The Impact of MedicinesCorporate and Social Responsibility Report 2002Do more, feel better, live longer
Corporate responsibility is an integralpart of our business – it is inherent in themission of our company. GlaxoSmithKline
makes a significant positive contribution tosociety around the world, through the
medicines and healthcare products that weresearch, develop, manufacture and sell.
Impact of Medicines cover storyAlthough a generation separates them, Bettina Bartels and her son Philippeare able to lead active lives despite both suffering from asthma. Their storycan be found in our Annual Review. On page 5 of this report, Dr VincentMcGovern gives his perspective on asthma management as both a patientand a doctor.
Contents01 A global challenge02 The scope of our business04 Our contribution to society06 Medicines for the developing world12 Community investment16 Research and development
20 Valuing people24 Environment, health and safety28 Business ethics and integrity32 Management of CSR33 Web references
Annual Report Annual Review Corporate and SocialResponsibility Report
A global challengeThe responsible behaviour of all types of organisations, including multinationalcompanies, governments and charities, is high onthe public agenda and stimulates considerabledebate. Last year, in our first review of corporateand social responsibility, which covered GSK’sfirst year as a new company, we set out ourcommitment to connecting business decisions to ethical, social and environmental concerns1.
In this report, which covers activity during 2002, we cover the issues that have generated significantinterest from stakeholders. We have made goodprogress this year, including developing indicatorsthat will enable us to show our progress inaddressing these issues. We will continue to buildon these steps to increase the transparency of ouroperations. In this way we expect to give ourstakeholders the same confidence in the value of our business that we feel ourselves.
Corporate responsibility is an integral part of our business – it is inherent in the mission of the company. GSK makes a significant positivecontribution to society around the world, throughthe medicines, vaccines and healthcare productsthat we research, develop, manufacture and sell.
01
Our products must improve people’s lives to ensurea profitable and sustainable future for our business.We also understand that it is not just how muchprofit we make that matters. Stakeholders, includingemployees, want to know how we make this profit,and to be reassured of the sound ethical basis forour business.
We could not run our business effectively withouttalking with, and listening to, the many groups ourbusiness impacts. Discussion with stakeholders is apart of our everyday work. This is very much a two-way relationship because the views and expectationsof stakeholders directly affect us.
We consult widely, both formally and in less formalways. The diversity of our stakeholders, for examplepatients, customers, healthcare professionals,governments, non-governmental organisations andshareholders, inevitably gives rise to very different andsometimes conflicting demands for us to consider.We will continue our constructive engagement toguide us in running a successful business thatcontributes to meeting the needs of society.
Sir Christopher HoggChairman
JP GarnierChief Executive Officer
During 2002, we... • invested a total of £239 million in global community
activities, product donations and charitablecontributions – more than any other UK company;
• donated 66 million albendazole tablets, worth £8.7 million, to 31 countries to support the preventionof lymphatic filariasis;
• increased shipments of our Combivir HIV/AIDStreatment at preferential prices to the developingworld to nearly 6 million tablets, up from 2.2 millionin 2001;
• worked with other companies to establish newindustry Principles on the Conduct of Clinical Trialsand Communication of Clinical Trial Results; and
• surveyed 10,000 of our managers on their views of GSK’s Spirit and culture.
GlaxoSmithKline researches,develops, manufactures and
markets medicines and consumer health products around the world.
02
R&D – DISEASES OF THEDEVELOPING WORLDContinuing our commitment to find preventions andtreatments, particularly forHIV/AIDS, malaria and TB(page 7)
MEDICINES FOR THEDEVELOPING WORLDFacilitating access tomedicines and improvinghealth and education through partnerships(page 8)
COMMUNITYINVESTMENTImproving the quality oflife of under-served peoplein the developed anddeveloping world(page 13)
ETHICAL ISSUES IN R&DConsidering the questionsthat arise from the researchand development of newmedicines and vaccines(page 17)
Key impact areas
The scope of our business...over 100,000 employeesoperating in 150 countries,with more than 20 researchand development centres in8 countries and productionfacilities in 38 countries.
commercialise and support effective marketing ofprescription medicines, vaccines and delivery systemsfor the treatment and prevention of human disease.We employ over 15,000 staff in R&D and have morethan 20 R&D sites worldwide.
Our portfolio of products ranges from tablets andtoothpaste to inhalers and capsules. We make over36,000 different pack sizes and presentations. We have a network of 95 manufacturing sites in 38 countries and employ more than 33,000 inmanufacturing and related support functions. Each year we produce over four billion packs, which are delivered for sale in over 150 countries.
The pharmaceutical industry is highly regulated, withevery stage from discovery to sales and marketingclosely controlled. Our stakeholders are many andtheir expectations can be very different.
Thus, size and complexity make this a challengingbusiness. This raises many questions about what we do, and how and why we do it. Our main impacts onsociety, and how we manage these, are described inthis report.
20 24 28
SALES
GlaxoSmithKlineThe scope of our business
03
DEVELOPING OUREMPLOYEESAttracting, rewarding andmotivating people in a safeand healthy workplace(page 21)
SUPPORTINGHUMAN RIGHTSRespecting the rights and interests of all thoseaffected by and involved in our business(page 22)
CARING FORTHE ENVIRONMENTUsing resources efficientlyand minimising negativeenvironmental impacts(page 25)
BUSINESSETHICSEnsuring our employeesunderstand and implement our Code of Conduct andpolicies for ensuring ethicalbusiness practices(page 29)
GlaxoSmithKline operates in the pharmaceutical andconsumer healthcare sectors, making prescriptionmedicines, vaccines, over-the-counter medicines, oral care and nutritional healthcare products.
Our business is founded primarily on research anddevelopment to discover, develop, register,
Information on financial performance is available inthe Annual Report and Accounts.
USA PHARMACEUTICALS 46%EUROPE PHARMACEUTICALS 22%INTERNATIONAL PHARMACEUTICALS 17%CONSUMER HEALTHCARE 15%
SALES £21,212mTRADING PROFIT £6,694m(Business Performance)R&D SPEND £2,900m
FINANCIAL PROFILE 2002
The main activity of our company is todevelop medicines, including vaccines,
that make a valuable contribution tosociety. These medicines save lives,
relieve suffering, and treat and oftenprevent disease. They improve the quality
of life of patients and their carers. Theyalso enable people to carry on with their lives and often reduce the cost
of managing an illness.
Our contribution to society
In developed countries, because of the availability of effective antibiotics and vaccines, we no longerexpect our children to be at risk from infectiousdiseases. The challenge is to extend these advancesto developing countries.
The number of diseases where research hasproduced major advances continues to grow.However, there is still much to do. The challenge for our company is to continue to meet society’sexpectations by developing innovative medicinesthat enable people to live longer and healthier lives.
