Академический Документы
Профессиональный Документы
Культура Документы
Jason Krobatsch
Professor Brown
Strategic Corporate Social Responsibility
April 26, 2016
Table of Contents
Abstract... 3
Introduction. 3
Company Overview 4
Sustainability Report Analysis.... 6
Other CSR Efforts... 9
Case Study: Sovaldi...... 13
Discussion..... 15
CSR Suggestions... 15
References. 18
3
Abstract
initiative efforts and investments. Experts agree that (a), (c) and especially (e), together with
remaining trustworthy for patients in clinical trials, are among the most relevant ones for the
pharmaceutical industry (Nussbaum, 2009, p. 69).
There are also several obstacles pharmaceutical companies may face when it comes to
CSR, including (a) integrating ethics and business strategy, and leading by example; (b) shifting
from secrecy to communication and dialogue; (c) viewing CSR as an opportunity, not an
obstacle; (d) extending CSR to business partners, suppliers and customers and (e) overcoming
insufcient regulatory guidelines to distinguish compliance (doing whats legal) and ethics
(doing whats right). Another key challenge is drug affordability, as governments are
increasingly shifting health care costs to patients (Nussbaum, 2009, p. 75). Additionally, CSR
plans on a global scale may have unexpected consequences. For example, a company may
provide medical training to healthcare workers in a developing nation. However, doing so may
marginalize other healthcare workers who did not receive the training this company provided
(Droppert & Bennett, 2015).
Many companies publish a CSR plan that may appear to be substantial to an uninformed
public. However, a company needs to evaluate the plan in its entirety to see the true value and
authenticity of their CSR mission. The following examines Gilead Sciences CSR efforts,
company mission, and issues relating to patient access to medicine.
Company Overview
Gilead Sciences is a United States based biopharmaceutical company founded and
headquartered in Foster City, California. The company began operation in 1987 and is
incorporated in the state of Delaware. Gilead began being traded publically in January 1992 on
the NASDAQ stock market (Gilead Sciences, 2016). As of April 26, 2016, one share cost
$101.31 (Wall Street Journal, 2016).
Although the company does not have a clear mission statement, they state in a frequently
asked question section of their website that, Gilead Sciences is a research-based
biopharmaceutical company that discovers, develops and commercializes innovative medicines
in areas of unmet need (Gilead Sciences, 2016). A biopharmaceutical, also known as a
biological medical product or biologic, differs from other pharmaceuticals because they are made
from sources such as human, animal, or microorganism sources. They are intended to treat,
prevent, or diagnose diseases (U.S. Food and Drug Administration, 2016). Examples of biologics
include vaccines, gene therapies, cellular therapies, and allergenic extracts, as well as blood,
cells, and tissues used in transplants or transfusions (U.S. Food and Drug Administration, 2016).
Gileads 22 products are broken down into several categories (Gilead Sciences, 2016):
HIV/AIDS
o Atripla
o Complera
o Emtriva
o Genvoya
o Odefsey
o Stribild
o Truvada
o Tybost
o Viread
o Vitekta
Liver Diseases
o Harvoni
o Sovaldi
o Hepsera
o Viread
Cardiovascular
o Letairis
o Lexiscan
o Ranexa
Inflammation/Respiratory
o Cayston
o Tamiflu
Hematology/Oncology`
o Zydelig
Age-Related Muscular Degeneration
o Macugen
Antifungal
o AmBisome
Gilead is also in various phases of research and development for four HIV/AIDS
products, nine liver disease products, seven hematology/oncology products, three cardiovascular
disease products, six inflammation/respiratory products, one diabetic nephropathy product, and
one Ebola virus product (Gilead Sciences, 2016).
In 2015, the company had $32 billion in revenue, with a comprehensive income of $17.8
billion. Their 2015 revenue reflected an increase of 28.7% from 2014s revenue of $24.9 billion.
This is a significant increase from the previous three years, where the companys revenue was
near $10 billion each year (Wall Street Journal, 2016).
is only one drug, when the company produces 21 others. The report makes a clear distinction
between organic solvents and green solvents. Organic solvents are petroleum based. Green
solvents are different because they can be reused or recycled (Gilead Sciences, 2015). While
only one of Gileads products uses a petroleum based solvent, their report is still filled with
greenwashing. Gilead has implemented solvent recovery and recycling practices in select active
pharmaceutical ingredient manufacturing systems, which has reduced the companys solvent
usage in certain products by up to 70 percent (Gilead Sciences, 2015, p. 17). The report also
states, Gilead conducts environmental risk assessments on our products prior to seeking
marketing authorization from the European regulatory agency. These assessments are designed
to predict the amount of active pharmaceutical ingredients that may enter the environment, along
with the impact these compounds may have (Gilead Sciences, 2015 p. 17). Although Gilead is
conducting these tests, it is purely a legal requirement from the European Medicines Agency
(European Medicines Agency, 2015).
