Blueprint for change concept climate bangladesh (bysted june 21)

The Triple Bottom Line

– our way of doing business

Gå hjem møde - Bysted June 21, 2012

Ole Kjerkegaard Nielsen, MSc, PhD

Programme Director Corporate Relations

Novo Nordisk A/S

Caring for people and society is at the heart of our heritage and values

August and Marie Krogh

Patient J.L.

15 December, 1922 (with his mother –

prior to insulin treatment)

Patient J.L

15 February, 1923 (after insulin treatment)

Defining moments have shaped our approach

Globalisation Social justice and economic

growth

Environmental protection

Occupational health and

safety

1960-70’s Enzymes

and allergy 1980-90’s

Genetic engineering and the impact on

environment

2001 AIDS drug court case in

South Africa and access to care

2005-2009 Oil for Food and business ethics

An ever changing environment affects our business

Source: IDF Diabetes Atlas, 5th edition, 2011

0

100

200

300

400

500

600

Millions of people w diabetes

+51%

552

2030 2011

366

Global diabetes epidemic Financial instability

We have an ambition to be a sustainable business

Our ambition is to strengthen our leadership in diabetes.

We aspire to change possibilities in haemophilia and other serious chronic conditions.

Our key contribution is to discover and develop innovative biological medicines and make them accessible to patients throughout the world.

The company seeks to conduct its business

in a financially, environmentally

and socially responsible way.

Patients

The TBL is a core principle in the Novo Nordisk Way

“Our business philosophy is one of balancing financial, social and environmental considerations – we call it ‘The Triple Bottom Line’”

- The Novo Nordisk Way

Our culture is also defined by TBL

Managing our

business sustainably

Responding to changing stakeholder expectations

Driving systemic change in areas

of strategic business interest

Learning with stakeholders

Value creation

Business integration

Innovating through

partnerships

A true leader in the transition towards global sustainable development

Risk mitigation Resilience Innovation

Sustainability strategy

Novo Nordisk has a patient centred business approach

From customer driven relationships to cluster development

Better treatment and care for all people with diabetes

Public awareness on the need to take action on diabetes

More resources to prevention and early detection of diabetes

changing diabetes® ambitions Addressing the ”rule of halves”

NADINE ABRAHAMS AND TAMSYN LA VITA

In good company, South Africa

Nadine has type 1 diabetes

A series of carefully selected programs strengthening the link between our TBL principle and our value creation…

…with the purpose to

• assess and communicate the impact of our initiatives for society and for us

• foster healthy:

- profitable business

- communities

- sustainable production

- planet

• emphasize the importance of the TBL principle integration in both internal and external stakeholders’ priorities

Integration

Scale

Expanding the pie • Capture opportunities that create value for both society and Novo Nordisk

Zero sum game • Re-allocate resources to contribute to society

Business basics • Embedded part of how Novo Nordisk does business

The right thing to do

• Adhere to requirements

• Getting engaged

Philanthropy • Passive approach to contribute to issues important to society

Value creation potential

Shared value to Novo Nordisk and Society

• Shaping society

• Scale

Full TBL integration will enhance value to Novo Nordisk and society

the Blueprint for Change Programme is based on a holistic shared value creation model

Developed by Novo Nordisk and Accenture

short term long term

min

imis

ing

d

ow

nsid

e

maxim

isin

g

up

sid

e

Tangible Value

Intangible Value

Risk Cost

Making a business case for corporate sustainability

Facing up to the climate change challenge

Changing Diabetes in China

Creating shared value through socially

responsible initiatives in the United States

Changing diabetes in Bangladesh through

sustainable partnerships

1st Blueprint for Change - Climate Strategy

Facing up to the climate change challenge

2003

2006

2010

Climate becomes a focus area

Novo Nordisk became the 10th member of the WWF Climate Savers Programme

Impact assessment of the climate strategy

Commitment to reduce 10% from 2004-2014

the climate change challenge

10% reduction in carbon emissions achieved five years ahead of time

• 28,000 tons of CO2 reduction equivalent to 4,500 fewer cars on the road every year

• 50,000 tons CO2 reduction through sourcing of wind power equivalent to taking a further 8,000 cars off the road every year

• The DONG Energy partnership – building of the world’s largest off-shore wind farm which will supply power equivalent to the annual electricity consumption of 200,000 households

• 30 new partnerships have been inspired by the Novo Nordisk model

• The energy savings have realised a total of 24 million USD in cost savings corresponding to a 10% reduction in global energy consumption

• The energy savings conducted from 2004 will continue to yield annual cost savings of app. 8 million USD in the future