ACCESS TO MEDICINESWe also want to play a part in improving thehealthcare of people who currently have limitedaccess to our medicines. Our programmes indeveloping countries are set out on page 7.
In the US, we are helping to improve access to medicines for low-income senior citizens and the disabled who lack prescription drug coveragethrough public or private insurance programmes. In late 2001, GSK launched the Orange CardSM,which offers savings on the company’s prescriptionmedicines. This was the first programme of its kind in the US, with participants required simply to present the card to their pharmacists to receivethe savings. In addition, last year GSK’s PatientAssistance Program provided medicines worth over £112 million to more than 400,000 lowincome patients in the US who do not have medical insurance.
Following the positive response to the Orange Card3
from patients, doctors, and companies, GSK and sixother pharmaceutical companies launched a jointscheme in 2002. The Together Rx™ Card 4 provideseligible senior citizens and the disabled in the USwith a single, easy-to-use card to receive savings on the prescription medicines of the sevencompanies involved.
These programmes are having a real impact on thelives of disadvantaged people across the US.
04
The positive effect our medicines have on people’s lives is one of the factors thatmotivates our employees. The nature of whatwe do gives them the opportunity to make adifference to the health of millions of peoplearound the world.
CHANGING EXPECTATIONSWith advances in medicine, society has changed its expectations of healthcare. Diseases that oncehad a devastating impact are now controlledthrough improved healthcare management and with better medicines and vaccines. This has ledmany people in the developed world to take goodhealth for granted.
For example, a generation ago polio was one of theworld’s most feared infectious diseases. Thanks tothe worldwide vaccination initiative co-ordinated bythe World Health Organization2 and to the majorcontribution of our vaccines business, the globalelimination of polio is in sight.
‘‘GSK is opening up the door forsignificant savings to an estimated 10
million Americans. That will make atremendous difference in the lives
of so many people.’’ Tommy Thompson US Secretary of Health and Human
Services on launch of the Orange Card
Case study
DR VINCENT MCGOVERN, A GENERALPRACTITIONER IN BELFAST, UK, GIVES HISPERSPECTIVE ON ASTHMA MANAGEMENT AS BOTH A PATIENT AND A DOCTOR.
A Patient’s Perspective – “The management of asthma has changed dramatically over the last 30 years. I was the child who wanted to play football,but had to play in goal, who had rounded shouldersand a blue inhaler in every pocket. I remembersleepless nights with emergency visits from thedoctor. When inhaled steroids became available theytook away the sleepless nights. The development of new treatments has made a huge impact on my life. I still have asthma, but it’s well controlled bypreventative treatments. I certainly don’t notice I have it, and nobody else does either.”
Asthma-related deaths and hospital admissions havedeclined, but the incidence of asthma is growing.Asthma remains a major health issue worldwide. We focus on what matters to patients, concentratingon their quality of life.
05
1970s Ventolin (bronchodilator)Relieves breathlessness for3-6 hours per dose
1970s Becotide/Beclovent(corticosteroid) Reduces theinflammation in the lungs that leads to asthma symptoms
1990s Serevent (bronchodilator)Relieves breathlessness for up to 12 hours per dose
1990s Flixotide/Flovent(corticosteroid) More effectivelyreduces the inflammation in thelungs that leads to asthmasymptoms
Today Seretide/Advair(bronchodilator/corticosteroid)The first asthma product thatrelieves breathlessness for up to12 hours per dose and reducesthe inflammation that leads toasthma symptoms, in one easyto use device
f
f
f
f
f
DEVELOPMENT OF OUR ASTHMA TREATMENTS
A Doctor’s Perspective – “As a GP who is also anasthmatic, I find asthma a really satisfying conditionto treat. It is common, with 5.1 million sufferers inthe UK. In my practice, 80 per cent of theasthmatics will have mild-to-moderate disease. I aimto achieve total control of their symptoms usingcurrent treatments, giving them a good quality oflife. And the standard of patient care is gettinghigher, either through specialised units or one-to-one consultations with nurses or doctors. Asthma isan area where national treatment guidelines havebeen adopted and have had a major impact ondisease management.”
Over the last 30 years our R&D organisation hasproduced improved medicines to treat asthma andbetter ways for them to be taken. These advanceshave been vital in enabling healthcare professionalsto provide ever-improving patient care. However,asthma still causes suffering and even death, so wewill continue our research with the aim of furtherimproving the lives of the growing number of people affected by this disease.
In developing countries, millions of people lack accessto the most basic healthcare services. Life-threateningdiseases such as tuberculosis, malaria and HIV/AIDSare contributing to a healthcare crisis.
06
Medicines for thedeveloping world
The global community must provide political will,a significant mobilisation of additional resources,and a spirit of partnership if we are to see animprovement in healthcare and quality of lifeacross the developing world.
GlaxoSmithKline is making a vital contributionto healthcare in developing countries throughaction in three areas: investing in research and development (R&D) that targets diseasesparticularly affecting the developing world;preferential pricing of our antiretrovirals, anti-malarials and vaccines; and communityinvestment activities and partnerships thatfoster effective healthcare5. We madesignificant advances in each of these key areas during 2002.
R&D FOR DISEASES OF THE DEVELOPING WORLDResearch into diseases of the developing world(DDW) is particularly important to address unmetneeds, and to minimise the intrinsic threat in allinfectious diseases of resistance developing toexisting treatments.
A dedicated DDW group has been created withinGSK’s R&D organisation to ensure a focus on thisarea. Projects are prioritised primarily on their socio-economic and public health benefits ratherthan their commercial returns. Our DDW research is now focused in dedicated facilities at Tres Cantosin Spain (see page 11).
We believe GSK has the industry’s most extensiveportfolio of DDW R&D projects and marketedproducts, and that we are the only companyundertaking R&D into the prevention and treatmentof all three of the World Health Organization’spriority diseases in the developing world – HIV/AIDS,tuberculosis and malaria. GSK focuses on these three diseases. We are also an industry leader incollaborating with external partners that want to use our specialist infrastructure or expertise.
R&D into diseases that primarily affect the developingworld, such as malaria, differs in important respectsfrom efforts aimed at diseases for which a developedworld market also exists, such as HIV/AIDS. The lackof a commercially viable market for DDW treatmentsmeans that public/private partnerships are essential.Major companies such as GSK can providetechnological, development, manufacturing anddistribution expertise, while public sector partners can help fund development costs and ensure thatnew medicines and vaccines get to the people whoneed them. The partnership approach encouragesR&D and accelerates the product’s uptake in thedeveloping world.
