Pharma and Medical Supply Leaders' Rx for Greener Operations
Editor's Note: As the healthcare industry strives to reduce its environmental footprint, the makers of pharmaceuticals and medical devices are working to curb their use of energy and water and run their facilities more responsibly.
The pharmaceutical industry spends $1 billion annually on energy, which accounts for 14.4 percent of the healthcare industry’s carbon footprint. Medical devices add another 2.5 percent to the industry’s carbon footprint. Treatment and prevention of malaria costs in Africa are estimated at $12 billion annually and global treatment cost for HIV/AIDS is projected at $25 billion per year.
So which of these challenges do pharmaceutical and medical devices companies see as part of their corporate social responsibility? The answer is all.
Healthcare suppliers face an extremely complex set of environmental and social responsibility challenges. Industry sustainability leaders are tackling these challenges head-on domestically and globally. For those leaders who are recognized on rankings such as the Newsweek Green Rankings, Corporate Responsibility’s 100 Best Corporate Citizens and the Dow Jones Sustainability Index, one critical element to an effective response is a deeply embedded commitment to corporate citizenship in their missions and company cultures.
Robert L. Parkinson, Jr., chairman and chief executive officer of medical device company Baxter International Inc. (No.10 on CR’s 2010 list of 100 Best Corporate Citizens), says, “We define sustainability as a long-term approach to including our social, economic and environmental responsibilities among our business priorities.” This focus on environmental and social progress informs and influences strategy, operations and product development.
Kaiser Permanente recently introduced a supplier Sustainability Scorecard impacting $1 billion in purchasing annually. This is a clear sign that healthcare providers are demanding greater environmental accountability from their suppliers.
Easing the Load on the Grid
In reducing impacts of operations, leaders like Baxter and Johnson & Johnson, are going off the grid. Baxter pumped renewable power up to 16 percent of total energy usage in 2008 and augmented energy needs with 29,500 megawatt hours of purchased certified renewable energy certificates. Baxter has set a goal to slash greenhouse gas emissions 45 percent indexed to revenue from 2005 baseline.
By 2008, J&J had cut absolute GHG emissions by 9 percent, while sales rose over 400 percent. J&J is turning to the sun to achieve GHG goals. J&J’s LEED-Gold New Brunswick, NJ, headquarters has more than 800 solar panels and saves $100,000 in electricity costs and 2,000 tons in CO2 emissions per year. J&J is recognized as second largest generator of solar electricity in the U.S. and is a six-time recipient of the EPA Green Power Partner of the Year award.
Healthcare companies also leverage energy management systems to crank down the heat on energy bills. According to Lars Thording, senior director of Marketing and Brand Strategy at device reprocessor Ascent, A Stryker Sustainability Solution, a new energy management system at their plant in Phoenix, Ariz., is projected to cut energy use by up to 20 percent.
Managing Water Use
Reducing water use, particularly in water-stressed areas is also an industry priority.
Abbott Laboratories (No. 6 No.10 on CR’s 2010 list of 100 Best Corporate Citizens), exceeded a five-year goal to reduce water intake by 40 percent by 2009. Using the World Business Council for Sustainable Development’s “Global Water Tool” to create assessments, Abbott benchmarks against external water data to develop metrics and targets. In the two years from 2007 to 2009, several of its plants in vulnerable water areas including Casa Grande, Ariz., and Campoverde, Italy, achieved double-digit water use reductions. Additionally, innovative heat and water recovery systems in cooling systems at Abbott’s Ross Products division plants save some facilities over $100,000 per year.
Pharmaceutical and medical device companies also face water quality issues, largely due to wastewater discharges and spills. While many have made significant progress, even sustainability leaders are challenged to further cut wastewater exceedances.
Baxter acknowledges that with its 27 wastewater related incidents in 2008, wastewater discharge still “represents one of the company's most significant environmental compliance risks” and as a result the firm invested $10 million in wastewater treatment upgrades in 2008 alone.
On the other end of the water performance spectrum, J&J’s manufacturing plant in Baddi, Himachal Pradesh, India, took an innovative and aggressive approach to wastewater management by installing an on-site, zero-discharge wastewater treatment facility and using treated water in gardens and toilet flushing. The facility also started harvesting rainwater that was otherwise wasted as run-off during the monsoon season.