• Half of all energy saving projects are paid back in less than one year

• Average pay back time is 1.9 year

• Intangible value of future risk mitigation, employee engagement, trust and reputation

VALUE TO NOVO NORDISK VALUE TO SOCIETY

SHARED VALUE

the climate change challenge

Decoupling environmental impact from sales

the climate change challenge

Index: year 2001 = 100

50

100

150

200

250

300

2001 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 2010

In

dex

CO2 Water Energy Waste Sales

Our partnership with DONG Energy leads to an innovative solution

Novo Nordisk saves energy at production

facilities

The financial savings are earmarked to sourcing of renewable electricity

The premium paid helps fund establishment of new wind farm in the

North Sea

100% of our electricity consumption in Denmark

is covered by the new wind farm

the climate change challenge

19

Bangladesh has a strong growing market-based economy with continuously improving quality of life

Gross domestic product, constant prices1

index

Human development index2

Slide no 20

index

1International Monetary Fund, World Economic Outlook Database. http://www.imf.org/external/pubs/ft/weo/2011/01/weodata/index.aspx. Accessed on January 2012. 2International Human Development Indicators. Regional and National Trends in the Human Development Index 1980-2011. http://hdr.undp.org/en/data/trends/. Accessed on February 2012.

situation

One-third of sales are expected to come from China and International Operations (IO) regions by 2020

Novo Nordisk, sales shares

Source: Internal data: SPP11 ex-factory sales, Insights & Forecasting, January 2012.

rest of the world China IO

Slide no 21

Note: IO is International Operations (Bangladesh is an IO country)

situation

Slide no 21

IO will account for 51% of the patient growth by 2021 driven by intensified treatment and lifestyle changes

Share of global growth (patients)

Source: Internal data: Insights & Forecasting, January 2012.

CAGR (2011-2021) - 5.87%

IO growth potential (drivers)

CAGR (2011-2021) - 7.03%

Slide no 22 situation

Slide no 22

Currently, many developing countries rely primarily on locally produced drugs

These are often counterfeits or generics of branded drugs

The rise in socioeconomic and educational levels is driving a market for more innovative and branded drugs

Rising standards of living and increasing life spans will shift focus away from infectious diseases

Infectious diseases Non-communicable diseases

As incomes and longevity rise, demand will shift from infectious to non-communicable diseases

Source: IMS Health. Pharmerging Markets. Opportunities for Growth and Change. IMS ,2008

cardio vascular cancer diabetes HIV malaria tuberculosis

Slide no 23 situation

Slide no 23

complication

However, healthcare systems will not be transformed as quickly as demand, creating a need for models to ensure both economic and public health sustainability

Demand for healthcare

Supply of healthcare

Early market entry and extensive partnering with government, non-governmental institutions and private enterprises with an aligned vision for removing barriers to care and improving defined outcomes

partnerships

private sector Significant private sector or social entrepreneurship investments, in addition to government interventions

sustainable business models

A compelling business case that encourages private institutions to invest in healthcare infrastructure and services

Slide no 24 situation

Slide no 24

Patients in the developing world face barriers to improve their health

Note: The model has been developed together with BADAS and Accenture, and is based on “Access to Health: Our Approach”, Novo Nordisk, 2011.

Slide no 25 complication situation

Availability

Affordability Quality for

patients

Accessibility Awareness

Lack of education and awareness about diabetes, its complications, and its cost

It is difficult for many to remember medication and follow scheduling, many fear of injections, many people living with diabetes are stigmatized and have psychological issues

Many cannot afford medicine and treatment services, the majority do not have health insurance and do not have access to other finance solutions, healthcare system is lacking necessary resources to treat diabetes

Issues and barriers

examples

Lack of high quality HCPs and clinics, long distance to facilities, and long waiting time for treatment

Some medicines/package solutions are not available in the country or in the region

More than one-third of all people with diabetes in least developed countries live in Bangladesh

IDF Diabetes Atlas, 5th edition, International Diabetes Federation, 2011.