07
HIV Ziagen/Epivir combination
RetrovirEpivir
CombivirZiagenTrizivir
Ageneraseprotease inhibitor*
S. pneumoniaepaediatric
Havrix (hepatitis A)Engerix B (hepatitis B)Twinrix (hep A & B)
Infanrix (diptheria, tetanus, acellular pertussis)
Tritanrix (diptheria, tetanus,wholecell pertussis)Polio Sabin (polio)
Priorix (measles, mumpsand rubella)
Typherix (typhoid)Hiberix (haemophilus
influenzae type b)
Vaccines
tafenoquine MalaroneHalfan
Lapdap*
Malaria
sitamaquineoxibendazole
TB
PHASE III MARKETEDPHASE I
NNRTIprotease inhibitor
integrase inhibitor
HIVDengue fever
Hepatitis ERotavirus
Meningitis BMalaria
N. meningitidis
CDA
PHASE IIPRE-CLINICAL
ACTIVITY
Ziagen/Epivircombination
S. pneumoniaepaediatric
tafenoquine
PHASE III
✔
✔
✔
sitamaquineoxibendazole
ZentelOther sitamaquineoxibendazole
✔
* being registered and not yet marketed.
DDW DEVELOPMENT PIPELINE at end of 2002
We will maintain broadly the current level of humanand financial resources dedicated to DDW as aproportion of our total R&D investment. We willwork assiduously, with partners when appropriate, to ensure that any promising DDW drug is madeavailable to patients as rapidly as possible. The R&Dprocess is lengthy and risky. However, our long-term commitment is now bearing fruit and we arehopeful that we will be able to launch several newproducts relevant to DDW over the next five years.
We have seen some notable progress in 2002. In HIV/AIDS the first human clinical trials of our HIV candidate vaccine commenced in February, incollaboration with the US Government’s NationalInstitutes of Health HIV Vaccine Trials Network6. In conjunction with other partners, GSK continues tosupport 29 HIV clinical trials in developing countries,including 20 in Africa. The purpose of these trials is toassess the use of antiretroviral therapy for treatment,and prevention of mother-to-child HIV transmission inresource-poor settings. Over 10,000 patients form orwill form part of our HIV collaborative studies. Threethousand of these patients will be included in theDART Trial (Developing Antiretroviral Therapy) inUganda and Zimbabwe, co-ordinated by the UKMedical Research Council.
There has been progress in malaria too. In October2002, we submitted a regulatory application to theUK Medicines Control Agency (MCA) for Lapdap(chlorproguanil/dapsone) for the treatment of themost life threatening type of the malaria. MCAapproval will be an important step in making Lapdapavailable across Africa, where there is great need fornew malaria treatments.
Lapdap results from a successful partnershipbetween GSK, the World Health Organization, the University of Liverpool, the London School of Hygiene & Tropical Medicine, and the UKDepartment for International Development (DFID)7.This is the first such product development to bedirectly sponsored by DFID.
PREFERENTIAL PRICINGGSK recognises that it has a responsibility to makeits products as affordable as possible in the poorestcountries. We have offered our vaccines to publichealth programmes at significant discounts for over20 years. We set a single, sustainable, not-for-profitpreferential price for each of our antiretrovirals(ARVs) and anti-malarials to a wide range ofcustomers in the Least Developed Countries andsub-Saharan Africa – a total of 63 countries. Thesecustomers include the public sector, not-for-profitNGOs, aid agencies, UN agencies, and internationalpurchase funds such as the Global Fund to fightAIDS, TB and Malaria. We also extend our offer of not-for-profit prices on ARVs to employers in sub-Saharan Africa who provide care and treatmentthrough workplace clinics and similar arrangements.
GSK is committed to contributing to healthimprovements in a sustainable manner, so we set our preferential prices for ARVs and anti-malarials at levels that cover direct costs but on which we donot make a profit. In this way we can offer theseprices for as long as patients need treatment8.
Our long-term commitment is nowbearing fruit and we are hopeful thatwe will be able to launch several newproducts relevant to DDW over thenext five years.
08
NUMBER OF SUPPLY ARRANGEMENTS FOR ARVsAND TYPE OF CUSTOMER
140
120
100
80
60
40
20
0Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2000 2001 2002 2003
Employers
Public Hospitals
Key
NGOs
Govt Non AAI
AAI (Accelerating Access
Initiative)
Special ‘Access’ packs
Sup
ply
arr
ang
emen
ts
09
We have pledged to pass on cost efficiencies asshipments to the developing world increase. Forinstance, in September 2002, we further reducedthe not-for-profit preferential prices of our HIV/AIDSmedicines by up to 33 per cent and our anti-malarialmedicines by up to 38 per cent9.
By the end of 2002, we had secured 124arrangements to supply preferentially-priced ARVs to 50 countries. This includes 49 arrangements madeduring 2002. These arrangements are with a widerange of stakeholders, including governments,NGOs, public hospitals and employers such asHeineken and Anglo American, with whom wecommenced partnerships in 2002.
As a result, we increased shipments of Combivirto the developing world from 2.2 million tablets in 2001 to nearly 6 million tablets in 2002 – theequivalent of about 3 million daily doses. Thesefigures exclude the product destined for patients in Africa which was diverted back to Europe. Thevictims of this trade are HIV/AIDS patients in Africaand the only beneficiaries are the illegal importers.GSK has introduced special ‘Access’ packs to makethis illegal trade more difficult. We look to regulatoryauthorities and our customers to also take measuresto prevent diversion.
GSK’s ability to provide preferential prices to thedeveloping world requires a sustainable framework.Our commitment to preferential pricing must becombined with commitments from others to preventproduct diversion and to avoid referencing developedcountry prices against preferentially-priced medicines.Clearly diversion threatens this framework.
Additionally, in 2002, we started small-scaleshipments of a wider range of preferentially-pricedproducts to the five pilot projects we have inpartnership with NGOs in Tanzania, Uganda, Nigeria,Zambia and Malawi. These projects are designed toassess the impact of preferential pricing for abroader range of products.
COMMUNITY INVESTMENT PROGRAMMESWe have a wide range of partnerships in thedeveloping world. Our focus is on health andeducation programmes for under-served communitiesaround the world10. In 2002, GSK invested over £12 million in its public health programmes.
Our partners range from the World HealthOrganization and the World Bank to local schoolsand community-based organisations. Where possible,we ensure that our programmes are sustainable andcan be repeated in communities with similar needs.
Our programmes comprise major initiatives in publichealth, support for education, product donations, and support for employee involvement activities. Our public health programmes, for example, include:
The Global Alliance to Eliminate LymphaticFilariasis – GSK is a key partner in the global effortto eliminate lymphatic filariasis (LF), also known aselephantiasis. This is a disabling and disfiguringdisease that currently affects 120 million people, and threatens a further one billion, in some of the poorest nations of the world11.
