In this blog we highlight the role pharmaceuticals can play in preventing a climate catastrophe. Pharmaceuticals may be responsible for as much as 25% of the NHS' carbon footprint in England but decarbonizing pharmaceuticals is challenging. A new OHE report published today sheds some light on the challenges that the industry faces to decarbonization and makes recommendations for how they can be overcome. Progress within the industry requires coordinated action by industry, the UK government, and the NHS. Without this, it will not be possible to secure a green era for pharmaceuticals in the UK or globally.
The 27th annual UN meeting on the climate (COP 27) will be taking place in Sharm El-Sheikh in Egypt from 6 to 18 November this year, one which has seen devastating floods in Pakistan and South Sudan and record-breaking heatwaves around the world (see graphic below). It is hoped that country leaders will agree on further steps to limit global temperature rises and ultimately avoid large-scale climate catastrophe in coming decades.
COP 27 attendees are expected to focus on how to help countries prepare for the consequences of climate change (including loss and damage finance) and, as always, reductions in greenhouse gas emissions and progress on net zero carbon targets, an area where the pharmaceutical industry, in collaboration with national governments and health providers, can have a significant impact.
The world is markedly hotter now than 40 years ago, partly due to greenhouse gas emissions associated with industry
Source: Data.GISS: GISS Surface Temperature Analysis (v4): Global Maps (nasa.gov)
Achieving net zero targets will not be possible without decarbonisation of industry
More than 70 countries have set net zero carbon targets towards this end. The UK government for example has committed to becoming net zero carbon by 2050. Achieving this will not be possible without reductions in emissions from industry as a whole, which accounted for 18% of the UK's carbon footprint in 20201.
The pharmaceuticals industry specifically contributes substantially to health system carbon footprints.. Most of the emissions associated with pharmaceuticals (typically 70-90%2) are beyond the direct control of the companies- hidden within a complex and global supply chain. The pharmaceutical supply chain involves processing of raw materials, often derived from oil, transport associated with moving medicines and their intermediates around the world, as well as the downstream emissions associated with the use and disposal of the final pharmaceutical products. The NHS estimates that pharmaceuticals account for 25% of the NHS' carbon footprint.
The government’s Build Back Greener strategy contains detail on how the government plans to support industry to become net zero, with a focus on switching to hydrogen as a source of fuel, carbon capture, usage and storage (CCUS) and energy efficiency. However, the overall strategy has been criticized for lacking detail on how exactly emissions reduction will be achieved. More importantly, the pharmaceutical industry faces unique challenges to decarbonization compared to other industrial sectors that will require targeted action to overcome.
The pharmaceutical industry faces a set of unique challenges to decarbonisation
Given the contribution of pharmaceuticals to emissions, decarbonization of pharmaceutical supply chains would make significant contributions to national net zero carbon targets. The issue that companies face is that there are several features of the industry which make decarbonization more difficult to achieve than in other industries:
Challenge 1: Pharmaceutical products are highly refined, and safety for the end-user is prioritised by all stakeholders, limiting the ability of companies to quickly change processes to increase sustainability while maintaining product safety.
Challenge 2: Pharmaceuticals are highly regulated and are typically supplied through complex global supply chains involving a large number of stakeholders. Therefore, effective change will require a high degree of collaboration and coordination.
Challenge 3: Due to the resource intensity of pharmaceutical manufacturing and low success rates in pharmaceutical research and development (R&D) the waste-to-product ratio on the supply side of the medicines market is high. Supply side waste is compounded by wasteful practices on the demand side (e.g. over-prescription and low adherence).
Challenge 4: The pharmaceutical industry is highly innovative and companies must continue to innovate to deliver medicines. However, future technologies are likely to have a different environmental impact profile compared to established small molecule technologies, generating a moving target for sustainability.
Challenge 5: Health systems do not reward sustainability. This compounds the other challenges and means the financial incentive for the pharmaceutical industry to make the large, coordinated investments required to reach net zero is missing.
