What are the material issues the company has identified?            

In its 2019 Corporate Citizenship Report Cardinal Health identified a range of material issues, such as ethics and compliance, data privacy and security, environmental emissions and impact, supply chain management. Among these, promoting patient safety stands out as a key material issue for Cardinal Health.

Stakeholder engagement in accordance with the GRI Standards              

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Cardinal Health engages with:

Stakeholder Group

Employees

Customers

Investors

Suppliers

Regulators

Standard-setters

Peer companies

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics Cardinal Health asked internal stakeholders to respond to a survey to assess their level of concern about each topic.

What actions were taken by Cardinal Health to promote patient safety?

In its 2019 Corporate Citizenship Report Cardinal Health reports that it took the following actions for promoting patient safety:

• Implementing a quality management system
• Cardinal Health’s quality management system is built on the requirements and guiding principles of patient and user safety, regulatory compliance and continuous improvement. Cardinal Health implements quality procedures that take into account the regulatory requirements for the markets worldwide where it manufactures or distributes products. Cardinal Health tracks quality performance in its businesses and within its sites with metrics that are regularly reviewed at sites, in management review meetings and as part of its goal-setting process, also maintaining quality certification to global industry standards. More than 100 of Cardinal Health’s manufacturing, distribution and other operating facilities are certified to ISO 13485:2016 (Medical Devices — Quality Management Systems) standards.

• Providing product quality training
• Cardinal Health employees responsible for product quality are trained in current good manufacturing practices. Non-manufacturing teams receive product training, including regulatory and quality standards, as appropriate.

• Measuring and monitoring effectiveness
• Cardinal Health conducts internal audits to verify that its global quality system conforms to internal and external requirements and is effectively implemented and maintained. Worldwide health authorities also review Cardinal Health’s performance to ensure quality and compliance. During FY19, Cardinal Health had more than 300 external regulatory inspections across all its businesses.

• Applying corrective and preventive action (CAPA) systems
• Cardinal Health maintains corrective and preventive action (CAPA) systems that assist it in investigating actual or potential product quality or safety issues to find root causes and prevent occurrences or recurrences. Cardinal Health initiates corrective actions (such as product advisories, field actions or recalls) as necessary to help ensure quality and safety issues are quickly and effectively addressed.

• Meeting product materials restrictions
• Cardinal Health’s global strategies and programmes help to make sure that it meets product materials restrictions, including the EU RoHS2 Directive, EU REACH Regulation and others. As part of its product quality reviews, Cardinal Health consults several lists, including California Proposition 65, EU Medical Devices Regulation, EU REACH Substances of Very High Concern, EU RoHS and Montreal Protocol on Substances that Deplete the Ozone Layer.

• Implementing supplier quality programmes
• Cardinal Health has supplier quality programmes for the materials and components used in the products that it self-manufactures and the selection, qualification and oversight of suppliers that manufacture products on its behalf. These programmes focus on patient safety and regulatory compliance. Controls such as quality system audits and CAPAs are designed to provide assurance that the facilities manufacturing the materials or components that Cardinal Health procures have quality systems in place, so that final product complies with its specifications and adheres to regulatory requirements. Cardinal Health conducts routine quality audits of suppliers as required by law.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standard addressed in this case is: Disclosure 416-1 Assessment of the health and safety impacts of product and service categories

Disclosure 416-1 Assessment of the health and safety impacts of product and service categories does not correspond to any SDG.

 

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References:

1) This case study is based on published information by Cardinal Health, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:

http://database.globalreporting.org/

2) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Cardinal Health: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.

What are the material issues the company has identified?

In its 2014 Corporate Responsibility Report Merck & Co. identified a range of material issues, such as pricing and commercialization, intellectual property, privacy of patient data, continuity of supply, capacity building. Among these, promoting patient and product safety stands out as a key material issue for Merck & Co., recognizing that when people take its medicines and vaccines, they must feel that they are safe to use.

Stakeholder engagement in accordance with the GRI Standards

The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:

“The organization should identify its stakeholders, and explain how it has responded to their reasonable expectations.”

Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.