CUMULATIVE SHIPMENTS OF COMBIVIR TABLETS (EXCLUDING DIVERTED PRODUCT)
9
8
7
6
5
4
3
2
1
0Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2001 2002
Tab
lets
Sh
ipp
ed (m
illio
ns)
GSK is a founding member of the partnership thatincludes the World Health Organization, the Ministriesof Health of the LF-endemic countries, and 40organisations in the public, private and academicsectors. GSK donates its antiparasitic drug albendazole,one of three drugs used to stop transmission of thedisease. Over the anticipated 20-year life of theprogramme, this commitment will build to anestimated six billion tablets as more countries join. In addition, we provide significant financial resourcesand staff expertise to support coalition-building,advocacy, research, community mobilisation, andeducational initiatives.
In 2002, the fourth year of the programme, 66 milliontablets (worth £8.7 million) were donated to 31countries, bringing the total number of albendazoletablets donated to date to 145 million. Grants totalling£750,000 were also made. A huge mobilisation ofeffort is required for the fight against LF. This isexemplified by the more than 45,000 health workersand volunteers in Sri Lanka who worked together todeliver preventative medicines to 9 million people in a single day in July 2002.
Positive Action programme – In 2002, GSK’sinternational programme of HIV education, care and community support, backed 25 internationalprogrammes in 32 countries12. Activities funded byPositive Action support the two-year ‘Live and LetLive’ World AIDS Campaign launched by UNAIDS onWorld AIDS Day 2002. For example, Positive Action-funded studies by the International Center forResearch on Women, conducted in Ethiopia,Tanzania and Zambia, have confirmed that societaldiscrimination based on HIV fuels the spread ofAIDS. Positive Action also announced funding fornew community initiatives in Kenya and Mexico13.During the 14th International AIDS Conference, held in Barcelona in July 2002, Positive Actioncontributed over £90,000 to support attendance and participation of community representatives from under-resourced regions.
The GSK France Foundation – supportsprogrammes that prevent the risk of verticaltransmission of HIV; provide medical care,monitoring and treatment; and improve access andquality of care for people living with HIV. In 2002,the Foundation supported 13 programmes involving42,000 people as part of a four year £1.3 millioncommitment in eight African countries14.
African Malaria Partnership (AMP) – in Novemberthree organisations were selected to share grantstotalling £1.0 million over three years under theAMP. Through this programme, GSK is fundingbehavioural development initiatives to combat adisease that kills over one million people every year.In total nearly two million people will be reached bythe programmes in the seven countries involved15.
10
Our partners range from the WorldHealth Organization and the World Bankto local schools and community-basedorganisations.
1999 2000 2001 2002
Mill
ion
s
80
60
40
20
0
Years
“GlaxoSmithKline has much to be proud of in improvinghealthcare in the developing world through its drug distribution, research and development, and community activities. The world’s attention is focused on private companies and governments aswe work together.”Constance A. Carrino Director, Office of HIV/AIDS, USAID
Estimated patients treated (m) Tablets donated (m)
Key
LF ELIMINATION PROGRAMME
145 million albendazole tablets donated to date
Case study
GSK’s Tres Cantos site houses major elements of our R&D high-throughput screening activitiesand GSK’s commercial operations in Spain.However, we have now also concentrated ourDDW drug research in TB and malaria – effortswith a long history in GSK – into dedicatedfacilities on the site, with a full-time researchstaff committed solely to DDW.
As well as the centre’s TB and malaria focus, ideas and drug candidates for treating other neglected diseases of the developing world are pursuedopportunistically, and the development of existingGSK drug candidates for such diseases will continue.
The Tres Cantos DDW scientific staff provide thewide range of skills – including chemistry, biologyand toxicology – needed to better understand thedisease targets and identify novel drug candidatesfor further development. Such a concentration ofresources and skills maximises our ability to discovernew medicines for DDW.
The Tres Cantos group is fully integrated with therest of GSK’s R&D in order to ensure that we canbring all the relevant skills, technologies andresources to bear to achieve success in developingsuch discoveries. In this regard, GSK’s advantages of scale and our networks with key externalpartners are important.
In particular, access to GSK’s world-wide clinicaldevelopment organisation is vital for the effectiveconduct of clinical trials. However, the DDW groupat Tres Cantos, and its associated DDW drugdevelopment team in London, can also call on GSK’s expertise and staff in many other areas, such as screening, pre-clinical development and regulatory affairs.
11
GSK’s research into Diseases of theDeveloping World (DDW) is centred ondedicated R&D facilities in Tres Cantos,Spain. This is in addition to our HIV/AIDSand vaccines R&D programmes.
The total value of our community investmentactivities in 2002 was £239 million.
12
Project HOPE airlift ofGSK antibiotics toTajikistan. Our productdonations for humanitarianrelief reached 73 countriesin 2002.
We work with partner organisations around the world to ensure that the right blend ofexpertise is applied to each of our programmes,and we select partners who have the bestexperience and skills for each initiative.Programmes are selected on the basis ofcommunity need, not for their potential impacton GSK’s commercial business or to increasesales of our products. We fund programmes thatare measurable, sustainable and replicable andwe work closely with our partners to ensuretheir success16.
WORLDWIDE COMMUNITY CONTRIBUTIONGSK’s community investment and charitablecontributions in 2002 totalled £239 million, of which£112 million was related to the company’s PatientAssistance Program for financially disadvantagedpatients in the US. Our corporate regional publichealth and humanitarian relief programmes aim toserve communities with the greatest needs. To meetlocal needs GSK operating companies also supportnumerous local community programmes.
GSK product donations for humanitarian relief aremade through charitable partner organisations thathave experience in delivering humanitarian relief.These charities decide where and when our productdonations are most needed, and work withgovernments of recipient countries to ensure thatthey arrive safely and are distributed appropriately.For example, a donation of almost half a milliontreatments of our antibiotic Augmentin was part of an airlift of vital medicines into Tajikistan inOctober 2002 organised by Project HOPE17. Already struggling to overcome the effects of civil war, Tajikistan has been further challenged
Community investment
The focus for GlaxoSmithKline’s communityinvestments is on improving health and education.
Our programmes extend to both the developed and developing world, and most of our efforts aretargeted at improving the quality of life of people
in under-served communities.
by a decade of steady immigration of refugees fromAfghanistan. As a member of the Partnership forQuality Medical Donations, GSK has fully endorsedand agreed to follow the WHO Guidelines for Drug Donations18.
Our public health programmes are directed to areas where specific diseases are prevalent. Thismeans that our HIV/AIDS community programme,Positive Action, has global reach; our effort toeliminate the parasitic disease, lymphatic filariasis, is focused on endemic countries in the developingworld; and our African Malaria Partnership isdirected to the continent that bears the greatestburden of the disease (see page 10).
