“Pharma finds its feet in fight against climate change” – Financial Times, January 2, 2019 [1]
“Climate change could be big business for pharma” – Axos, January 24, 2019 [2]
Two recent headers, each addressing the impact of climate change to the pharmaceutical industry, each taking a completely different stand. This implied contradiction clearly reflects the ‘double-role’ pharma companies play in the context of climate change as impact of global warming on the industry presents both challenges and opportunities, described below:
– Increased demand. Scientists predict that climate change will drastically change the global patterns of human diseases and potentially increase their incidence as well. Higher temperatures and increased natural disasters like floods will increase the prevalence of both water-borne and vector-borne diseases and enable these to spread to different geographical areas [3]. For example, the global exposure to the fatal mosquito-transmitted diseases like malaria and dengue is likely to greatly increase. Notwithstanding the severe consequences to human health as a result, the situation would, for pharmaceutical companies, present opportunities for increased future sales and investment in R&D to develop better treatment for such diseases. On the other hand, it will be challenging for Pharma companies to adapt to these changes, develop quality solutions to address these diseases and cope with the unpredictability of future demand.
– Increased frequency of severe adverse events. With natural disasters like hurricanes, floods, wildfires, droughts, superstorms occurring more often, the research and manufacturing facilities of pharma companies located in vulnerable areas are under threat [4]. If not sufficiently prepared for, power outages and water shortages could have severe consequences for these companies, such as the death of animals used for testing, drug supply shortages and loss of and/or delay of research findings. In addition, air pollution from massive fires can harm the temperature and air quality condition in these facilities and consequently hamper adherence to strict climate conditions required in these facilities [4].
– Need for tighter regulations While the above two points describe the impact of climate change on Pharma, it is important to understand the contribution the industry makes to climate change.During drug manufacture, use and disposal, Active Pharmaceutical Ingredients (APIs) as well as other chemical ingredients are released into the environment.APIs are released in high amounts to the environment during human and veterinary consumption of drugs, as between 30 and 90% of an oral dose is excreted in urine as an active substance.[5] Pollution from pharmaceutical products is harming ecosystems and leading to the development of Antimicrobial Resistance (AMR), which could mean a failure to treat previously treatable diseases and consequent death of patients. [6]. The realization of the severity of this consequence for the entire human population warrants swift and strict legislation such as treatment of Active Pharmaceutical Ingredients (APIs) and other chemicals before release, more efficient usage of water and mandatory reduction of carbon footprint.
AstraZeneca (‘AZ’), a British-Swedish, science-led biopharmaceutical firm with operations across the globe, has already been warned about the impact of climate change in September 2017 when it experienced first-hand, Hurricane Maria in Puerto Rico, grounds of one of AstraZeneca’s manufacturing facilities [xx7]. Although the physical facility was not spared by the storm and backup power was available, the magnitude of the storm forced AstraZeneca to halt production [7]. Like many of other plants out of a total of 25 plants on the island, it could not guarantee the safety of its 250 employees, while travelling to work. Moreover, supplies were hampered due to the closure of the island’s main port and damaged infrastructure. The total damage to AstraZeneca is unknown, however, it surely has woken them up to the threat of financial and reputational damages emanating from the vagaries of climate change.
AstraZeneca is already taking concrete steps towards climate change[8], with two main objectives:
- Limit the impact of climate change on its operations: Hurricane Maria in Puerto Rico has shown how vulnerable operations are to climate events. As a result, AstraZeneca announced it is planning to invest in more weatherproof buildings “for current and future conditions”[9].
Similarly, rainwater harvesting and treatment facilities are being installed – thereby reducing the dependency on water sources that could be affected by climate events. - Reduce its environmental footprint: AZ is one of the few biopharmas ranked A in the 2018 CDP ranking. It focuses on 3 sustainable development goals (SDGs): responsible consumption and production; climate action and partnership for goals. Use cases already implemented include a transition of the company vehicles to green fleets, the creation of tools to openly share eco-friendly chemistry knowledge, the design of waste management and circular processes and the development of predictive tools to identify environmental risks of medicines.
