manufacturers

Committed to doing business with integrity

Protect our Corporate Reputation

Ensure compliance with EHS regulatory requirements

Protect CM employees, local communities, and the environment

Minimise business interruption and ensure continuity of supply of medicines

Minimise risk to GSK

Foster sustainability

Provide for competitive advantage

How do we manage the EHS / CR component?

Work in partnership with Contract Manufacturers

to prevent adverse events and ensure continuity

of product supply:

  • Structure our approach within a comprehensive framework of Standards

  • Integrate EHS/ CR considerations in sourcing decisions and Contract Manufacturer selection

  • Incorporate EHS / CR requirements in contracts

  • Conduct EHS audits to assess conformance with GSK requirements and highlight areas for improvement

  • Monitor progress with audit follow-up




Tools& Best Practices

GSK - EHS Framework

What the Global EHS Standards Do

  • Establish a management system approach

  • Outline minimum requirements

  • Drive towards excellence

  • Apply to everyone

  • Effective from 2001

CR/EHS Requirements for Contract Manufacturers

  • Two specific Standards on CM

  • Distilled set of Standards for CM

  • Utilised in selection process

  • Incorporated in contracts

  • Requires

    • compliance with laws & regulations

    • compliance with GSK Standards

    • report adverse events

    • report EHS performance

Corporate Responsibility issues beyond EHS

Comply with local employment legislation.

Do not discriminate against sex, race, religion or disability.

Do not use child (< 16 years) or bonded labour

CR requirements are included in contract

language and audit teams assess Contract

Manufacturers to ensure that they:

Scope of the EHS Audit Programme

  • Conduct over 40 audits per annum globally

  • Selection for audit:

    • where there is a significant spend / revenue / gross profit dependency

    • serving multiple key markets or essential supply chains or supplying WHO products

    • where significant hazards are presented by GSK technologies / products / processes e.g. cytotoxics

  • Contract Manufacturers have rated from 30% to 86% (out of 100%) on an EHS Audit scheme

  • Equivalent to ‘Poor’ - ‘Excellent’ on qualitative ratings or bandings

Audit process

  • Provides a governance review

  • Provides for working in partnership

  • Improves EHS performance of Contract Manufacturers through continuous review

Audit process

No progress = 2nd ‘exit’


Example - EHS Audit Rating / Banding

Audit Experience Summary 2002-2003

  • Downsides

    • Some lack of investment / limited resources (chiefly in the containment of APIs)

    • Occasionally poor Chemical Agents assessments

    • Occasional high incidence of EHS adverse events

  • Positives

    • Commitment to progress actions rapidly

    • Willingness to learn from the audit experience

    • Growing proportion of companies with ISO14001

    • Best practices GSK could learn from…...

Annual Report Information

2002: Collected EHS data from key Contract Manufacturers

2003: Verifying the data collection process

2004 and beyond:

Expand the number of CMs reporting results

Incorporate collective results as part of GSK’s annual report

Include Contract Manufacturers as part of GSK EHS footprint


  • The emphasis on partnership and continuous improvement

  • EHS / CR considerations are integrated in the business process

  • Audit teams conduct EHS audits to assess conformance with GSK requirements

  • EHS performance is generally good

  • Future annual reporting to include EHS performance results

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