In the developed world too, our communityprogrammes support communities in need. Our SHARE programme in the US and Canada targets health in elderly, racial and ethnic minoritycommunities. We are providing monetary awards for innovation and sharing best practice on reducinghealth inequality among these vulnerable groups19.
13
We fund programmes thatare measurable, sustainableand replicable and we workclosely with our partners toensure their success .
14
In 2002, the International Business Leaders ForumAward for International Corporate Citizenship was
made to GSK for our PHASE programme whichprovides hygiene education for school children.
“As a charity, Plan UK has been very impressed by GSK’s approach to partnership. They have been willing to consult with localcommunities, to develop materials which are easy to use, relevantto local culture and save children’s lives.”Marie Staunton Executive Director of Plan International
“The PHASE programme is making a real difference to the health and well-being of local communities and is an excellent exampleof the positive role that business can have in society.”Robert Davies Chief Executive of the International Business Leaders Forum
In the UK, as part of a broad commitment to scienceeducation, we have committed up to £1 million overfour years to fund INSPIRE (INnovative Scheme forPost-docs In Research and Education), a programmeto boost science education in schools20. Thissupports selected schools applying to becomeScience Colleges under the UK government’sSpecialist Schools Programme.
GSK provides support in many different ways, for example, through donating money, products, and other in-kind donations such as office furniture,computers and surplus laboratory equipment.
Our product donations are valued at wholesaleacquisition cost which relates to the price GSKcharges wholesalers and warehousing chains, not the retail price.
The company follows the London BenchmarkingGroup21 model of recording our communityinvestments. This recognised model provides a standard basis for companies to manage and report their commitments to the community.
METHOD OF GIVING(including US PatientAssistance Program)
Cash
42%
Public Health Programmes (including LF) 10%
Product Donations 12%
Corporate and Regional Programmes 11%
Local Programmes 67%
TYPE OF PROGRAMME(excluding US Patient Assistance Program)
In Kind
1%
Product
57%
Case study
In 1998 GSK launched an initiative called PHASE– Personal Hygiene And Sanitation Education –to provide hygiene education for schoolchildren, with the aim of reducing diarrhoea-related disease and deaths associated with poor hygiene.
PHASE started in partnership with AMREF (AfricanMedical and Research Foundation) and operates in Kenya, Nicaragua and Peru, where GSK hascommitted £1.2 million for its roll-out. In LatinAmerica, GSK works with the child-focuseddevelopment charity Plan International. In Kenya,83,000 children in 247 schools are benefiting fromthis basic education, while in Nicaragua it will reach over 27,000 primary school children and20,000 in Peru.
PHASE empowers children and their families to take responsibility for their own health andsanitation. Communities around the participatingschools have also benefited, with most homes now
having containers for handwashing, pit latrines and refuse pits.
Evaluation of the Kenyan programme has shownthat, as a result of PHASE, children have a betterunderstanding of the causes of diarrhoea and worm infestations, and know about ways to prevent infection. Teachers have seen improvementsin school attendance and report that children are now much cleaner and take better care of theirpersonal hygiene. Data from one class show thatthe percentage of children who knew that washinghands after going to the toilet could prevent wormsincreased from 20 per cent before PHASE to 45 per cent afterwards.
The success of the programme has been such thatthe Kenyan government has incorporated PHASEinto the national curriculum, increasing thelikelihood of these benefits being available to other parts of Kenya.
A wide range of seriously debilitating and life-threatening diseases thrive in the poor livingconditions found in many countries of thedeveloping world. In Africa alone, over 3.5 millionchildren die each year from diarrhoeal disease.
15
We understand the need to balance the benefitsthat patients gain from new medicines with anyrisks or ethical considerations relating to new technologies.
16
If we are unable to take advantage ofadvances, patients will not have the besttreatments. We understand concerns abouttechnological advances in the R&D process, and welcome informed debate.
The R&D process is highly regulated, wherever we operate. As scientific advances raise new issues, we work closely with the regulators, policy makersand stakeholders to develop any new or refinedstandards. We have our own internal standards andsystems to ensure that we comply with or exceed all guidelines, regulations and legal requirements.
THE ESSENTIAL ROLE OF ANIMAL RESEARCHBasic research using animals is vital to furthering our understanding of human disease. Animalstudies also provide an essential bridge betweencharacterising potential new medicines and vaccinesin the laboratory and learning about their effects in people. By law, we must assess drug safety in animals before starting clinical trials. We arecommitted to the three Rs – to reduce, refine andreplace animal studies – and set stringent standardsinternally and for our external contractors. Weensure that all GSK staff conducting animal studiesare thoroughly trained.
We reduce the number of animals used in researchwherever we can without compromising the safetyof volunteers and patients in clinical trials, and weseek as much information as possible from eachanimal study. The number of animals used in ourlaboratories has therefore remained essentiallyconstant over the last eight years in spite of asignificant increase in our R&D activity (see chart,page 18). We use animals more humanely by using,for example, non-invasive imaging (see page 19).
Research anddevelopment
17
We encourage staff to devise alternative approachesto animal research through internal Animal WelfareAwards. GSK sponsors the largest European award in this field – the GSK Laboratory Animal WelfarePrize22. Inspections by national regulatoryauthorities acknowledge the high standards of careand compliance in our facilities. To ensure that wemeet best practice, our US and UK animal facilitiesare accredited by the Association for Assessment & Accreditation of Laboratory Animal Care23, and we are working to extend this to our other facilities.
We believe that the best way to address publicinterest in animal research is to foster greaterknowledge and understanding of the facts. We also believe that this is the most effective wayto help combat the climate of fear and intimidationbeing promoted by animal extremist groups. Wetherefore provide information to support rationalpublic debate, actively participate in such discussionsourselves and host tours of our animal facilitieswhere possible. We also welcome governmentactions to protect our staff, laboratory animals and research collaborators from extremist actions.We visit schools to discuss relevant ethical issues, for example, involving over 2000 UK pupils in such discussions in the 2001-2 school year.
Information on GSK’s use of animals in research is available on our website 24.
GlaxoSmithKline aims to produce safe and effectivemedicines and vaccines that benefit patients byaddressing their unmet medical needs. To do this,we need to use the most recent advances in scienceand technology to understand diseases and toidentify and test drugs.
THE “THREE RS”IN ANIMAL RESEARCH
Reduce the number of animalsused in medicines R&D to theminimum possible to obtainmeaningful, validated results.
Refine animal experimentalprocedures to avoid or minimisepain or discomfort, and tomaximise the informationobtained from each study and each animal.
Replace the need for animalstudies by developing andvalidating alternative approacheswherever feasible.
REDUCE
REFINE
REPLACE
We are obliged by law to assess drug safety inanimals before startingclinical trials.