40% of people living with diabetes in least developed countries (LDCs) are living in Bangladesh

In Bangladesh, diabetes is a

particularly daunting challenge, with more than 12% of the adult population affected by diabetes or prediabetes

Nearly half of the population with diabetes is undiagnosed

Among those with diabetes, only 1 in 3 people is treated, and roughly 1 in 13 achieves treatment targets

Slide no 26 complication situation

People living with diabetes, top 10 LDC countries

Slide no 26

Patients in LDCs face barriers in diabetes, which need to be addressed sustainably and in partnerships

Critical Success Factors Response to Issues

Interactions/Partners Issues and barriers Outcomes

• Too few people know about diabetes / lack of awareness

• Patients have difficulties adhering to guidelines

• Most people cannot afford medication

• Lack of sufficiently educated health care professionals

• Limited availability of HCPs

• Transportation issues

• Psychosocial issues

• Value to people with diabetes

• Value to society

• Value to Novo Nordisk

• Value to NGOs

• Value to public sector

• Value to social enterprises

• Value to private sector

non-exhaustive

The most important initiatives since 2001

2003 2004 2004 2007 2007 2008 2010 2010 2006 2007

Implementation of cool-chain system

Distance Learning Programme (DLP)

Bangladesh: a full fledged affiliate

Primary prevention of diabetes

Changing Diabetes in Children

LDC pricing policy

Distributor change

Improving DM through diabetes educators

Accredited Physician Scheme

Improving diabetes care at Thana level

Slide no 27 answer complication situation

Partnering with the local champion has been a key for the success created in Bangladesh

Slide no 28

Our key contribution is to discover and develop innovative

biological medicines and make them accessible to patients

throughout the world.

- Novo Nordisk Way

In Bangladesh no diabetic shall die untreated, unemployed or unfed. All people shall be provided with affordable healthcare services.

- BADAS vision

focus trust

consistency commitment

answer complication situation

Accessibility and availability of diabetes care have been addressed though DLP and distributor change

involved partners not involved partners

outer circle primary addressed issues secondary addressed issues not addressed issues

pie chart

Slide no 29

Interactions Response

Issues and barriers Outcomes

Distributor change

• Lack of insulin availability in the country

• Lack of proper insulin storage equipment

Increased sales volumes and market potential

Improved access to new growth possibilities

Increased insulin distribution from 16% to

53% of population

Improved availability of and accessibility to HCPs

on a sub district level

Increased sales volumes (9.5%-point) and market potential

Improved access to new growth possibilities

Distance Learning Programme

Increased sales volumes and market potential

Improved access to new growth possibilities

v

Improved quality of more than 4,500 HCPs

Improved quality of care and patient knowledge

about diabetes

Improved patient outcomes (3%-6%

decrease in HbA1c level)

Contribution to device, MI penetration, and market potential

Improved reputation and stakeholder support

Improved access to new skills & patient pools

• Poor accessibility to HCPs

• Quality of diabetes care is poor

• Lack of awareness and knowledge among patients about diabetes

answer complication situation

Affordability and accessibility of diabetes treatment has been improved through LDC pricing policy and CDiC

involved partners not involved partners

outer circle primary addressed issues secondary addressed issues not addressed issues

pie chart

Slide no 30

Interactions Response

Issues and barriers Outcomes

LDC pricing policy

Increased sales volumes and market potential

Improved access to new growth possibilities

m

Overall reduced cost of insulin and complementary

products

Decreased cost of treatment from 41% to 12% of the

disposable income

Improved affordability from 10% to 40% of the

population

Increased sales volumes (2.3%-point) and market potential

Improved market share with 12%-point in the first 2 years

• Affordability is a very significant issue in Bangladesh

Increased sales volumes and market

V

Improved access to new growth

c

Improved quality of life for 1,077 children

Increased focus and awareness about T1D

Accessibility to care has improved

Treatment targets improved due to CDiC camps

Increased market potential and stakeholder support

Improved access to new growth possibilities

Employee engagement

Changing Diabetes® in Children

• Affordability is poor in the country

• Lack of awareness about type 1 diabetes

• Lack of specialized and dedicated resources

• Accessibility to care is challenging

answer complication situation

Novo Nordisk has been effective in addressing societal issues due to a number of sustainability considerations

Partnership development

Success requires extensive partnering with government, NGOs and other institutions and private enterprises with aligned visions and goals

Private sector involvement

In addition to government interventions significant private sector or social entrepreneurship investments are required

Sustainable business models’ creation

A sustainable business case is needed to incentivize private institutions to invest in healthcare infrastructure and services

Slide no 31 answer complication situation

In order to drive more value, a stronger partnering model around the patient centric issues is advised

Slide no 32 next steps answer complication situation

Critical Success Factors Interactions/Partners Issues and barriers Outcomes

• Too few people know about diabetes / lack of awareness

• Patients have difficulties adhering to guidelines

• Most people cannot afford medication

• Lack of sufficiently educated health care professionals

• Limited availability of HCPs

• Transportation issues

• Psychosocial issues

• Value to people with diabetes

• Value to society

• Value to Novo Nordisk

• Value to NGOs

• Value to public sector

• Value to social enterprises

• Value to private sector

non-exhaustive

Making change happen There is only one way

“Be the change you want to see in the world.”

Mahatma Gandhi