Unjela Kaleem
Globally, the pharmaceutical industry has a crucial role, sitting at the nexus of innovation, ethics, and public health. As the world grapples with pressing challenges such as climate change, antimicrobial resistance (AMR), and persistent health inequities, the role of pharmaceutical companies extends far beyond profit margins. It’s about delivering social impact while safeguarding environmental and governance standards. The latest 2024 Access to Medicine Index sheds light on how well—or poorly—pharma companies are embracing the Environmental, Social, and Governance (ESG) principles.
Pharma’s ESG Landscape in 2024
The Index underscores the growing alignment between access to medicine and ESG frameworks. Companies that rank highly are those that view access to healthcare not merely as philanthropy but as a core business imperative, compelling evidence that socially responsible strategies can coexist with innovation and profitability.
However, challenges persist. While the Index applauds strides made in areas such as drug affordability, R&D for neglected diseases, and collaborations with low-income countries, it also highlights gaps in sustainability and governance. Bridging these gaps is not just a moral responsibility—it is central to the industry’s long-term success, especially when stakeholder expectations are more compelling than ever.
Social Impact: Access and Affordability as Core Priorities
The "S" in ESG—social impact—takes center stage in the Access to Medicine Index. With millions lacking access to essential drugs, the Index evaluates companies on their ability to address inequities in healthcare delivery. Leading organisations stand out for innovative pricing models, tailored access strategies, and efforts to combat diseases that disproportionately affect low-and middle-income countries (LMICs).
One of the most striking findings from the 2024 report is the increasing emphasis on public-private partnerships. Collaborative models, such as tiered pricing and donations, are helping to address systemic challenges in global health. For example, several companies are making strides in tackling neglected tropical diseases (NTDs) through partnerships with governments and nonprofits. Yet, affordability remains a persistent issue. While companies are expanding access, the affordability of life-saving drugs, especially in LMICs, continues to draw criticism. ESG-conscious companies must integrate affordability as part of their business models, recognizing that access should not be dependent on economic inclusivity.
Environmental Accountability: Beyond Carbon Footprints
Pharma’s environmental footprint is an under-discussed yet critical aspect of its ESG responsibilities. While many organisations have adopted net-zero pledges, the 2024 Index reveals varying degrees of progress in implementing these commitments. Sustainable manufacturing practices, waste management, and water conservation are among the areas where pharmaceutical companies can make a tangible difference.
One of the key environmental challenges unique to the sector is the impact of antibiotic production on AMR [1]. Poorly regulated manufacturing processes often lead to the release of active pharmaceutical ingredients into waterways, potentially exacerbating resistance. Companies are taking proactive steps to mitigate these risks, but a widespread industry action is required.
Governance: Ethics and Accountability in Focus
Governance, the "G" in ESG, is crucial to delivering on environmental and social promises. The 2024 Index evaluates companies on their governance frameworks, emphasising transparency, ethical business practices, and anti-corruption measures.
Despite more companies are adopting robust governance structures, with clear accountability mechanisms for ESG targets, the report flags inconsistencies in reporting and a lack of standardisation in ESG metrics across the industry. Greater transparency is not just about appeasing investors; it is a critical trust-building exercise with the communities these companies serve.
Lessons from the Leaders
The 2024 Access to Medicine Index highlights several pharmaceutical companies excelling in integrating ESG principles. Novartis, ranked first, leads with comprehensive access strategies for diseases like Malaria and Chagas, demonstrating a strong commitment to affordability and inclusivity across LMICs. Sanofi, ranked third, has re-entered the top five through robust governance and a diverse R&D pipeline targeting non-communicable diseases and other global health challenges. Takeda, ranked ninth, integrates access-to-medicine plans into its business framework, focusing on affordability and healthcare system strengthening, though its initiatives remain geographically limited. These companies illustrate how ESG-driven strategies can align innovation with global health equity.
A key success story is AstraZeneca, which jumped from 15th to seventh position after introducing a new affordability-based pricing strategy and expanding its Healthy Heart Africa program, reflecting the company’s renewed focus on social impact. AstraZeneca’s rise highlights how aligning business strategies with ESG principles can deliver measurable results.
Access to Medicines Index 2024
Source: Access to Medicines Foundation. "2024 Access to Medicine Index", https://accesstomedicinefoundation.org/sectors-and-research/index-ranking, accessed 3/12/2024.
The Road Ahead: From Rankings to Realities
The Access to Medicine Index is not just a ranking system; it is a call to action. It sets benchmarks that encourage pharmaceutical companies to rethink their ESG strategies, aligning them with global health priorities. But the road ahead is not without hurdles. For one, companies must move beyond surface-level ESG commitments and embed these principles into their core operations. This means rethinking supply chains, adopting sustainable R&D practices, and ensuring that governance structures are both inclusive and transparent. Moreover, the industry must address its dual responsibility of driving innovation while ensuring that these innovations are accessible and affordable. This requires a fundamental shift in how success is measured—not just in terms of financial returns, but also social impact and environmental stewardship.
The 2024 Access to Medicine Index provides a timely lens into the pharmaceutical industry’s evolving ESG journey. It highlights leaders who are leveraging ESG principles to drive transformative change and serves as a reminder to those who risk falling behind in a rapidly changing landscape.
As global environmental challenges intensify, the pharmaceutical industry has a unique opportunity to lead with purpose. By embracing the lessons of the 2024 Index, companies can not only enhance their ESG credentials but also play a pivotal role in building a healthier, more equitable, and sustainable world.
[1] Measuring Managing Mitigating - White Paper – (Commonwealth Scientific and Industrial Research Organization (CSIRO) White Paper
Unjela Kaleem is a guest blogger and public affairs and ESG consultant partner with Shawview Consulting.
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