GENZYME´S CSR DILEMMA: HOW TO PLAY ITS HANDS
Twenty years ago and earlier, with rare exceptions, the only corporate charity was a bit of gifting by the CEO, perhaps to the arts. Ten years ago, corporate philanthropy and volunteerism became popular as an a la carte add on. In these posts from the Clinton Global Initiative (CGI), I am turning the spotlight on the avant garde of CSR: companies that make community and global problem-solving part of their business platform, thus making "doing good" sustainable.
Genzyme, one of the world's leading biotechnology companies, is a good example. Through its Humanitarian Assistance for Neglected Diseases (HAND) initiative, Genzyme supports efforts to discover and advance novel treatments for neglected diseases such as malaria, Chagas disease, and sleeping sickness. According to Genzyme, "The company does not seek to profit from the commercialization of any products it helps to develop under this program." Why would a for-profit company do this? The question was posed by an interviewer of Fast Company in 2009 to James A. Geraghty, Sr. Vice President, Corporate Development, Product Acquisition, and Partnering Transactions, Genzyme. "If we don't do it, who will?" he replied. That response mimics what I heard from speakers at CGI--Genzyme saw a global problem, and used their company's expertise to solve it. "What's the case to shareholders, and how does your board of directors support this?" was the next question asked to Geraghty. He explained that historically, pharmaceutical companies have not had great relationships with governments in developing and emerging countries. Yet those are, of course, important markets for companies like Genzyme. "Governments are the decision makers. We want to develop their respect as partners, so that we can bring forward our commercial portfolio in the future." Genzyme's portfolio includes drugs for rare inherited disorders, renal disease, cancer, orthopedics, and diagnostic testing. The Broad Institute, Medicines for Malaria Venture, and the Harvard School of Public Health are among Genzyme's multiple partners in this initiative. Genzyme's "changemaking" commitment (as they refer to it at CGI) has the essential elements of successful and sustainable business CSR strategies: alignment with company goals and objectives, research and metrics to demonstrate need and progress, partnerships and alliances, employee engagement, and leadership from the CEO. 2. CONTEXT: Biotech in developed countries
• After completing his analysis of the three major HAND initiatives, what should Jim Geraghty recommend to Henri Termeer, and how can he support his recommendation?
After careful consideration we come to the conclusion that it would be wise, under certain constraints, to pursue all three initiatives in a coordinated way to show Genzyme´s full commitment to Corporate Social Responsibility.
Pursuing all three options has of course the risk of being not focused enough and not resolving the managing problems of all partnerships. Let´s discuss a bit more in detail each project.
1) The Chagas Project
As we can derive from the appendices we see that Cerezyme is earning a lot of profits. In 2008, $100 million dollar of revenues was coming from Brazilian government. Genzyme had convinced the government that the HAND program supported the treatment of Gaucher. In 2011 Brazil was in the process of revising its protected list of 100 ´exceptional drugs´. By having only one single major client, risks were huge in losing a large part of revenue in South America. The ´Chagas project´ is seen as the true giveback to Brazil to underscore the CSR profile Genzyme has built over the years.
- Protecting revenues of their number 1 selling medicine by strengthening their commitment to treat poor patients. - By having already a phase II vaccine on hand in a well-developed country the treatment could be very effective in treating...
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