Editor’s note: This is the first in a series of blog case studies that look at the sustainability challenges and successes at different pharmaceutical and biotechnology companies. For each case study, we’re interviewing a company practitioner to get an insider’s perspective.  We will be publishing these perspectives on a monthly basis and look forward to your comments. If you have a case study that you would like to share, please contact Shivani Kannabhiran at web@bsr.org.

The Challenge

Diabetes has been misunderstood in China at times as the country grapples with the medical and social impact of an epidemic which has accompanied its rising standard of living. Paradoxically, while the risk factors for diabetes (modern lifestyle, diet rich in fat and meat) are considered worthy of high respect in China, diabetics have been considered less worthy because of their chronic illness. In fact, until a few decades ago, people with diabetes were often neglected and blamed for their disease.

“The perception in China was that you couldn’t save people with diabetes,” says Ole Kjerkegaard Nielsen, Programme Director Business Integration, Novo Nordisk. “Care was poor, and the necessary training in balancing food intake, diet, blood glucose response, and daily life activities was absent. There were also reported incidences of discrimination, where people with diabetes were often passed over for jobs and university placements.”

In the mid 1990s, Novo Nordisk took a major step to change how China approaches diabetes from both a treatment and awareness perspective.

Approach

Novo Nordisk’s strategy was to enter the diabetes market in China not just with products but with a long-term, comprehensive approach to patient care and physician and people education that focused on prevention. 

Novo Nordisk recognized that they could only achieve this level of change and strengthen China’s health care system by working together with a wide variety of stakeholders, including the Chinese government, physicians, and people. They built diabetes clinics, invested in community diabetes prevention programs, and launched several public-private initiatives in partnership with the Chinese Ministry of Health to develop diabetes guidelines, training, and health systems integration.

To build local knowledge and capacity, Novo Nordisk also opened a biopharmaceutical research and development center in China in 2002 and transferred the production of a core diabetes product to Tianjin in 2006, with the remainder of the product line transferred in 2009. By 2015, Tianjin will be able to supply the entire Chinese market. 

Lessons Learned

Chinese government officials were sceptical initially of Novo Nordisk’s strategy of prevention and education. However, Novo Nordisk was able to leverage its nearly five decades of working in the country—and its continued investment in China even during turbulent periods—to demonstrate their long-term commitment to China and the Chinese people. 

Another significant challenge was changing Chinese perceptions about diabetes and diabetics. One way they addressed this was by sponsoring a popular game show in which 40,000 contestants were tested on their knowledge of diabetes. This helped raise awareness that diabetics were people who could lead normal lives with proper care and attention.

Novo Nordisk has also faced challenges from stakeholders outside of China. While they were making strides in diabetic patient care, and saving transportation carbon emissions with their new in-country production facilities, they were now manufacturing in a carbon-intensive country. To mitigate their impact, Novo Nordisk designed their Tianjin facility to produce 20 percent fewer emissions than their best-in-class factory in Brazil.

What’s Next

Today, China is the third biggest market in Novo Nordisk’s business and the second largest insulin market. In 2010, Novo Nordisk had 63 percent of the market in China and sales of DKK 4,500 million. Novo Nordisk’s success in the Chinese’s diabetic market is documented in their Blueprint for Change Program, a communication vehicle they use to articulate the value of a triple-bottom-line approach to business. The next step for Nielsen and his team is to establish similar cases to demonstrate the business and social value for new programs in United States and Bangladesh.  

“Our job is to convince top management and internal sceptics that sustainability can make a difference and can grow the business,” says Nielsen. “For our team, it is critical to be transparent. We want our stakeholders, especially our critics, to have a complete picture—the positives and the negatives—and be truly convinced by what we do. For us it is important to show that what we do creates value for the company and for society. That sums up how we do business.”