“While the initial investment might be higher, embracing eco-friendly practices can lead to reduced energy consumption, waste reduction, and increased operational efficiency over time, ultimately resulting in cost savings,” says Nikkhil K Masurkar, CEO, Entod Pharmaceuticals. “Moreover, the global regulatory landscape and market trends increasingly emphasise sustainability, making it crucial for Indian pharma companies to align with these expectations to remain competitive in international markets and avoid potential market access barriers.”
Industry stakeholders say collaborative initiatives with industry associations, government agencies and research institutions can help in sharing of knowledge and resources, minimising the financial burden.
“As consumer awareness and demand for sustainable products grow, companies demonstrating environmental responsibility could gain a competitive edge, potentially justifying a measured increase in medicine prices for environmentally conscious consumers. Governments and international organisations may also offer financial incentives or subsidies to support the adoption of eco-friendly practices, helping to mitigate transition costs. By strategically planning the transition, prioritising high-impact changes, and gradually implementing improvements, the Indian pharma companies can effectively manage the challenges and reap the long-term benefits of a more sustainable and competitive future,” adds Masurkar.
Similarly, Arushi Jain, Director Corporate Growth & Excellence, Akums Drugs & Pharmaceuticals, says while transition to sustainable production processes may initially result in increased costs, the Indian pharma companies have potential to effectively navigate this transformation.
Focus on R&D and incentives
The government’s supportive policies, tax incentives or grants can alleviate the burden on pharma companies and accelerate the adoption of eco-friendly production methods, say experts.
Jain says R&D investments focused on green technologies and innovative solutions can reduce costs and enhance competitiveness. Collaborative efforts among pharma companies, raw material suppliers and other stakeholders can help distribute the financial burden of transitioning to eco-friendly practices, she adds.
A growing consumer demand for eco-friendly and sustainable products can serve as a market-driven incentive for pharma companies to embrace such practices and joint initiatives and partnerships can expedite the adoption of sustainable practices, say industry stakeholders.
“Consumers’ willingness to pay a premium for environmentally friendly products can offset the increased production costs associated with sustainability efforts,” says Jain.
An ecosystem should be developed to encourage use of green technologies. It should be tied to brand reputation.
“Adopting a phased approach to implementing sustainable practices, with a focus on high-impact areas initially, enables pharma companies to manage costs effectively and gradually transition to greener operations. Moreover, forging international partnerships and collaborations can provide Indian pharma companies with access to funding, expertise, and technology transfer for sustainable production processes, further enhancing their capacity to implement eco-friendly practices,” says Jain.
Role of raw material suppliers in climate action
Both industry stakeholders and experts say that pharmaceutical companies can play a crucial role in achieving the climate goals outlined in the Paris Agreement by engaging their suppliers in climate action and decarbonisation of the pharma value chain.
Masurkar says that the pharma companies should conduct a comprehensive assessment of their supply chain, establish clear communication and collaboration channels with raw material suppliers, prioritise sourcing raw materials from suppliers who have committed to sustainability, and provide technical and capacity-building support to suppliers to help them transition to more sustainable production methods.
The companies can even reward suppliers that demonstrate significant progress in reducing emissions and adopting sustainable practices. This can serve as an incentive for other suppliers. Experts say that the companies can collaborate with suppliers to explore carbon offsetting options, and provide transparent and detailed reporting on the progress of emission reduction efforts and sustainable practices throughout the value chain. This builds trust and accountability among stakeholders.
By actively engaging the raw material suppliers and implementing these strategies, pharma companies can contribute to the global efforts in restricting global warming.