Trying to Prevent Drugs from Going Down the Drain
Further concern about water quality stems from the growing body of research on pharmaceuticals in the environment (PiE). While the low levels of residual drugs found in the water supply are currently not believed to be harmful to humans, pharmaceutical companies are giving this issue serious attention.
In their 2008 Sustainability Report, J&J highlights assessing and managing the risks of pharmaceuticals in the environment as one of their challenges. Pharmaceutical company Astra-Zeneca (the highest-ranking pharma company on Climate Counts Scorecard last year) opened a new $26 million facility in Brixham, U.K., to support PiE research and develop a better understanding of how pharmaceuticals break down and impact the environment.
The jury is still out on how PiE will impact future profits, but given the attention pharmaceutical companies are giving PiE’s, it is clear they are working to understand and mitigate economic exposures.
Reprocessors Help Hospitals Reduce Waste
As discussed in Part 1 of this series, hospitals produce 2 million tons of solid waste per year. Medical devices, most of which are by design, single-use devices (SUDs), contribute significantly to the problem.
Before the 1990s, hospitals reprocessed a limited amount of devices for reuse. However in the 1990s, the FDA took notice and was concerned that the hospitals were not bringing devices back to their original sterility, efficacy and safety standards. FDA clearance and adherence to strict guidelines for device reprocessing became required.
When hospitals could no longer manage reprocessing internally, third-party reprocessors jumped in to fill the gap. Leading reprocessor Ascent, A Stryker Sustainability Solution, winner of the Practice Greenhealth Champion for Change Award, now works with almost 1,900 hospitals in the U.S. to divert 5.3 million pounds of waste from the landfills and saves some hospitals more than $600,000 per year.
Reprocessed devices typically cost 40 percent to 60 percent less than new ones. The Association of Medical Device Reprocessors (AMDR) estimates total U.S. hospital 2008 savings from reprocessing at $178 million. According to Thording, to date the FDA has only cleared approximately 2 percent of medical devices for reprocessing and, so far, not all hospitals have fully leveraged reprocessing to maximize savings. HE noted that third-party industry analysts project domestic market growth at more than 20 percent each year for the next five years.
Working Toward Greener Products
While impacts from operations are significant, healthcare suppliers also focus on reducing impacts through environmental product stewardship.
Al Iannuzzi, senior director of Product Stewardship and Green Marketing at J&J, says the company doesn’t necessarily focus on green products, “but on greener products, because every product has a footprint.”
Coleman Bigelow, J&J product director for Sustainable Brand Marketing, reinforces Iannuzzi’s statement by emphasizing that J&J is “committed to the continuous improvement of all our products” and while they don’t necessarily communicate all green benefits to consumers, they work hard behind the scenes to reduce product impacts.
This emphasis on product innovation and improvement at J&J is supported by their “Earthwards” tool which helps scientists and marketers assess environmental impacts from products, processes and packaging. The tool uses six criteria to measure impacts -- materials, waste, water, energy, packaging and innovation.
In the manufacture of a new AIDS drug, the tool helped developers eliminate 1.4 million kilograms of solvent. As part of their Health Planet 2010 goals, J&J also set a goal of implementing an electronics take-back program in all its regions so that "100 percent of waste electronic-based products are offered to be taken back for remanufacturing/reuse." Twenty-one percent of J&J's regions have the product stewardship program in place.
While sustainability leaders in the healthcare supply sector aren’t overtly selling us a “green aspirin," they do deliver greener pain relievers, cholesterol drugs, and blood pressure cuffs through renewable energy, cleaner water, greener chemistry and device re-use. Knowing that these companies are striving for drugs and devices that protect our planet while delivering relief might make us all feel better already.
Thera N. Kalmijn is founder and CEO of SureGround.
Top image by sxc user ravasolix. Credits for inset images: Stethoscope CC licensed by Flickr user diekatrin;
beakers of pills CC licensed by Flickr user erix!; cascading tablets and overturned pill cup by CC licensed by Flickr user e-magic.