This website is no longer being updated. Please visit GBCHealth’s new website at: www.gbchealth.org.

Leading Corporations, NGO on Shared Value Implementation & Best Practices

Competing by Saving Lives: Sharved Value Story of Implementation - A FSG and GBCHealth Webinar

April 13, 2012

Shared value offers firms an opportunity to grow their businesses while also transforming health outcomes for underserved populations in developing countries and emerging markets. In this webinar moderated by FSG's Kyle Peterson, corporate and NGO representatives shared their experiences in implementing shared value within the global health sector and identified the key principles needed for success.

Speakers

  • Kyle Peterson, Managing Director, FSG, Moderator
  • Karl Hofmann, President and CEO, Population Services International
  • Duncan Learmouth, Senior Vice-President, Developing Countries & Market Access, GlaxoSmithKline
  • Ole Kjerkegaard Nielsen, Director, Triple Bottom Line Management, Novo Nordisk
  • Kathy Pickus, Vice President of Global Citizenship and Policy, Abbott

Intorduction

Mr. Peterson gave an overview of shared value: Until recently, pharmaceutical and medical device companies have focused disproportionately on high-income countries. While this has created shared value in these markets, too often health needs in low-and middle-income countries have been left unaddressed. Pharmaceutical industries have responded to this imbalance with corporate social responsibilities and philanthropy. These programs redistribute profits to the underserved in low- and middle-income countries. In the next decades, these countries will be the fastest growing markets in pharmaceuticals and medical devices. Shared value offers firms an opportunity to simultaneously and more sustainably grow their businesses and transform the health outcomes for underserved populations in these countries.

Pharmaceutical and medical device companies can create shared value in global health on three mutually reinforcing levels:

  • Enable local cluster development, through education and behavior change campaigns, health system strengthening and improving the policy and regulatory environment
  • Reconceive products and markets by developing new products and adapting existing products
  • Redefine productivity in value chains by, for example,  localizing R&D and creating local supply chains and manufacturing

Five Principals of Shared Value Implementation

  • Focused and determined leadership at the CEO and country levels
  • A culture of innovation and learning reflected in structures and incentives
  • New approaches to measurement that track the link between business value and patient lives improved
  • New skills in identifying and acting on unmet health needs
  • New partnerships for shared value insights and implementation.

Panelists

Panelists then shared their experiences with implementing shared value.

GSK | GSK has created the Developing Countries and Market Access unit (DCMA), which focuses exclusively on 50 least developed countries. Its goal is to increase the volume of medicines sold in these countries five fold over the next five years. DCMA’s strategy is built around four key pillars of business: vaccines; registration/portfolio, including expanding the portfolio from infectious diseases to include non-communicable diseases; healthcare infrastructure; and its people engaging with local governments, health experts and communities.

There are three strategies to achieve the purpose:

  • Making products affordable by capping the price of medicines and vaccines at 25 percent of the UK price and reducing the pack size
  • Realigning incentives to focus on volume-based sales, new customers and a longer time horizon to achieve a return on investment
  • Reinvesting 20 percent of profit to building the local health care infrastructure

Novo Nordisk | Diabetes is soaring in China, which has 92 million diabetics. Most people with diabetes haven't been diagnosed and only one in 10 who has been diagnosed successfully manage their condition. In addition, the low level of physician training and awareness poses a challenge.

Novo Nordisk is creating shared value around diabetes in China through market expansion and cluster development.  Novo Nordisk grew into underserved segments by working within the health system to improve diagnosis & disease management.

The company is both targeting the population that is being treated for diabetes and expanding access to the underserved.  This includes starting by focusing on hospitals in tier 2 and tier 3 cities. Novo Nordisk has linked health impact and business success by: training physicians, segmenting the population to find opportunities for greatest impact and tracking progress to adjust and optimize program for best results.

Abbott | Abbott is working with the non-profit CARE to expand access to affordable medicines and health products in rural India. Abbott leveraged lessons learned from the business it acquired, True Value, which reaches rural Indians. Abbott also formed a new kind of corporate-NGO partnership with CARE that stresses longterm access.

Population Services International (PSI) | PSI formed several partnerships with the private sector, including a hand washing promotion initiative with Unilever, the affordable malaria medication campaign with Novartis, and a social franchising marketing effort with Merck.

Through these experiences, PSI identified four key elements to implement shared value:

  • Focused and determined senior management
  • A desire for mutual learning and shared innovation
  • New approaches to measure and track the link between bottom line and health impact
  • New partnerships for share value insights and implementation

Summary of Outcomes

Participants learned about key issues and rewards in implementing shared value. Despite the challenges, speakers saw opportunities to improve health and business in a sustainable way through shared value. Many saw shared value as the future of corporate engagement on global health. Speakers reiterated that companies need to have a strong commitment from their leadership, a desire for mutual learning, the ability to measure and track progress, and an openness to new partnerships in order to successfully implement shared value initiatives.