TESTING NEW MEDICINES IN CLINICAL TRIALSGSK’s aim, to develop medicines and vaccines thatbenefit patients, is reflected in the priority we give to protecting the interests of healthy volunteers and patients who take part in our clinical trials. The regulatory authorities rigorously scrutinise theinitiation and conduct of clinical trials and relatedactivities. The need to respect the rights, dignity,safety and well-being of clinical trial participants isenshrined in declarations and guidelines produced by the World Medical Association, World HealthOrganization, Council of the InternationalOrganisations of Medical Sciences, Council of Europe, the International Conference onHarmonisation (ICH) and government bodies. GSK fully complies with the relevant regulations andnational requirements, and with guidelines such asICH Good Clinical Practice. When regulations andguidelines are periodically reviewed and revised to ensure that they fully address the interests ofpatients, GSK actively contributes to the discussionson the basis of our extensive global experience.
In our last review, we summarised our rigorousprocedures to ensure patient safety and the privacyof their medical information. We have recentlystrengthened procedures to avoid information beingsent to GSK by external investigators that wouldenable us to identify trial participants. However, we know that the conduct of clinical trials raisesethical issues and we therefore worked with othercompanies in 2002 to establish the new PhRMAPrinciples on the Conduct of Clinical Trials andCommunication of Clinical Trial Results 25.
The Principles reflect the importance of independentInstitutional Review Boards or Ethical ReviewCommittees in protecting patients and volunteersinvolved in clinical trials. GSK fully supports theseguidelines, which reiterate the need to obtaingenuinely informed consent before any clinicalprocedure is undertaken, an obligation that GSKextends to include acquiring and using humanbiological samples such as tissues and DNA. ThePrinciples also summarise the safeguards the industry, including GSK, adopts to ensure that thereimbursement of patients’ and external clinicalinvestigators’ expenses is not an inappropriateinducement to participate in clinical trials, or to biasthe results that are reported. Regulatory authorities’requirements for financial disclosure further protectthe public interest in this area.
The Principles articulate the industry’s, and GSK’s,practice of seeking to publish the meaningful resultsof controlled clinical trials, regardless of the outcome,in a timely manner. This includes giving clinical trialiststhe appropriate level of access to the raw data andtheir interpretation.
18
Rapid technological advances have provided us with the tools to make major progress in
the fight against disease.
1994 1995 1996 1997 1998 1999 2000 2001
% c
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994
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200
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CHANGE IN R&D ACTIVITY COMPARED WITH CHANGE INNUMBER OF ANIMALS USED BY GSK
Animals used R&D activityFigures normalised to 1994 levels Key
Case study
REFINING RESEARCH USING ANIMALSWhen studying a disease or the effect of a drugover a period of time, animals would previouslyhave had to be humanely killed and the organsremoved for microscopic examination at eachtime-point. MRI enables the same animal to berepeatedly assessed at each time-point so thenumber of animals used is reduced.
Moreover, we can get more detailed informationabout the progress of a disease by more frequentscanning than would be possible if every time-pointneeded a separate group of animals and resource-intensive technologies such as microscopicexamination. Importantly, each animal can often be used as its own control so the statistical power of these studies is enhanced even when using farfewer animals.
19
Serial MRI allows respiratory biologists to study lunginflammation in rats that mimics some aspects ofhuman asthma. The same animals are scanned,minimising discomfort, for several weeks. This allowschronic inflammatory and other responses to bestudied, and the beneficial effects of standard andnew drugs to be measured. The MRI approachtypically requires 24 animals for a study that wouldrequire more than 500 if undertaken usingconventional microscopy approaches.
Similar approaches are being taken in our otherresearch areas, such as neurology, psychiatry andcardiovascular diseases, as well as in preclinicalsafety assessment. The cumulative beneficial impacton the number of animals used and on data quality istherefore very significant.
Non-invasive imaging techniques such asmagnetic resonance imaging (MRI) can providenew and more relevant scientific information inways not previously possible.
GSK employs over 100,000 people andoperates in more than 150 countries.
20
We are committed to providing the opportunityfor our employees to do meaningful andchallenging work in pursuit of our goal toimprove the quality of human life by enablingpeople to do more, feel better and live longer.
Last year we reported on the principles that underpinour approach to people management, and a range ofprogrammes which were designed to deliver our globalhuman resources strategy. We are now pleased toreport the progress we have made and set out, wherewe are able, how we intend in future to measure ourperformance on issues such as diversity.
THE GSK CULTUREAt GSK, great emphasis is placed not only on whatwe must achieve as a company, but also on how we deliver our achievements. Our culture is summedup in the GSK Spirit which defines the qualities we expect all our employees to embrace:
• performance with integrity• entrepreneurial spirit• focus on innovation• a sense of urgency• passion for achievement
Developing the GSK culture is critical to enablingpeople to reach their potential and do their bestwork. We therefore carried out a survey in 2002 of10,000 managers to assess how well the Spirit andculture is being adopted. We sought views on theexperience of working for GSK, including both whatmanagers considered was being done well and whatareas needed further work.
The survey results were generally very positive,showing that managers take great pride in being part of GSK. For example, there was overwhelmingsupport for the statements that “people in mydepartment show commitment to performance withintegrity”, “my department is a focused organisationwith a sense of urgency” and “I would gladly refer a good friend or family member to GSK foremployment”. These findings show that managersbelieve that the GSK Spirit is reflected in the way they and others are working day to day.
The results also raised important areas for furtherdevelopment. These included concerns about whetherpeople are able to perform to their full potential, theextent to which managers are able to act as coachesto support development, and the degree of staffinvolvement in decisions that affect their work. Theseissues are all being addressed by GSK’s CorporateExecutive Team. For example, a programme has beenput in place to reduce complexity and bureaucracy inthe company and to streamline processes to help freeup managers to do their best work.
Valuing people
People are the greatest single source of competitive advantage for any company.
At GlaxoSmithKline, we believe that attracting,retaining and motivating the very best people
is the foundation for our future success.
21
The survey results weregenerally very positive,showing that managers take great pride in being part of GSK.
HUMAN RIGHTS GSK believes that on human rights issues, we can lead by example and thereby influence thebehaviours and practices of others through cleardemonstration of our own values. Our most effectivecontribution can be made through pursuing policiesin our own operations that respect the rights andinterests of all those affected by and involved in our business. GSK supports and is committed toupholding the United Nations Universal Declarationof Human Rights26 and the core labour standardsset out by the International Labour Organization27.
During 2002, we carried out an internal reviewwhich demonstrated that, wherever we operate as an employer, we believe we are complying with the Universal Declaration of Human Rights and the core conventions of the International LabourOrganization, and according to the Guidelines for Multinational Enterprises set by the OECD28.Conducted through the Head of Human Resourcesfor each country, the review was also used to build awareness and understanding of human rights issues.
