Introduction

Pharmaceutical industry
The pharmaceutical sector differs in many respects from the chemicals manufacturing industry as a whole. The pharmaceutical industry typically deals with developing, producing, and marketing drugs licensed for use as medications. They are subject to various laws and regulations pertaining to the patenting, testing and ensuring safety and efficacy and marketing of drugs Most importantly . innovation plays a pivotal role in this industry; the industry is therefore research intensive. Taking the industry as a whole, production is typically 30 40% of top line, R&D 10 15% and sales and marketing 15 20%. Research is proportionately more important in large innovative firms which deal in Brand medication, production in the generic sector and marketing in self-medication. Pharmaceutical companies are typically allowed to deal in generic and/or brand medications and medical devices. A generic product is defined as a copy of an existing product sold by a firm other than the originator at a price substantially below that of the original product . Channels of marketing vary depending on the kind of product. Prescription-only products are promoted directly to physicians by medical sales personnel/Medical representatives and advertising in the medical press. Only products specifically permitted for self-medication, so called over-the-counter drugs, may be purchased freely and advertised to the final user through other direct channels of marketing. The pharmaceutical industry sector is typically characterized by frequent innovation and intense international competition.

Major Challenges
Reducing energy consumption and carbon footprint This is one of the major focus areas for the pharmaceutical industry these days. Many articles which
are being published describe the need for and advantages of sustainable processing. However, achieving this is not as easy as reducing the amount of business travel, using energy -saving light bulbs or even introducing renewable energy sources into the business. More drastic steps must be taken to make a business sustainable. A few companies have already taken some tangible steps in reducing their carbon footprints and environmental impact by drastically changing production processes. The production process of some of the well-known APIs (Active Pharmaceutical Ingredients) of the beta-lactam type, traditionally, start with an already green process step i.e. the fermentation of a microorganism yielding an aqueous slurry which contains both the producing biomass, by-products and the pre-requisite

ingredient for the product. The ingredient must then be obtained in a purified form from this broth. This is typically where the non-green processing begins i.e. isolating a pure product requires the use of many chemical e.g. several types of organic solvents. Furthermore, for converting the ingredient antibiotic into the various APIs, a vast range of other chemicals is required. The use of many different chemicals has a negative impact on the environment e.g. the use of volatile organic substances often leads to hazardous emissions, and energy consuming solvent production and recovery processes. Apart from this, the use of a lot of chemicals in the production process also has implications for the impurity profiles of the antibiotic products themselves.

Stringent Regulations Reducing ecological footprint and achieving more sustainable production of Pharmaceuticals could
help create a better future. That it requires considerable efforts in R&D of green processes for the manufacturing of green antibiotics is not the main problem; the biggest challenge comes in the stage of final market introduction because of registration issues - Henriette de Braal. According to the research paper cited above, in a highly regulated market, t e hurdles for the h authorization of alteration in manufacturing processes of APIS are extremely high. In markets where APIs are supplied to different kinds of customers, the complexity of regulatory authorization procedures for switching to APIs produced with the altered processes forms an almost insurmountable barrier. These high-regulatory barriers reduce the incentives to develop environment-friendly processes to replace traditional chemical ones. Moreover, the costs and efforts required to obtain these authorizations for changes may often be too high to be compensated for by the perceived added value of the green product, which in return reduces the return on investment. Consequently, the pharmaceutical industry till this date uses old technologies and lacks focus on continuous improvement and innovation in manufacturing processes. E.g. in the well-known case of Purimox (DSM Anti infectives, The Netherlands), the enzymatic version of amoxicillin and Purilex (DSM), the green equivalent of cephalexin, the purity improved significantly compared to its other chemical counterparts. Nevertheless, this alteration was considered a major change that required a Prior Approval Supplement in the USA and a Variation Type II in Europe. Needless to say, the overall approval process took several years and hundreds of applications. The solution to this problem can be a more holistic approach from the side of the authorities based on the cumulative benefits to society of developing green APIs. This may help in creating congenial circumstances for encouraging such highly beneficial innovations instead of blocking them. Current regulatory initiatives in USA and Europe which aim at accommodating continuous improvement and

innovation in pharmaceutical manufacturing should focus o adjusting the regulatory barriers to n facilitate the speedy implementation of green processes for API manufacture, without compromising on patients' safety. One could, for an instance, consider fast track approval trajectories for such innovations, if developed by well known companies that have a proven track record in quality and compliance. The fact that APIs developed from these new technologies have consistently appeared to be of higher quality and to have better safety characteristics should also be taken into account. Many companies are continuously looking for alternative ways to improve production processes as we recognize that sustainable production is the way forward. Specific tools are currently being developed that will take this approach one step further, by calculating the impact that individual process changes have on the overall company's ecological footprint. It can be calculated that, which process optimizations should be favoured over others. In future, specific targets for ecological footprint reduction might even be set at production as well as at management level. Without this continual and persistent focus, irrespective of the regulatory environment, such improvements will never be achieved.

Pharmaceutical industry in China

China's pharmaceutical industry was, traditionally, a high-consumption and high-pollution industry. But today, environmental protection has become a required focus for pharmaceutical companies in China. In this case study we will look at the typical issues pertaining to the Chinese pharmaceutical sector and their solutions. The Pharmaceutical companies in china nowadays follow the garden -style factories model. Since the implementation of GMP (Good Manufacturing Practice) in 2004, companies are paying great attention at beautifying their environment.