Section three of Gileads 2014 Sustainability Report discusses giving. The first three
sentences of this section are very telling. In 2014, Gilead significantly increased funding to help
improve the lives of people suffering from serious diseases who lack access to the treatment they
need. We know we need to do more. We also know we are making progress in improving
worldwide access through Gileads Patient Assistance Program and tiered-pricing model
(Gilead Sciences, 2015, p. 19).
Gileads philanthropic efforts are splintered into many different categories.
Beliefs
o People of all backgrounds should have access to the same healthcare.
o Medicines should be available to all people who need them.
Actions
o Works with partners and grantees to help patients overcome barriers to sufficient
care.
o Assists community organizations by supporting disease awareness programs.
o Partners with community organizations to raise awareness about pre-exposure
prophylaxis (PrEP) among high risk HIV populations.
o Tiered pricing around the world. Gilead sets prices according to a countrys specific
situation, even if those prices result in little or no profit to us (Gilead Sciences, 2015,
p. 20).
o Voluntarily licensed medicines to generic drug manufacturers in India, China, and
South Africa.
o Launched the Frontlines of Communities in the United States (FOCUS program) in
2010 to address barriers to HIV and HCV care.
Has tested 1.5 million people for HIV through this program (does not cite
whether this was in 2014 or since the programs 2010 inception)
The fourth and most robust section focuses on environmental sustainability. Gilead
claims that their environmental efforts differ based on each location. They initially give a lot of
detail regarding their main, 28 building campus in Foster City, CA, about 20 miles from San
Francisco (Gilead Sciences, 2015). About 4,000 people are employed here, making up half of
Gileads global workforce. Gilead implemented variable airflow exhaust hoods, which in total
save enough energy to power 700 households annually (Gilead Sciences, 2015). They also aim to
reduce total water consumption on this campus by 15% by 2015. This is necessary because of the
drought in CA, and a follow-up report has not been made. Gilead has a variety of transportation
programs, including a shuttle to a nearby transit center, a rideshare program, a $100 monthly
mass transit voucher, 84 electrical car charging stations, and an onsite bike repair service (Gilead
Sciences, 2015). The report then highlights environmental changes at six other locations. Some
of these include a reduction in liquid nitrogen use, intense recycling programs, and sustainable
buildings. Although these improvements affect more than half of Gileads workforce, they
operate in 43 different cities globally and fail to address environmental issues as a whole, even in
a broad sense.
This report analyses Gileads 2014 sustainability, a year in which their revenue more than
doubled from the previous year (Wall Street Journal, 2016). A 2015 Sustainability Report has not
yet been made public. The 2014 Sustainability Report provided readers with an email address for
further sustainability inquiries, however, multiple attempts to contact the company resulted in an
invalid address message.
Other CSR Efforts
Outside of the 2014 Sustainability Report, Gilead lists their other responsibility efforts.
Some are covered in the 2014 Sustainability Report and others are not. Below, each program is
briefly explained, along with benefits and available metrics.
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The Truvada for PrEP Medication Assistance Program assists eligible HIVnegative adults in the United States who do not have insurance obtain access
to Truvada (emtricitabine and tenofovir disoproxil fumarate) for PrEP (preexposure prophylaxis) (Gilead Sciences, 2016).
o Gilead Solutions
The Cayston Access Program assists people with cystic fibrosis and members
of their care team with insurance verification, referral to participating
specialty pharmacies, claims support and co-pay assistance. As part of this
program, Gilead also provides assistance to qualified patients in the United
States who cannot afford to pay for Cayston (aztreonam for inhalation
solution) (Gilead Sciences, 2016).
o Ranexa Connect
Support Path assists eligible hepatitis C patients in the United States access
Sovaldi (sofosbuvir) or Harvoni (ledipasvir/sofosbuvir) (Gilead Sciences,
2016).
Co-pay assistance
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o Zydelig AccessConnect
Gilead is committed to ensuring that patients with CLL, FL and SLL can
access Zydelig and has launched Zydelig AccessConnect to provide assistance
to appropriate patients who are uninsured, underinsured or who need financial
assistance to pay for the medicine (Gilead Sciences, 2016).
Informational hotline
Will provide medicine if a laps of coverage occurs for more than five
days
Analysis: All of Gileads United States based programs focus on providing information
and assistance to people regarding paying for their medicine. The separate programs are
excessive, since the majority of them follow Gileads mission for their original U.S. Advancing
Access program. Gilead could streamline these programs to make it easier for patients and
investors to understand.