Key stakeholder groups Merck & Co. engages with:

Stakeholder Group

Patients and caregivers

Healthcare professionals

Payers

Governments, multilateral organizations and regulators

Shareholders

International and local organizations

Local communities

Environmental stakeholders

Employees

Suppliers and business partners

Trade and industry associations

How stakeholder engagement was made to identify material issues

From a list of hundreds of potentially material issues, Merck & Co. identified 42 to test with internal and external stakeholders. Internally Merck & Co. engaged with senior executives from key functional areas and business units including Ethics & Compliance, Global Clinical Development, Scientific Affairs, Global Health Innovation, Global Medical Affairs, Global Public Policy, Human Resources, Manufacturing, Market Access, Philanthropy, Safety and Environment, Vaccines and others. Merck & Co.’s goal was to understand which of the 42 material issues were most linked to the company’s business strategy and to its business success. Merck & Co. asked its business leaders to select the issues of highest importance in terms of their impact on:

• Financial value and revenue
• Operational excellence
• Compliance with regulations
• Corporate reputation
• Shareholders
• Employees and their level of engagement

Externally, Merck & Co. engaged more than 30 stakeholder groups that represented a cross section of advocacy interests, including on-the-ground implementation partners, socially responsible investors, environmental NGOs, public health advocates and health providers. Through in-person interviews, Merck & Co. asked its stakeholders to indicate which issues were important to their groups or communities; where action from the private sector, and from the company in particular, is critical; and how Merck & Co. can drive excellence through its corporate responsibility efforts.

Stakeholders were asked to rank the list of 42 material issues and impacts; assess the company’s performance on these priority issues; and share their expectations related to strategy, reporting and stakeholder engagement. This process was less of an accounting exercise and more of a strategic one, designed to both understand Merck & Co.’s impacts and articulate its priorities. Merck & Co. asked stakeholders to evaluate its 42 priority issues based on criteria heavily influenced by the International Integrated Reporting Council (IIRC), including impacts on and contributions to the six “capitals”: Financial, Manufactured, Intellectual, Social and Relationship, Human and Natural. Merck & Co. augmented these criteria with considerations such as critical risk factors, unique opportunities for the private sector and for the company, and contributions to the global sustainability agenda set by the United Nations.

What actions were taken by Merck & Co. to promote patient and product safety?

In its 2014 Corporate Responsibility Report Merck & Co. set the following targets for promoting patient and product safety, based on the company’s approach to materiality – on taking action on what matters, where it matters:

• Promoting monitoring and compliance

The Global Clinical and Pharmacovigilance Compliance (GC&PVC) function at Merck & Co. is part of the company’s Research Laboratories (MRL) Compliance organization, which in turn is part of the Global Compliance Organization (GCO). This group is responsible for conducting independent, periodic audits of the processes, computerized systems, technology and collaborative partners supporting the Human Health and Animal Health divisions within the company. Merck & Co.’s research laboratories have a comprehensive, risk-based audit and compliance oversight program that encompasses a broad range of GC&PVC audits and assessments of the following:

Clinical investigator sites: Audits to assess compliance with the protocol and with GC&PVC regulations and guidelines

Collaborative partners: Pre-contractual assessments and selected post-contractual audits of contracted research organizations (CROs), central laboratories and other third-party business partners and vendors

Computerized systems and technology: Audits and assessments of the computerized systems and technology supporting clinical development

Internal process/systems audits: Systematic evaluations of compliance of clinical and animal health development processes with standard operating procedures, Global Development Procedures (ICH-GCP) and other applicable regulations and guidance

Country operations audits: Periodic and systematic assessments of the company’s clinical trial and animal health operations and activities carried out by its subsidiaries worldwide

Business partner audits: Audits of external companies with which a licensing or development agreement exists in which compliance with contractual and regulatory requirements is assessed

Verification audits: Audits to verify that the corrective actions that have been implemented are effective at remediating the noncompliance

Through the oversight and implementation of this comprehensive audit program, GC&PVC provides independent assurance to the company’s senior management that the operations, processes and computerized systems and technology supporting Merck & Co.’s Human Health and Animal Health development activities comply with applicable global regulations and guidelines as well as internal company policies and procedures.

• Promoting risk management for all products

Clinical Safety and Risk Management (CSRM) leads the Risk Management & Safety teams for all products, from the beginning of Phase IIb through the end of the product life cycle. CSRM is responsible for the formation of a proactive clinical safety risk-management strategy, including the Risk Management Plan, which is a regulatory requirement in many countries for marketed drugs and vaccines. Development of the overall risk-management strategy incorporates all available internal information (e.g., basic research data and animal and human studies with the product and/or related products) and external information (e.g., literature and public data related to the class of drugs and/or therapeutic target) that contribute to the overall risk-benefit assessment of the product. The strategy focuses on activities needed to identify, evaluate and manage potential patient-safety risks. The Risk Management & Safety teams assess patient safety using product labeling, physician and patient educational programs, and other risk-minimization strategies, as appropriate. The Risk Management & Safety teams also implement strategies to determine the effectiveness of these interventions, as appropriate.