Within biopharma, AstraZeneca is arguably one of the most advanced in tackling climate change. However, there is still scope for AZ and the whole industry to further prepare to mitigate the adverse effects of climate change through creative business model innovations. We list here some of the measures that could potentially be investigated (the technical feasibility of some of these measures is yet to be validated):
- Virtual screening and testing: Climate change has a negative impact on the diversity and health of compounds and animals used in labs testing, thereby increasing R&D costs for biopharmas. Increasingly, computational models and machine learning allow performing part of the drug screening and testing virtually[10], thereby reducing the need for compounds and for animal testing, hence limiting the impact of climate change on operations.
- Pooled manufacturing facilities: Today, most Pharma companies produce and distribute solely their own products – leading to inefficient asset utilization, higher distribution costs, adverse environmental impact and longer lead times to react to unforeseen events. Shared manufacturing and distribution resources, through partnerships amongst biopharmas, could address the above problems and allow for faster response to surges in demand and a broader geographical coverage due to the expanse of pooled facilities. For example, Abbott and Boehringer Ingelheim already offer contract manufacturing for other organizations[11].
- Flexible production capacity: A significant proportion of treatments and vaccines are perishable and costly to store, thereby offering limited potential to maintain high inventory levels. As a result, some life-saving treatments are produced “Just-in-time” with an installed manufacturing capacity just sufficient to meet average demand, and hence not fit to cater for demand surges during adverse climate events.
An alternative approach is to design manufacturing lines with higher capacity than required. The production line would run most of the time below 100% capacity, with the additional buffer used in case of demand surges. To limit the negative impact on production costs, modularity in the drug production design is key, which will allow the buffer to be used interchangeably for various treatments and reduce changeover times[12].
A similar concept is widely used nowadays in the electricity production industry, where some plants run at sub-optimal production levels (e.g. 90% capacity) thereby freeing up a buffer allowing to meet sudden increases in demand, with the regulator subsidizing the flexibility provided.
Authors: Milou VAN DER VEN, Harshita RAMAKRISHNAN, Shobhit NAIR, François DELVAUX
Sources:
[1]https://www.ft.com/content/d672b65a-fe30-11e8-aebf-99e208d3e521
[3]:https://www.who.int/globalchange/climate/en/chapter6.pdf
[4]:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5773876/
[6]https://eeb.org/the-problem-of-pharmaceutical-pollution/
[9]https://www.astrazeneca.com/sustainability/environmental-protection.html
[11] http://theconversation.com/testing-drugs-on-animals-could-soon-be-a-thing-of-the-past-58183
[12]BCC Research, “Contract Pharmaceutical Manufacturing, Research and Packaging” (October 2009)
[13] https://www.pwc.com/gx/en/pharma-life-sciences/pdf/pharma-2020-supplying-the-future.pdf
Image Source: https://www.abcconsultants.in/pharma-lifesciences-devices-diagnostics/
Thank you for this more out-of-the-box choice of company to discuss the impact of climate change. I also wonder how the relationship between pharma companies such as AZ and health insurance and regulators will be impacted as increased sales due to increased rates of disease for pharma companies implies higher costs for the insurers and governments.
Interesting discussion on climate change impact on the pharmaceutical industry. I am really curious to understand more about biopharma and how this could impact food businesses (if there is any competition for land or something a like). Also curious to understand how can pharma companies develop faster drug development cycles to come up with new drugs for newer diseases that should arrive due to the change in climate.
Thanks for this interesting read! I never knew about the climate effects of drug production. Another related issue are the concerning levels of antibiotics and other pharmaceuticals in our rivers and oceans. Run-off from farms where livestock are pumped with antibiotics is threatening marine biodiversity as well as turning bodies of water into breeding grounds for drug resistant bacteria. The amount of estrogen (from birth control pills) in some bodies of water has even begun producing intersex fish. I wonder if the pharmaceutical industry could play any role further downstream in ensuring the proper treatment of human and animal waster to protect our water resources.