Merck & Co., Inc. has cut its energy consumption in the past five years by 50 percent, and has pledged to reduce total global greenhouse gas emissions by 12 percent by 2012. Bristol-Myers Squibb Company’s sales reps make their rounds of hospitals and doctors offices in a fleet of hybrid vehicles. GlaxoSmithKline redesigned its packaging to cut down the amount of materials it uses to pack its products.
It may be because of those images of used needles bouncing around in the surf and washing up on beaches that so many of us associate the pharmaceutical industry with nasty industrial waste. But a lot has changed in the boardrooms of the major pharmaceutical companies in recent years as the industry has made a huge effort to clean up its carbon footprint by greening up its operations.
It is not pure altruism that is driving the effort, though. Pharmaceutical companies, like many big businesses, have simply learned that green business practices are not only good for their image, but great for their bottom line. And these days, who doesn’t need an extra boost?
Businesses everywhere are trying to survive in an environment of uncertainty. Fluctuations in energy prices and overall insecurity in the economy are things that are out of their control, but that can eat away at profits.
Big Pharma has learned that green practices, like reducing energy consumption, is the next best thing to a healthy paycheck from a big customer.
Merck recently installed solar energy panels at its offices in New Jersey, which generate 7.5 percent of the power at the company’s headquarters and 12 percent at its nearby facilities.
Merck points out this one project cuts carbon dioxide emissions by 2,500 tons annually, which is about the same as taking 400 cars off the road. Just as important, though, it makes business sense. “We expect to realize significant energy savings by reducing the amount of electricity we need to purchase,” says Robert Colucci, Senior Director of Energy and Sustainability at Merck.
In a 2009 survey of pharmaceutical executives by PharmaManufacturing.com, 68 percent of respondents say their carbon footprint is smaller today than a year ago. And 88 percent say their commitment to green is primarily motivated by cost savings.
Mike Whaley, senior director of environmental health and safety at Allergan Inc., tells Tonic the company’s energy management, recycling and other environmental efforts save the company about $5 million a year, or about .5 to 1 percent of the company’s total revenue. One area where the company is focusing its efforts now is in the area of reducing greenhouse gases because the company sees a potential to earn money from trading those credits. “One of our plants is getting emissions credits already and we believe there is real value in those credits,” says Whaley. He also notes the industry has bought in because reducing waste makes great business sense. “The more efficient you are the more profitable you are,” he says.
One area where pharmaceutical companies are realizing major cost savings is by managing its energy use. Companies are upgrading to equipment that is more efficient, and have started to use alternative fuels. They are also seeking ways to source raw materials more locally to save on transportation costs. Many companies are rethinking their packaging to reduce the amount of material they need to buy and also looking at ways to reduce their chemical waste.
It seems to be working. In Newsweek magazine‘s 2009 green rankings, the pharmaceutical industry ranked third among all industries for its green practices. And three pharmaceutical firms — Allergan, Bristol-Myers Squibb and Johnson & Johnson — ranked in the top 20 of all US businesses.
“Big Pharma companies are at the forefront of climate initiatives,” says Walt Tunnessen, national program manager for the Environmental Protection Agency’s Energy Star program.
Oh, even those syringes that wash up on our beaches from time to time are getting the green treatment. At least three companies — Teva Pharmaceuticals (with their needle-free TJet), Inviro Medical and product design firm Cambridge Consultants — have developed new injection systems that use less material, are made of greener materials and require a lot less packaging to make sure they ship safely.
It would increase their green factor even more if they could only come up with a way to keep them from ending up on our shores, once and for all.
Photo via Semba Bioscience, photo via Cambridge Consultants.