Challenges in decarbonising the pharmaceutical industry and recommendations for action
Source: Stakeholder interviews and expert roundtable conducted by OHE
It is important to stress that these challenges to decarbonization are not insurmountable. They are not an excuse for inaction and given the urgency of the thread of climate change, action is needed now. There are numerous actions that industry, with support from the UK government and NHS, to reduce the carbon footprint of medicines development and manufacturing. Below we list one recommendation for the industry, the UK government and the NHS, but more detail on these and the other recommendations can be found in the full OHE consulting report.
Recommendation for the UK government: take the lead on global alignment of regulatory and reporting standards
One of the most important steps the UK government can take is to lead international alignment on regulatory standards. That includes alignment on reporting standards for carbon emissions and broader sustainability performance – a vital component of meaningful actions from industry. Greater global alignment on regulatory and reporting standards will make it easier for pharmaceutical companies, who are embedded in complex and global value chains, to invest in the sustainability of their own operations and to encourage their suppliers to do the same. Given that the NHS was the first health system in the world to set an explicit net zero target, the UK government has the credibility to take a leadership role in this space.
Any form of global alignment should include the development of standards on how to label products as “lower carbon” using robust life cycle assessment (LCA). Accreditation and governance of the reporting process is needed to avoid gaming and accusations of greenwashing, both of which detract from meaningful and sustainable progress towards net zero.
Recommendation for the NHS: implement your industry roadmap effectively
The NHS will require action from its suppliers, including medicines suppliers, if it is to achieve its 2045 net zero ambition. The NHS supplier roadmap provides detail on the actions that the NHS will require of its suppliers from now to 2045. For example, from April 2024, all suppliers will be required to publish a carbon reduction plan for their UK scope 1 and 2 emissions as a minimum and from April 2027 suppliers will be required to publish a carbon reduction plan for global emissions including, importantly, scope 3 emissions.
The NHS will require significant action from medicines suppliers if it is to reach net zero by 2045
Source: Greener NHS » Suppliers (england.nhs.uk)
The NHS needs to ensure that the roadmap is implemented effectively. This requires the individual steps to be clear and actionable and this in turn requires sufficient detail and regular engagement with suppliers. The roadmap also needs national alignment as trust-level standards would create too much fragmentation and it should incorporate planning for changing demographics and care pathways, and disruptive new health technologies which could have implications for the feasibility of achieving each step on time.
Also, the roadmap must address not only scope 1 and 2 emissions but also scope 3 emissions, as these often account for a majority of emissions for pharmaceutical companies and other suppliers. Currently, it is only from April 2027 onwards that suppliers will be required to address their scope 3 emissions. Finally, the roadmap will require strong governance to avoid gaming by suppliers through cheap compensation and offsets for example. This will be vital for incentivizing sustainable decarbonisation by suppliers.
Recommendation for industry: invest in improvements in energy efficiency
Companies can, within current regulatory structures, improve the energy efficiency of their sites, especially their energy-intensive manufacturing facilities. For example, technology exists which can improve the energy performance of cleanrooms in pharmaceutical company sites. Cleanrooms are highly controlled environments in which air filters are used to minimize contamination. A fixed and high number of air changes is carried out per hour even if the air is sufficiently pure as a ‘just in case’ strategy. This means that the amount of energy consumed to process the air is unnecessarily high.
The energy performance of cleanrooms can be improved with adaptive airflow control systems in which the air change rate responds in real time to the level of contamination within a space. By aligning airflow with actual contamination levels, these solutions have the potential to significantly reduce energy consumption while maintaining standards of cleanliness. These types of investment are relative quick-wins, with experts interviewed by OHE suggesting that returns on investment can be realized within 3-5 years.
Decarbonisation of pharmaceuticals will not be achieved without collaboration
Uncoordinated action by individual governments, health systems and companies will be inefficient and ineffective. The UK government, NHS and industry need to work closely together and with a global perspective to achieve meaningful reductions in carbon emissions. At a time of increasing division across countries it is imperative that hurdles to collaboration are overcome and in the meantime everything possible is done to generate emissions savings within the pharmaceutical industry and the NHS.
Posted in Health Care Systems, OHE Consulting, Use of Medicines | Tagged NHS, Sustainability