• Rigorously studying products and working with regulators and healthcare professionals to characterize their safety profile

Merck & Co. rigorously studies its products and works with regulators and healthcare professionals over many years to characterize their safety profiles. Initially, test compounds are evaluated in the laboratory. If they pass stringent laboratory tests, the compounds move into next-stage testing in animals. Only a few compounds ever make it that far. If the compound makes it through the animal-testing stage, Merck & Co. then begins clinical development, during which multiple studies are conducted over several years. Clinical testing begins in Phase I in a small number of people and progresses through Phase III, in which the safety and efficacy of a medicine is rigorously evaluated. If the clinical studies are successful, Merck & Co. submits extensive documentation and data to regulators in a product-licensing application. Before approving a medicine or vaccine for use, regulators scrutinize these extensive data and analyses. Even after a product is approved, Merck & Co. continues to actively monitor the safety of its medicines and vaccines in various ways, including post-marketing studies. If Merck & Co. identifies safety issues following a product’s approval, it works closely with the regulatory authorities to communicate promptly and appropriately with healthcare professionals and patients.

• Communicating about product risks

Merck & Co.’s information leaflets in its product packaging contain information on possible side effects and, if appropriate, how to avoid some potential problems. Merck & Co. includes contact details on its corporate website for patients, caregivers and health professionals to report adverse experiences in the U.S. Outside the U.S., adverse events are reported according to local laws and practices. Depending on label changes and their context, Merck & Co. may determine, in consultation with regulatory agencies, that more extensive communications may be appropriate. In such cases, Merck & Co. works with regulatory authorities to contact healthcare professionals in a timely manner, so that they can communicate these findings to patients through appropriate mechanisms. Contacting healthcare professionals might include “Dear Doctor” letters and media releases.

• Identifying, evaluating and reporting adverse experiences occurring in association with the use of products

Although regulations vary by country, most countries require drug manufacturers to promptly review adverse experience (AE) information they receive from any source, both domestic and foreign, relating to the use of their products. Manufacturers are also required to have written procedures in place for evaluating and reporting adverse experiences. In accordance with global regulatory reporting requirements, Merck & Co. has developed a written procedure to provide personnel worldwide – including all contractors – with a consistent and thorough process for identifying, evaluating and reporting AEs occurring in association with the use of its products. These procedures cover the reporting of AEs originating in clinical studies and those associated with the use of marketed products. Adherence to these procedures ensures timely and accurate monitoring of the safety profile of Merck & Co.’s investigational and marketed products globally. To report an adverse experience to regulatory authorities, Merck & Co. needs at least minimal information: the name of the product involved, the adverse experience, an identifiable patient and an identifiable reporter. In addition to submission of individual AE reports to regulatory authorities, either within 15 calendar days or periodically, Merck & Co. also files aggregate reports either quarterly, twice a year or annually for as long as it markets a product. Merck & Co.’s Risk Management & Safety teams review adverse experience information received from all sources (foreign, domestic, clinical trials, published literature, post-marketing) for its products and determine what actions may need to be taken with reference to the evolving safety profile of Merck & Co.’s products. These teams include physicians and epidemiologists who are trained to review this type of data. It can be difficult to determine the exact cause of an adverse experience because many patients have more than one condition and may be taking multiple products. Merck & Co.’s Global Safety staff takes great care to make sure that AE reporting is as accurate as possible. Merck & Co. reviews the data to determine if there are any patterns or emerging trends that need additional surveillance. Another major safety focus is the ongoing oversight and monitoring of Merck & Co.’s product labels. Merck & Co.’s Label Review teams monitor information on its products and work with the company’s Product Safety teams to develop or update product labeling. Information is then communicated to regulatory agencies worldwide. Employees responsible for monitoring and reporting adverse experiences undergo rigorous training every other year. New employees within Merck & Co.’s research laboratories – including all contract personnel – working in areas related to clinical research and global safety undergo training on Merck & Co.’s AE policies and procedures when they join the company. All other employees are trained in AE reporting procedures as part of Merck & Co.’s Code of Conduct training.

Which GRI indicators/Standards have been addressed?

The GRI indicators/Standards addressed in this case are:

1) G4-PR1: Percentage of significant product and service categories for which health and safety impacts are assessed for improvement – the updated GRI Standard is: Disclosure 416-1 Assessment of the health and safety impacts of product and service categories

2) G4-PR3: Type of product and service information required by the organization’s procedures for product and service information and labeling, and percentage of significant products and service categories subject to such information requirements – the updated GRI Standard is: Disclosure 417-1 Requirements for product and service information and labeling

 

References:

 

1) This case study is based on published information by Merck & Co., located at the links below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the following links:

http://database.globalreporting.org/

http://www.msdresponsibility.com/ (September 2015)

2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page

3) https://g4.globalreporting.org/Pages/default.aspx

4) https://www.globalreporting.org/standards/gri-standards-download-center/

Note to Merck & Co.: With each case study we send out an email to your listed address in request for a comment on this case study. If you have not received such an email please contact us.