Also during the year, we began to put in placebinding requirements to ensure that our majorcontractors and suppliers adopt GSK’s standards on human rights and core labour standards.
DIVERSITYDiversity is a business imperative for GSK; we are committed to the principles of equality ofopportunity and equal treatment. We aim to have a workforce and working environment that reflectsthe diversity of background, culture, beliefs and characteristics of the communities in which we operate.
We are therefore embedding the values of diversityand equal treatment into our key business processes.For employees, this means that diversity measures areincluded in manager and employee training, externalrecruitment and internal appointment processes,performance assessments and pay reviews,succession planning and developmental assignments.
For customers and stakeholders, it includes the development of measures to reach targetedcustomers, outreach programmes for specific patient groups and advertising that reflects the many communities we serve.
We believe that our diversity strategy will show clearprogress against the baseline figures we report thisyear (see below). We will report changes annually.
With the exception of the US (see ethnicity chart),we do not have meaningful data on the ethnicity ofour employees because of the different ways ethnicgroups are described in different countries and, in some cases, because of legal restrictions oncollecting these data.
We are fundamentally committed to the principles of equality of opportunity
and equal treatment.
22
Bands A & B* 583 (81%) 134 (19%)Bands C 1-3** 2708 (70%) 1159 (30%)Bands C 4 & 5*** 4409 (65%) 2343 (35%)
Total 7700 (68%) 3636 (32%)
GLOBAL SENIOR MANAGEMENT POPULATION BY GENDER 2002
Men Women
* Corporate Executive Team and Vice-Presidents/Senior Vice Presidents** Director Level*** Manager Level
ETHNICITY OF US EMPLOYEE POPULATION, 2002
Total US employees 24,000
19%
People ofcolour
Case study
Our promotion of diversity within GSK hashad a powerful effect on the way we thinkabout the needs of our customers.
23
Ensuring that our medicines benefit the widestpossible number of patients is at the heart of our mission to enable people to do more, feel better and live longer. In 2001, one of GSK’s General Pharma sales and marketing units in the US made it a key business objective toimprove access to GSK medicines to patientsfrom ethnic minority communities.
The unit operates in a part of southern Californiawith a particularly high population of Vietnamese,Koreans, Armenians, Central Americans andMexicans.
The sales teams had specific training on culturalawareness to improve their understanding of theircustomers and their particular needs. As a result,doctors are better able to use GSK products, with benefits for individual patients and for these communities.
Building on this success, cultural awareness trainingwas extended to all sales groups across the USduring 2002. This approach is also being used in GSK’s US Pharma marketing departments to increase multicultural awareness andunderstanding relating to each of our brands.
In addition, through our multi-language patienteducation programme, we are supporting UShealthcare professionals in raising awareness ofdiseases and disease management among groupswith limited command of English. Disease educationmaterials on asthma, migraine, rhinitis anddepression are being provided by GSK salesrepresentatives in a number of languages includingSpanish, Chinese, Vietnamese, Korean and Russian.
GSK has a comprehensive programme to characterisethe physical and chemical properties, environmentalfate and effects, and occupational health effects ofour products and chemical processes.
24
Although many of the contractors on our sites donot work under our direct supervision, their safety isas important as that of our employees. We apply thesame standards to them, and monitor their healthand safety. For external contractors working for GSK,the lost time injury and illness rate was similar to therate for our own employees.
We improve our EHS performance by having strongEHS management systems and programmes in place.Four examples are given below.
EHS information for our products and processesGSK has a comprehensive programme tocharacterise the physical and chemical properties,environmental fate and effects, and occupationalhealth effects of our products and chemicalprocesses. This information helps us to:
design and operate our production and controlsystems to protect our employees and thecommunities in which we operate.inform our employees and the public about the hazards of materials to help them understandhow to handle them safely.
We have a comprehensive framework ofenvironmental, health and safety programmesthat provide the structure for our approach.This is based on EHS Standards that apply,without exception, to all of our sites around the world.
Environmental sustainability is the basis of ourenvironmental programmes. After addressing thepotential for adverse impacts from our wastes, our approach to achieving sustainability is to focuson improving the efficiency of our manufacturingprocesses to minimise the materials used and waste generated, and then to optimise the use of renewable raw materials.
Our occupational health and safety programmesfocus on protecting and enhancing the health andsafety of our employees, reflecting the value weplace on people.
IMPROVEMENT TARGETSOur EHS performance targets are set againstbaseline performance in 2001, the first full year of GSK’s operations, and are to be achieved by the end of 2005. For environmental emissions,company-wide targets have been set byconsolidating individual site targets.
Our health and safety target is to reduce lost timeinjuries and illnesses by 15 per cent each year to2005, from a baseline rate in 2001 of 0.43 lost time injuries and illnesses for each 100,000 hoursworked. Preliminary data for 2002 indicate that wewill meet this target for the year. Final verified resultswill be on our website, www.gsk.com.
As a responsible global citizen,GlaxoSmithKline strives to preserve the environment and protect the health of people who work for us.
Environment,health and safety
25
One of GSK’s dry powder devices
f
f
1998 1999 2000 2001 2005
% o
f 20
01 b
asel
ine
200
150
100
50
0
Year
EXAMPLES OF ENVIRONMENTAL PERFORMANCE IMPROVEMENTS
Contract manufacturersGSK uses contract manufacturers in a number of countries to supply certain products for localmarkets and, in a few cases, for specialist processesor technologies. They are an integral part of theproduct supply chain so we work with them toprevent adverse events and ensure the reliability of product supply. To ensure that these companiesare managing EHS risks and impacts responsibly,conformance with GSK requirements and legislationis assessed through a programme of EHS auditsconducted by our EHS Global Audit Team.
The audits cover general management of EHS and control of key risks and impacts. Areas forimprovement are highlighted to the contractmanufacturer and progress is monitored. In 2002, 16 key contract manufacturers/suppliers were assessed.
Ozone depletion and chlorofluorocarbon (CFC)elimination – Metered dose inhalers (MDIs) are the most common way that asthmatics receive their medication. However, many MDIs use aspropellants CFCs that are ozone depleting andglobal warming gases.
Currently GSK has an extensive plan containing over 10,000 milestones to eliminate CFCs from our MDIs. Progress is excellent with 68 per cent ofthe actions completed. In 2002, for the first timesince the transition began, GSK manufactured over100 million non-CFC MDIs and launched our first non-CFC MDI in the US, CFC-free Ventolin. Coupledwith offering a wide choice of dry powder deviceswe are confident in our ability to transition awayfrom CFCs. We therefore believe that the MontrealProtocol ‘essential-use’ exemption that allows themanufacture of CFCs for salbutamol/albuterol (the active ingredient in Ventolin) MDIs, and themarketing of salbutamol/albuterol MDIs containingCFCs, is no longer necessary.
