The Greening of Pharma

Experts give some Big Pharma companies high marks for their environmental initiatives. Benchmarking efforts and new tools promise to make it easier for all drug companies, regardless of size, to improve performance and reduce costs.

By Heidi Parsons, Managing Editor

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The famous complaint that “it’s not easy being green” just won’t cut it in the real world anymore. Drug manufacturers that have made concerted efforts to boost their energy efficiency or convert their manufacturing processes to greener chemistries have not only realized intangible image improvement, but very tangible bottom line benefits.

This holds for both Allergan, Inc. (Irvine, Calif.) and Merck (Whitehouse Station, N.J.), both of which were singled out this year for their energy efficiency programs by the Energy Star program, administered by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) (sidebar).

Pharmaceutical Manufacturers
Participating in Energy Star
Abbott*
Allergan**
AstraZeneca Int’l.
Aventis
Bayer *
Bristol-Myers Squibb*
Glaxo Smith Kline *
Johnson & Johnson*
Eli Lilly & Co.*
Merck & Co., Inc.**
Novartis
Pfizer Inc.*
Roche*
Schering-Plough*
Tyco Healthcare*
Wyeth*
3M**

* denotes Energy Star Partners
** denotes Energy Star Partner of the Year awardees

Critical to any drug company’s success is strongly articulated, top-down management support for environmental initiatives. Merck, Genentech and Procter and Gamble were among 20 major corporations that collaborated with Energy Star personnel and scenario consultants from Global Business Network to develop the position paper “Energy Strategy for the Road Ahead” last year. In this document, authors from industry and EPA proposed various hypothetical situations that might change the global energy scene through 2020 and how they would affect businesses.

The group concluded that the following [1] would be key to survival:

  • Executive commitment to continually improve energy efficiency across the entire corporation, including clear processes and tracking systems to identify opportunities
  • An empowered corporate energy director and energy team supported by sufficient human and financial resources
  • A corporate energy policy that is accounted for at the top levels of the corporation
  • Aggressive, numeric energy goals that stretch performance targets to draw out creative innovations for meeting them
  • Measurement and tracking of energy performance for all energy use, corporationwide, including benchmarking facility performance nationally and globally with similar companies, and a review system with accountability at all levels
  • Communication of the value of energy savings, importance of improving use of energy and executive commitment by consistently recognizing accomplishments.

In developing the “Energy Strategy for the Future” document, the participants were “reading the tea leaves,” says EPA’s Walt Tunnessen, Energy Star national program manager. “Indications are the world will look different in the not-too-distant future… The high gasoline prices we see now are just a bellwether. Corporate executives need to think about what they can do now to mitigate future risks.”

These considerations are especially critical for pharmaceutical companies, Tunnessen points out, because many of them are located in areas of the U.S. where energy costs are higher to begin with, such as New Jersey, Southern California, and the Chicago area.

“Historically, the pharmaceutical industry hasn’t seen energy as a controllable cost, but that’s turning around,” Tunnessen observes. Although the industry is far from being the most energy-intensive, spending about 3% of its annual manufacturing costs on energy, that figure still adds up. “It’s not insignificant by any means,” he says.

Reducing energy consumption requires having a program in place, staying on message and motivating people throughout the enterprise. Merck’s CEO showed his support for energy efficiency two years ago, when he videotaped a “call to action” to all employees, setting a tone from the top level of the organization.

A Well-Stocked Toolbox

Any drug manufacturing professional can easily find resources on improving energy efficiency (for more information, visit PharmaManufacturing.com’s new online Green Resources Library).

Among the tools that Energy Star provides are:

  • A Website that facilitates sharing of energyefficiency best practices among companies;
  • A reference manual, “Energy Efficiency Improvement and Cost Saving Opportunities for the Pharmaceutical Industry,” sponsored by EPA and developed by researchers at Lawrence Berkeley National Laboratory (LBNL) in September 2005 (also in our online Green Resources Library).

Joining them shortly will be the Pharmaceutical Manufacturing Energy Performance Indicator (EPI), a benchmarking tool, now in the final stages of review and approval. Created by economist Gale Boyd, Ph.D. at Duke University, EPI will be based on data submitted by several larger pharma companies on about 35 of their facilities. Its goal is to enable corporate-and industry-wide benchmarking and to rate the energy efficiency of a single U.S. pharmaceutical manufacturing facility. The Indicator will use basic inputs to provide a percentile ranking of an individual plant’s energy efficiency by comparing it to the industry’s average and “efficient” (defined as the 75th percentile) plants.

On behalf of and for use by the Energy Star Program, Boyd has developed indices like this for automotive assembly and cement manufacturing, as well as other sectors. “Energy management is about measuring. You don’t manage what you don’t measure,” he points out.

This is the third year that the Energy Star Program has been working with pharmaceutical manufacturers to gather and analyze data. Energy Star’s Tunnessen says group members are performing a final “reality check” on the EPI in their facilities, and he expects to be able to release the tool this summer.

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