Requirements of GMP: y Green land must not be included within industrial tracts and if special production processes
(like APIs) need green land, the area of green land shall not exceed 20% of the total area of the factory.
y

The environment around the workshops in the pharmaceutical industry should be afforested. Exposed soil areas should be minimized within the factory.

The factory environment should be able to reduce the risk of raw materials or drugs being contaminated

Factories should have a clean production environment, and the grounds, roads and transportation in the factory must not pollute the production of drugs

The overall planning and layout of production, administration, living and ancillary zones should be well spaced and the movement directions of workers and goods inside the workshop and factory should be incorporated in the design.

There are some minor issues attached with it e.g. complaints from nearby residents about strange odours, but it can addressed separately. Nonetheless, these requirements have helped the Chinese industry to reduce pollution, facilitate factory maintenance and cleaning and guarantee the quality of drug production. SFDA (State Food and Drug Administration) of China accepted 33 000 applica tions for drug registration in 2009. Of that, 2 609 applications were approved, 15 000 applications were not approved and 7 999 applications were returned back to the applying companies. -China Chemical Reporter.

Biodiversity conservation

Global environmental concerns most commonly discussed in pharmaceutical companies environmental annual reports are global warming and ozone depletion. Social responsibility, another main element of sustainability, is presently largely directed towards customers and workers. With respect to the political execution of sustainability, the pharmaceutical industry campaigns robustly for self-commitment and opposes energy taxes. The pharmaceutical sector s input to sustainable development is only limited to the control of potentially dangerous processes, the proficient use of resources, the cutback in emissions and the discarding of unused medicines and packaging. There are some sustainability issues specific to the sector that is not on the agenda. Some of them are biodiversity, animal ethics, biotechnology, genetic engineering and the affect of consumption. Biodiversity conservation is an issue which cannot be disassociated from sustainable development. By signing the Convention on Biological Diversity (CBD, 1992) 175 nations acknowledged their dependence only upon their local biodiversity and also that of other countries. Germany, for example, ranks third among the biggest importers of medical plants in world, after Hong Kong and Japan. Apart from imports, there are other direct biodiversity users , such as the pharmaceutical industry. The most important reasons for the increasing interest in biogenetic resources are the thin profit margins of synthetically developed drugs, advanced methods for screening biogenetic materials and an increasing demand of drugs made from natural extracts. The requirement for international protection of biodiversity is arising because biodiversity in present market structure can be treated as a public good and the cost of biodiversity loss has been externalized in the past. The bargaining authority of the pharmaceutical sector, a loosely defined property rights system and

the abundance of species presently inflict a direct negative impact on the market value of biodiversity. Apart from this, the patent system assists the rather ineffective research and development methods of big pharmaceutical firms, which ignore or exploit without return the existing knowhow of traditional healers as compared to the effectiveness of different botanical species. Biodiversity prospecting is the solution to this problem which is a mechanism aimed at discovering new pharmaceutical products and conserving endangered ecosystem. It is done by calculating an upper bound on the value of the rare species. In this approach we consider the sensitivity of the value of marginal species to that of the probability of the detection and assumptions considering the cumulative profitability. If all species are capable sources of leads, most would be redundant and the marginal species will be close to worthless. If none of the species are likely source of leads, it is very unlikely that two or more will prove redundant but also quite unlikely that any species will be of any value. Increasing the likelihood of success with any species can have two offsetting effects on the value of marginal species. Firstly, it increases the expected return in case the species is tested, but, secondly it also decreases the expected return as there is more likelihood of another equally valuable species being discovered first. By calculating the probability of success at which these effects can be balanced, we can find the upper cap of the value of any marginal species. Another term which has become very popular lately is Eco-Innovation . Martina Blum-Kusterer and S. Salman Hussain,in their research paper define eco-innovation as, changes to the production process that decrease the product s impact on the natural environment and/or increase intra generational or inter-generational equity . Since the production process applies to the cradle-tograve life-cycle estimation approach, eco-innovation can take place even outside the factory premises.

Growing Awareness of Sustainability in Pharmaceutical Sector

"Sustainability is about creating long-term shareholder value by embracing opportunities and managing risks derived from social, environmental and economic factors. As with any business issues, sustainability risks and opportunities will be different for each individual company"- (Ernst & Young definition of Sustainability). The understanding of sustainability as a main concern of companies performance has considerably developed over the last years. There are many reasons for this development. On one hand, global trends e.g. climate change, demographic challenge, global growth of population, etc. have led to rising concerns about the future of nature and the continued existence of people, especially in developing nations. On the other hand, ambiguous developments

in management of a large number of globally acting companies have led to mistrust and a debate regarding the importance of values and ethics as part of high-quality and sustainable corporate governance practices. The Pharmaceutical sector has long familiarity in the field of sustainability and gave way to a systematic companies approach. Various environmental accidents have led to increase concern about safety practices in the Pharmaceutical Industry. Especially, the Seveso disaster in July 1976 in the region of Milan/Italy culminated in the highest known exposure to Dioxin (TCDD) in residential areas and led to studies and implementation of standardized industrial safety regulations. As an example, the EU industrial safety regulations are named as the Seveso II Directive which forced much harsher industrial regulations. Since then, governments and multilateral organizations across the globe have undertaken active initiatives for protecting the environment. Particularly in Germany and on a European level a rather widespread environmental legislation process has been imposed during the last decade. Initiatives like the Emission Trading Scheme (ETS), REACH (Registration, Evaluation, Authorisation and Restriction of Chemical substances), voluntary programs, carbon or energy taxes, and standards on energy efficiency are some of the examples of effective efforts which have gained importance on companies processes, not only in the Pharmaceutical sector.

References