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Human rights due diligence of pharmaceutical companies: An important first

8 June 2016
by Guest author

ForumRBCDamiano de Felice, Deputy Director Strategy, Access to Medicine Foundation (@damidefelice)

On Thursday 9 June, I will moderate the first ever session on pharmaceutical companies to be held at either the UN Forum on Business and Human Rights or the OECD Global Forum on Responsible Business Conduct. For starters, these conferences represent the two most important annual events organized by international organizations to promote corporate respect for human rights.

There are several reasons why it is surprising that a panel on pharmaceutical companies has been absent for so long.

First, the OECD understands very well the importance of tailoring international standards to different business sectors. It has already produced a Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas and, together with the Food and Agriculture Organization, a Due Diligence Guidance for Responsible Agricultural Supply Chains. It is currently developing a Due Diligence Guidance on Responsible Garment and Footwear Supply Chains.

Second, several scholars examined whether pharmaceutical companies – whose business is to research, develop, produce and market essential health products – are living up to their human rights responsibilities. Under international law, the right to access to essential medicines is a key component of the right to the highest attainable standard of health (i.e., the “right to health”). It is easy to see how some business decisions from pharmaceutical companies – such as favouring generic competition or avoiding excessively high drug prices – can have significant influence on whether vulnerable individuals can access crucial health products. In 2008, Paul Hunt – then UN Special Rapporteur on the right to health – even published specific Human Rights Guidelines for Pharmaceutical Companies in relation to Access to Medicines.

Third, the pharmaceutical industry seems to be ahead of the curve in terms of the adoption of human rights principles and norms. A recent report from the Business and Human Rights Resource Centre invited 180 companies from different industries to complete a questionnaire on their actions on human rights. The pharmaceutical sector was the only one where all companies had already adopted a human rights policy.

How can we then explain the absence of panels on pharmaceutical companies at the UN and OECD fora?

Conversations with business executives, government representatives and civil society activists pointed at two hypotheses.

To begin with, pharmaceutical companies are already under the attention of an older constituency of vocal health activists. This may have led those working on responsible business conduct to concentrate on other, less-crowded niches (such as extractives and consumer goods). For example, last year’s UN Social Forum – which focused specifically on “access to medicines in the context of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, including best practices in this regard” – saw almost no participation from the usual attendees of business and human rights events.

Additionally, most business and human rights specialists are experts in human rights abuses committed by companies while sourcing and manufacturing their products (that is, in the upstream side of global value chains). With the exception of a few reports on ICT companies and the right to privacy/freedom of expression, most business and human rights organizations focus on “upstream” topics, such as extractive companies and indigenous’ rights, apparel companies and workers’ rights, seafood companies and human trafficking, food/beverage companies and land rights, etc.

Against this background, the most important challenges for pharmaceutical companies lie in the way in which they market and distribute their products (that is, in the downstream side of global value chains).

Starting the conversation: the Access to Medicine Foundation

The willingness to explore what human rights due diligence means in the downstream side of global value chains and to understand the differences with its implementation in the upstream side was the trigger for the OECD to co-host a session on pharmaceutical companies with the organization whose strategy I lead, the Access to Medicine Foundation.

The selection of our organization was not by coincidence. The Access to Medicine Foundation is a non-profit organization that guides and incentivizes pharmaceutical companies to do more to facilitate access to medicine. In particular, we:

  1. Build multi-stakeholder consensus on a list of ambitious yet achievable actions for pharmaceutical companies to improve access to medicine;
  2. Analyse, measure and publicly report on the extent to which companies meet these expectations; and
  3. Use and diffuse this information to catalyse corporate change.

Our flagship product – the Access to Medicine Index – is a biennial report that ranks 20 of the largest pharmaceutical companies in the world on the basis of their performance against more than 70 indicators that have been agreed upon by multiple stakeholders after a year-long consultation process.

The panel at the OECD session will build on the work of the Access to Medicine Index because of the alignment between our indicators and the most authoritative international standards on responsible business conduct: the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises.

I can offer three examples of this alignment here below.

  • The UNGPs and the OECD Guidelines both require business enterprises to adopt a policy commitment to respect human rights. The Access to Medicine Index assesses how companies integrate access-to-medicine issues within their corporate strategies and governance structures.
  • International standards emphasize the importance of interactive processes of engagement with relevant stakeholders. We reward companies that, through engagement with global and local stakeholders, better incorporate local needs and perspectives within their access strategies, increasing the likelihood of uptake and success.
  • All business enterprise are expected to carry out human rights due diligence, that is, an ongoing process by which they assess actual and potential human rights impacts, integrate and act upon the findings, track responses as well as communicate how impacts are addressed. The Access to Medicine Foundation raises the bar at several points of the pharmaceutical business model. For instance, leading companies are expected to take socio-economic factors into account when they set the prices of their drugs, and to differentiate both between countries and within different national population segments. Proof of strategy implementation is provided in the form of examples of corresponding price and sales data.

The success of the multi-stakeholder process of consensus-building at the Access to Medicine Foundation represents a very good starting point for a detailed conversation on how to ensure responsible business conduct from pharmaceutical companies. On 9 June we will discuss how to build on it and progress even further.

I hope to see you there.

Useful links

The 2016 OECD Global Forum on Responsible Business Conducts takes place in Paris on 8-9 June 2016. The event will be webcast live starting at 9.30 am CET on 8 June 2016.

The session on the pharmaceutical industry and responsible business conduct will start at 4.30 pm CET on 9 June. It will include:

  • Catherine Dujardin (Public Health Expert, Belgian FPS Foreign Affairs, Foreign Trade and Development Cooperation) will present what a government can do to incentivize pharmaceutical companies to contribute to the achievement of the Sustainable Development Goals, in particular with respect to the quality of medicines;
  • Sarbani Chakraborty (Head of Global Health Policy, Merck Serono) will comment on how to best integrate access to medicine in the business strategy of a pharmaceutical company;
  • Helena Viñes Fiestas (Head of Sustainability Research, BNP Paribas Asset Management) will share her experience as member of the Expert Review Committee of the Access to Medicine Foundation and investor lead for a collaborative engagement on clinical trials transparency;
  • Herman Mulder (National Contact Point, Netherlands) will introduce the role of NCPs in providing accountability for the actions of pharmaceutical companies, building on a recent Specific Instance at the Dutch NCP on the use of medicines in lethal injections;
  • Patrick Durisch (Health Programme Coordinator, Berne Declaration) will discuss the responsibilities of pharmaceutical companies with respect to the globalisation of clinical trials.
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