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Novartis Corporate Responsibility Report 2017 | Contents 2 Corporate Responsibility Report 2017 Novartis Corporate Responsibility Report 2017 | CONTENTS 2 Contents 2017 HIGHLIGHTS 3 ABOUT NOVARTIS 5 MESSAGE FROM THE CHAIRMAN 6 THREE QUESTIONS TO THE CEO AND THE GLOBAL HEAD OF CR 8 CORPORATE RESPONSIBILITY AT NOVARTIS 10 Novartis and the UN Sustainable Development Goals 10 Governance of our corporate responsibility activities 10 Setting priorities – 2017 materiality assessment 11 Stakeholder engagement 13 Improving transparency 14 Financial, environmental and social impact valuation 14 ACCESS TO HEALTHCARE 17 Availability of medicines 19 Pricing 20 Intellectual property 21 Healthcare system strengthening 21 Patient assistance programs 23 INNOVATION 25 R&D for unmet medical needs 27 R&D for neglected diseases 27 Drug resistance 27 Business model innovation 28 Innovative technologies 29 PATIENT HEALTH AND SAFETY 30 Pharmacovigilance, safety profile and quality of drugs 31 Health education and prevention 32 Counterfeit medicines 34 ETHICAL BUSINESS PRACTICES 35 Ethical and compliant behavior 36 Responsible supply chain management 38 Respect for human rights 40 Responsible use of new technologies 41 Animal testing 42 ABOUT THIS REPORT 44 Performance indicators 2017 45 Novartis GRI Content Index 49 Appendix: external initiatives and membership of associations 55 Appendix: corporate responsibility issue cluster and topic definitions 56 Cover photo Adiarra Traore undergoes a Novartis and the United Nations Global Compact 58 health check at the Bougoula-Hameau clinic in Independent Assurance Report on the Novartis 2017 Mali, West Africa, as part of a clinical trial to corporate responsibility reporting 60 assess an experimental medicine for malaria called KAF156, being developed by Novartis and several partner organizations. Novartis Corporate Responsibility Report 2017 | 2017 highlighTS 3 2017 highlights ucts in the EU and launched them in several European markets. The introduction of affordable, high-quality generics and biosimilars improves access to medicines 46 m for patients worldwide. Patients reached through access programs Even the most effective treatments have limited impact without skilled healthcare personnel who can prevent, diagnose and treat diseases. Healthcare sys- tems also need strong regulatory systems, which are vital to helping lower-income countries improve health- care capabilities and patient outcomes. 15 m We work on a variety of programs aimed at reinforc- People reached through health education ing healthcare systems. The Novartis Foundation and programs partners launched Better Hearts Better Cities, an initia- tive to address the high rates of hypertension in low- income urban communities. Better Hearts Better Cities brings together multisector partners to co-design and implement interventions beyond healthcare. The approach 115 000 is being tested in Mongolia, Senegal and Brazil. Employees trained on the Code of Conduct Partnerships are key to expanding access. Novartis joined 22 pharmaceutical companies to launch Access Accelerated, a global initiative to advance access to treatment and care for chronic diseases in lower-income countries in collaboration with the World Bank Group USD 22 m and the Union for International Cancer Control. Novartis Invested in research for neglected tropical is also partnering with Last Mile Health to support the diseases launch of the Community Health Academy. Last Mile Health partnered with the government of Liberia to suc- cessfully establish its integrated community health worker program in Liberia, and Novartis will provide a Expanding access to healthcare USD 1 million donation, spread over three years, to help We have made progress in further expanding access to scale up health worker training programs in sub-Saha- our medicines, and we have taken steps to embed our ran Africa through the academy. access efforts more deeply in our day-to-day business. The Novartis CEO is co-leading the Health Delivery As of 2018, we plan to systematically integrate patient Systems initiative of the Bill & Melinda Gates Foundation access strategies into all our new medicine launches. CEO Roundtable. This group aims to map company pro- In 2017, we expanded our access-to-healthcare pro- grams to build health capabilities, identify opportunities grams. Novartis Access, our portfolio of medicines to for synergies and collaboration, and propose potential help fight chronic diseases in lower-income countries, joint initiatives that could amplify these individual efforts. signed agreements with three countries to launch the Novartis Access, in collaboration with Novartis program, bringing the total to six. Launched in 2015, the Oncology, launched a new partnership with the Ameri- portfolio is available to