Patrice started working at Novartis in South Africa, having previously practiced clinical high-risk obstetrics in Durban and Cape Town. For the last 17 years he has been working at the global level in Novartis including leading two drug development franchises and running global drug safety and epidemiology. He spoke with Denise Delaney about bringing his experience to the company’s long running corporate responsibility and materiality initiatives.
What have been your key areas of focus since taking on the role?
The materiality assessments, which we started in 2006, identified the areas we needed to work on. My responsibility has been to build on that and to add insights based on my experience. There are four areas that are important now: integrating access to medicines strategies into our new product launches – starting from the drug development process; prioritising global health challenges beyond malaria and leprosy such as Chagas disease and Chagas-related heart failure; reinforcing corporate responsibility in countries, especially with regards to the environment, including carbon, water and recycling; and finally working with partners to strengthen the health systems in areas where we can have the most impact.
Novartis has recently completed its third full materiality assessment. How does this process strengthen the company’s corporate responsibility approach?
The team, as part of the materiality analysis, realised early on that access to medicine is important not only for patients but also for our external stakeholders and our associates. At that time, we established an internal access to medicines committee in order to further integrate our strategy in this area. This process has now matured to the extent that we recently approved and are rolling out a set of principles on integrating access strategies into all our new product launches moving forward. This is an example of how you can use a materiality analysis to drive the company strategy.
Whatever we discover from the materiality analysis, and what we deem is important, we present to the Executive Committee and the CEO. If they approve our proposal, then that becomes integrated into the normal way of doing business at Novartis.
What has changed since Novartis started conducting materiality assessments in 2006?
As we have progressed, from 2006 to 2013 through to the latest assessment in 2017, the rigour of the methodology has changed. From an early quantitative approach, we have added qualitative and correlation methodologies, which allow us to look at the interactions between what internal and external stakeholders find important.
We have also created a toolkit that enables countries to do their own materiality analyses – China is very different from Egypt, the US from India – to see if there is a correlation from what we see at a global level versus what we see at a local level.
On what issues has Novartis made the most progress?
I have talked about the progress we have made in integrating access to medicines into the business, and now we are looking at all the things that enable access, including affordability – we are looking at the income pyramid to ensure that we introduce medicines at prices that are affordable to communities, adaptive R&D to ensure that drugs can be administered at the village level, and health system strengthening which is an exciting and very important part of our work.
What has been outstanding for me in terms of maturity and progress is the work to understand the business models and ecosystems for patients who are at the bottom of the income pyramid. The team has been really good at trying out different business models. There is the Healthy Family program in India, which has been extended to Kenya and Vietnam. This program covers patients that are living in villages, conducting more than 44 million educational interactions with patients and providing more than 4 million prescriptions. We have also introduced the Novartis Access program, a portfolio of treatments, including both branded and generic products across diseases and conditions such as breast cancer, hypertension and diabetes, which is offered to institutional customers at US$1 a month per treatment.
When we discover and develop new medicines we also need to understand how we can make those new medicines available throughout the whole income pyramid in a sustainable way. We have made significant progress in this area as well.
Can you give an example of where the materiality assessment has influenced strategic decision making?
Beyond access to medicines, one of the interesting areas where we have made progress based on the insights gathered through the materiality assessment is in integrity and compliance. One of the things often mentioned in past stakeholder interviews was the lack of transparency in different domains from a compliance perspective. For instance, they were criticising the fact that our policy and guideline review process was not transparent, which was a particular concern to investors. They also mentioned that they would like to have more information about the causes of misconduct than just our remedial actions, and they were interested in getting more information about risk assessment in integrity and compliance – and also activities that we derive from that analysis.
These insights were interesting to our compliance colleagues and they helped them strengthen their approach in terms of transparency and change their way and attitude in terms of speaking with investors, which was beneficial for both parties. This is a strategic change that resulted from the materiality assessment.
Another very important area for the company where I believe we need to change our practices is in third-party risk management. We conducted a materiality assessment for our procurement and third-party risk management. What we gathered as insights was then fed into a process, now running, which is working to change our practices. This is another example where the materiality has resulted in strategic changes.
We’re discussing central business topics – access to medicines, compliance and integrity. Do you sense corporate responsibility is merging with the core business?
Yes! When I joined it became clear to me that the way we strengthen corporate responsibility is by integrating it into the normal business. The only way to do that is to include the business leaders from R&D, development, manufacturing, commercialisation, etc., into the corporate responsibility leadership team. The leadership team we have now reflects the full spectrum of global leaders in all functions in Novartis, each of whom report to an Executive Committee member.
What are you thinking for the future of materiality at Novartis?
The team has started doing some scenario analysis work, using human rights as a pilot. The reason we chose it for the scenario analysis is because human rights – including the right to health – is a highly material issue for our sector. Through the scenario analysis we have the chance to really drill down and discuss with associates our human rights obligations and help make it much clearer what human rights actually means in a company like Novartis.
Expect to see greater convergence of corporate materiality and materiality as it is used in the financial world. We haven’t really understood how these two things belong together – what is the impact of, say, access to medicines on financial disclosure, or the impact of third-party risk management in the supply chain with regards to financial disclosure obligation? There is much interest in this convergence, but I am pretty sure that it hasn’t fully been figured out and there is still much work that needs to go into this area.
Environment and human rights are not always immediately seen as the most material for Novartis for an outsider. Why are they important to Novartis?
If you want to attract talent, it is clear that the younger generation takes the environment and human rights very seriously when deciding if they want to join or stay within the company.
Novartis operates in countries around the world and the feedback we get from our associates who live in these countries is that the impact on the environment and how we treat people is something that is not only personal but can affect our brands. How we operate is just as important as the medicines we try to discover.
On a global level, the feedback that we are getting from investors is that a more sustainable world is one that is more economically viable. 15% of investors are now asking questions about the environment and human rights.
The intersection of environment and global health is also becoming clearer. Disease patterns are shifting because of climate change, vectors are moving. We have to stop thinking about these issues in a siloed way and try to understand how they relate.
Finally, it might not sound like a material issue now, but being the one of the largest pharmaceutical companies, we need to come up with solutions for generations born into these environments, if we take access to medicines, human rights and the environment seriously. The number of refugees is growing worldwide – 65 million and counting – and how we get medicines to these populations in a sustainable way is a big challenge and something that is on our mind here.