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o Hepatitis Treatment
Gilead also states that there are 400,000 cases of VL per year. While
they are helping one-fifth of people infected with this disease, there is
more they could be doing.
o Access Partnerships
Analysis: Gilead uses their knowledge on a global scale by making certain medicines
accessible through licensing agreements with generic manufactures. They also operate off a
tiered pricing scale globally. However, metrics fail to be provided in some instances. In others,
the information is weak or outdated. Additionally, people in developed countries are being
charged much more for the same drugs.
Gilead claims to have donated $280 million worldwide, but does not say over what
course of time (Gilead Sciences, 2016). Regardless, this stands in the shadow of their $32 billion
revenue. They also provided 1,200 grants globally through the Gilead Foundation since its
inception (Gilead Sciences, 2016). Gilead discusses grants and the Gilead Foundation twice on
their responsibility page, but they are one in the same. The grants work to educate or provide
medicine to people based off of Gileads disease focus areas. A benefit of this is that community
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organizers can submit proposals for what would work best in their area of the world. However,
this also benefits Gilead by allowing them to not be directly tied to a program. Gilead would
receive very little backlash if they didnt renew a grant, but would receive much backlash if they
started a program in a developing country on their own and then decided to suspend it.
Gilead has a very hands-off approach when it comes to corporate giving. Their main
services for the people are: information about access to care, co-pay assistance programs,
licensing agreements to produce drugs cheaper for developing countries, and providing grants.
However, we must also examine how Gilead generates their income.
Case Study: Sovaldi
In 2014, Gilead came under fire when it released Sovaldi, a new medicine to be included
with others as part of a hepatitis C treatment. Unlike hepatitis A and hepatitis B, there is no
vaccine available for hepatitis C. Sovaldi works by blocking the protein the hepatitis C virus
needs to reproduce (Peterson, 2014). Long-term effects of hepatitis C include serious liver
damage or liver cancer. Sovaldi was shown to cure hepatitis C in 94% to 99% of cases in as little
as 12 weeks. Until this point, hepatitis C management included a long series of shots or other
long-term drug treatments, with cure rates of only 50% to 60% (Court, 2016).
When it was first released, Sovaldi cost $84,000 for a 12 week treatment. This averages
$1,000 per day. Stakeholders had many opinions regarding the cost of the treatment. An
estimated 3.2 million Americans have the hepatitis C virus (U.S. Food and Drug Administration,
2014). The most common injectable treatment had severe flu-like side effects, so many patients
chose not to continue with treatments, which could lead to liver cancer over the long-term.
Doctors were pressured by insurers not to prescribe Sovaldi as often. However, doctors wanted
to prescribe the treatment because it was in the patients best interest. Put in perspective, if each
of the 3.2 million people believed to be living with hepatitis C were treated with Sovaldi, it
would cost nearly as much as the $260 billion spent in 2013 on prescription drugs in the United
States (Peterson, 2014). Gilead admitted the cost of the drug was high, but defended it by saying
it eliminates the need for long-term hepatitis C treatments and saves in the cost of treating longterm hepatitis C complications, such as liver cancer (Peterson, 2014). About half of people with
hepatitis C are on veterans, prisoners, uninsured or on Medicaid, so taxpayers would be
responsible for a portion of the cost (Peterson, 2014). Lawmakers, possibly influenced by the
cost Sovaldi would have on Medicaid, probed Gilead regarding the cost. Gilead said it tiers its
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pricing based on a country's per-capita income. For example, people in Egypt pay about $900 for
a full treatment, 99% less than people in the United States (Peterson, 2014). Based on this
structure, people in the United Kingdom would pay $57,000 for a full treatment and people in
Germany would pay $66,000 (Peterson, 2014).
Sovaldi was initially being developed by a company named Pharmasset. In 2011,
Pharmasset projected the drug would sell for $36,000 for a 12 week treatment. However, Gilead
bought Pharmasset, then hiked the price of the drug, which was not yet being produced (Court,
2016).
Although Gilead dropped the price of Sovaldi, it still lists for $81,000. In 2015, Sovaldi
topped the list for the most expensive prescription drugs in the United States. This was followed
by Harvoni, another hepatitis C drug produced by Gilead, which is a combination of Sovaldi
with another hepatitis C drug (Court, 2016).
The United Stated Senate Finance Committee launched an investigation into the cost of
these medicines. They found that a return on investment for purchasing Pharmasset and
additional research were not key in determining the price of Sovaldi. However, they note Gilead
spent billions of dollars in the purchase of Pharmasset and in the clinical testing of Sovaldi
(Court, 2016). In a statement, Gilead said the prices of both Sovaldi and Harvoni reflect the
innovation of these new drugs and that curing hepatitis C will result in savings over the long
term (Court, 2016). Internal documents showed Gileads motive was profit based, even as their
own analysis suggested that a lower cost would allow more patients to be treated (Court, 2016).