governments, nongovernmental can Society for Clinical Pathology and the American organizations and other public sector healthcare provid- Cancer Society to improve the management of cancer ers at a price of USD 1 per treatment, per month. In 2017, in sub-Saharan Africa. And Sandoz expanded its part- we were able to deliver more than 685 000 treatments nership with World Child Cancer to help children access – each providing a one-month supply of medicine – to treatment in developing countries. The agreement now patients, reaching a total of more than 800 000 treat- covers three additional countries: Ghana, Mexico and ments delivered since launch. Starting in 2018, we will Myanmar. broaden the program into the private sector in select countries. The Novartis Malaria Initiative continued its long- Innovation standing efforts to provide our high-quality antimalarial, Innovation in its many forms supports our efforts to grow achieving yet another milestone with more than 850 mil- in emerging markets and around the world, and can help lion treatments, including 350 million pediatric treat- us respond to patients’ unmet medical needs in both the ments, delivered without profit to malaria-endemic coun- developed and developing worlds. Infectious diseases tries since 2001. still take a large toll on lower-income countries. Novartis Our generics division, Sandoz, a global leader in bio- and Medicines for Malaria Venture launched a patient similars, gained approval for two new biosimilar prod- trial in Africa for KAF156, a novel compound against multi- Novartis Corporate Responsibility Report 2017 | 2017 highlighTS 4 drug-resistant malaria. KAF156 is the first compound replace the three divisional policies that currently gov- from the imidazolopiperazines, a novel class of antima- ern how we interact with patients and healthcare profes- larials, to enter Phase IIb combination studies. sionals, beginning on March 1, 2018 (except at Alcon, Scientists from Novartis, the University of Georgia where it will take effect at a later date). and Washington State University in the US reported the We have also taken a series of steps to strengthen discovery and early validation of a drug candidate for our anti-bribery compliance program, including updat- treating cryptosporidiosis, a diarrheal disease that is a ing our Anti-Bribery Third-Party Guideline and further major cause of child mortality in lower-income countries. strengthening our anti-bribery due diligence process. Currently there are no vaccines or effective treatments. All Novartis Group company associates are required The discovery and preclinical findings were published in to complete integrity and compliance training. In 2017, the journal Nature. almost 115 000 employees completed the Code of Con- We invested in the discovery of new antibiotics and duct course. All allegations of any inappropriate behav- in the fight against antimicrobial resistance (AMR). In ior are taken very seriously and are actively investigated, 2017, we reported progress in researching a novel anti- and – where substantiated – appropriate disciplinary biotic candidate, LYS228, for multidrug-resistant infec- action is taken. In 2017, the Business Practices Office tions caused by the Enterobacteriaceae family of Gram- investigated 2 031 cases related to misconduct cover- negative pathogens. We also joined the AMR Industry ing 2 574 allegations; 1 147 allegations were substanti- Alliance to ensure that we collectively deliver on the spe- ated and resulted in 521 dismissals or resignations. cific commitments made in the Industry Declaration on We continued upgrading our compliance monitoring AMR and the subsequent AMR Roadmap. efforts by conducting 230 country and monitoring visits in 2017, an approximate increase of 40% from 2016. Patient health and safety Working more closely with patients is an important part Evaluating our financial, of improving health outcomes. We reviewed and revised environmental and social impact our Commitment to Patients and Caregivers, to help bet- We have developed, tested and applied a methodology ter explain what they can expect from Novartis. It will be for valuing the financial, environmental and social impact published in early 2018. our business activities have on society. In 2016, this Counterfeit medicines pose a significant threat to methodology showed that our activities contributed USD public health. To protect patients from fakes, we take a 65 billion to the global economy, as well as an estimated diverse and multipronged approach. During 2017, Novartis 260 000 jobs beyond those held by our own employees. Global Security, with the support of local law enforce- In addition, our social impact – including employee devel- ment and health authorities, initiated seizures of counter- opment and
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