Despite the controversy, some economists believe the price is fair. Craig Garthwaite, a health
economist who teaches at Northwestern University said, We always wanted a treatment for hep
C. We got one, now we have to pay for it (Court, 2016).
Consumers and insurance companies rarely pay the full list price of drugs. During March
2016, customers and insurance providers paid anywhere between $24,455 and $75,600 for a
treatment of Sovaldi (Court, 2016). This is due to negotiations with insurance providers and
patient access programs offered by Gilead. Eligible uninsured people can obtain Sovaldi at no
cost. However, people with insurance may be at a disadvantage. Gilead offers Sovaldi half off to
Medicaid customers. Once Medicate pays their part, customers still need to pay between $8,000
and $10,000 (Court, 2016). This is similar for people with high insurance deductibles. Many
factors determine the actual patient cost. This disparity highlights major issues underlying the
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United States healthcare system. Even is insurance providers cover the drug, it results in higher
premiums for all customers.
It is important to note Gileads revenue more than doubled the year Sovaldi was released
and has grown substantially since (Wall Street Journal, 2016). And although Sovaldis costs are
criticized, they are not as expensive as cancer treatments, a possible result of hepatitis C (Court,
2016). Cancer treatments are not considered pharmaceuticals and not factored into drug costs
since they are administered by a doctor (Court, 2016).
Discussion
The pharmaceutical industry faces a delicate situation in terms of CSR. While these
companies are in the business of doing good, they are also responsible to shareholders and use
profits to develop new medicines.
Gileads CSR efforts are very superficial. Their 2014 Sustainability Report lists some
positive things the company is doing, although it was likely made in response to outrage over the
cost of Gileads new drug, Sovaldi. The efforts made were existing plans that Gilead chose to
call highlight.
Gilead does excel in philanthropic efforts, such as grants and donations. They also license
drugs to manufactures oversees in order to produce them for developing countries at an
affordable rate. Their tired pricing also helps makes drugs affordable to people in developing
countries. However, this has resulted in extremely high prices in the United States and other
developed countries.
In order for Gilead to stay in favor of stakeholders, they need to develop an authentic
CSR plan. It is not necessary for Gilead to cover all areas of CSR, but they should pick a few and
excel in these areas. At first glance, their CSR efforts seem sufficient. But looking slightly
deeper into the information reveals an unauthentic and unorganized approach. As other
pharmaceutical companies develop stronger CSR plans, Gilead will be left behind and highly
criticized if they do not revise their efforts.
CSR Suggestions
Gilead should streamline and revise their CSR efforts to be more authentic. The
following plan uses existing efforts, along with some new ideas, to create a genuine and
comprehensive CSR plan.
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New CSR Mission: Gilead strives to make a progressive impact on the health of people
across the world, focusing on access to care and caring for the environment.
When Gilead reports on their CSR advancements, they should focus on the most
important points. Information about a weekly farmers market should not be the same length as
information about HIV testing in developing countries. Gilead needs to focus on doing some
things perfectly, not everything poorly. They also need to provide metrics. For example, Gilead
says they phased out single-use shipping containers for reusable ones, but do not say not say how
much waste was reduced.
Because Gilead is a global company, they face some difficulties streamlining CSR
efforts. However, they can create company-wide campaigns that will look more authentic. By
averaging statistics, locations that cannot participate in a CSR effort will be averaged with the
companys efforts as a whole. Gilead could implement the following:
A solar energy effort by Gilead is one way the company can be environmentally
conscious while also saving money in the long run. Since Gilead has a large campus in
California, much of the renewable energy efforts can be implemented here, to offset other
locations around the global there this is not possible.
Gilead should also streamline their patient access plans. In the United States, Gilead
provides insurance assistance and co-pay discount plans for most of their products. However,
they have different names for these programs, even though they accomplish the same goal.
Gilead could create a directory of the contact numbers, but house it under the same program
name. Although this will appear to be less patient access programs on the website, it will be one,
strong, authentic program.
Gilead should do the same with their efforts in developing countries. Instead of giving
vague descriptions, Gilead should give hard numbers about what they are really doing. Although
licensing agreements and tiered pricing isnt an extremely noble effort, it is a step to help people
and Gilead should highlight this. They also need to stop double dipping, by including grant
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statistics under two separate sections of the website. Gilead provided 80 grants in 2014. They
should highlight this and describe some, if not all, of the grant programs.
It appears Gileads CSR efforts were unauthentic and rushed. They tried to mirror CSR
plans of other companies and did not focus on their specific industry. Instead of looking at
everyone else, Gilead should focus on what they do well. The company should also consider how
much they charge for products, or face more investigations and government oversight.
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References
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