Contaminated landWe are currently studying or actively cleaning up 31 sites that are classed as contaminated land. We are also remediating a number of our formermanufacturing sites in preparation for their
26
decommissioning or sale. GSK has spent over £100 million to date and expects to spend about £30 million on further remediation at existing sites.When designing and implementing remediationprojects, we work with government agencies andlocal communities to use the best technologiesavailable to clean up the land to allow return toother use such as community parklands.
At most of these sites, land has been contaminateddue to past storage and disposal practices, includingpoor containment or accidental releases atcommercial disposal sites. The global standards andsystems we now have in place to cover all phases ofwaste management are designed to prevent futureincidents that could contaminate land.
ENVIRONMENTAL PERFORMANCE Both GSK’s heritage companies realised the benefit of setting targets to improve environmentalperformance. Improvement projects were started inthe 1980s and will continue into the future. The chartbelow illustrates the improvements already achieved inair emissions (VOC), wastewater discharges (COD) andhazardous waste disposed in the three years leadingup to the GSK baseline of 2001.
The most recent performance data against EHStargets are available on our website29.
Figures normalised by sales
VOC (Volatile Organic Compounds emitted to air)
COD (Chemical Oxygen Demand in wastewater)
HWD (Hazardous Waste Disposed)
Key
TARGET
Case study
Innovative approaches delivered anexcellent safety record during theconstruction of GSK’s new Horlicksplant in India.
27
GSK has recently completed building a newfactory at Sonepat in the north of India to meetgrowing demand in the country for Horlicks,one of GSK’s most popular nutritional drinks.
The project involved over 17,000 constructionpersonnel and a total of 13.4 million hours of work over 3.5 years. At its peak, there were 1,900workers on the site at one time. Most workers wereon site for less than 60 days, so ensuring that thechanging workforce was made aware of the safetyand health issues was a significant challenge.
Health and safety were given priority whenconstruction was planned, and appropriateprogrammes were put in place on the site. Theseincluded providing a 24-hour site health facility, so that injuries and illnesses could be treated early andworkers did not need to leave the site for treatment.Induction training for new workers emphasised safety,inspectors monitored high-risk areas on the site, andweekly talks on safety topics and special trainingprogrammes for scaffolders were held.
This was a new approach for a major greenfield site construction project in India, where historicallyprojects of this type do not involve a high level of attention to health and safety, and where formalsafety training is not common. As a result of theseinitiatives, accomplished in partnership withconstruction management and subcontractcompanies, Sonepat returned one of the best lost-time accident figures seen in projects withinGSK and its legacy companies. Benefits of thehealth and safety planning were demonstratedimmediately and improved over the course of theproject so that the last 6.6 million hours wereworked without any lost-time injuries or illnesses. A lasting benefit of this project is the futureapplication of lessons learned in creating a safety culture.
This project won the 2002 EHS Initiative Awardwhich is sponsored by the Chief Executive Officer. It was selected by a panel of judges representingacademia, government, NGOs and GSK’s Board of Directors.
High standards of honesty and integrity are vital to the success of our business.“Performance withintegrity” is the principle by which we aim to liveand work at GSK.
28
CORPORATE ETHICS AND COMPLIANCEGSK is committed to operating within the law and to the highest ethical standards. The healthcareindustry is highly regulated and the discovery,development, manufacturing and marketing ofmedicines are complex processes. Thus, we aim tobuild adherence to high standards into the everydaymanagement processes of these activities.
Formal company polices and procedures set out the expected standards of conduct, but effectivecommunication and training on these standards,followed by regular monitoring and periodic reviewof work output, are critical. While lawyers andcompliance officers are closely involved in establishingand communicating standards, GSK emphasises thepersonal responsibility of employees and their linemanagers for ensuring that all employees observethese principles in their everyday work. To supportthis we undertake ethics training through computer-based sessions and interactive discussions.
The Corporate Ethics and Compliance function atGSK is responsible for supporting the development and implementation of practices that facilitateemployees’ compliance with laws and company policy. Specialist compliance officers support our main operations of Pharmaceuticals, ConsumerHealthcare, R&D and Manufacturing.
An internal control framework integrates ethics and compliance with the day-to-day managementof the Group. This framework supports linemanagement in the identification and mitigation of significant risks, among which are potentialcompliance failures.
Business ethics and integrity
GlaxoSmithKline’s Code of Conduct lays out theprinciples that the company values and that employeesshould apply in their daily work. It is the responsibility of each employee to implement the Code to sustain the trust and confidence of all GSK’s stakeholders.
29
The framework includes a Risk Oversight andCompliance Council, as well as sector and otherbusiness unit risk management and complianceboards. The Risk Oversight and Compliance Counciland boards assist in the identification and mitigationof risks and provide guidance on risk managementinitiatives at the corporate and business unit levels.
The Risk Oversight and Compliance Council reportsto the Audit Committee of the GSK Board and theChief Executive Officer, and will also report to theCorporate Executive Team. The reporting line to the Audit Committee provides a mechanism forbypassing the executive management if irregularitiesare ever identified.
GSK RISK MANAGEMENT & COMPLIANCE FRAMEWORK
GSK BOARD
CEO
CET BUSINESS AND FUNCTION HEADS
RISK OVERSIGHT AND COMPLIANCE COUNCIL (ROCC)
BUSINESS UNIT OR FUNCTIONAL RISK MANAGEMENT AND COMPLIANCE BOARDS
BUSINESS AND FUNCTIONAL GROUPS
POTENTIAL RISKS AND RISK-GENERATING ACTIVITIES AND FUNCTIONS
Audit Committee Corporate SocialResponsibility Committee
30
GSK POLICIESThe GSK Code of Conduct and all GSK policies areavailable on our internal website. In 2002, a guideto business conduct was published on the internalwebsite to support employees’ understanding andimplementation of these standards. The guidesummarises policies and explains the company’sexpectations on business ethics and good businessconduct.
NOTIFICATION SYSTEMSConfidential Integrity Help Lines to complianceofficers are available for employees to report concernsthey feel are not being dealt with adequately throughthe normal management system.
These Help Lines are available to employees in the UK and US, reaching about half the total GSKworkforce. Other employees can take advantage ofe-mail access to a compliance officer, or can reportconcerns through a confidential post office boxmaintained by Corporate Ethics and Compliance.
The Help Lines are primarily used for consultations and by employees to ask questions. As a result, the number of callers and inquiries received bycompliance officers tends to increase in response to training or to changes in or issuance of newpolicies. Activity levels reflect greater awareness of policies and legal requirements rather than trends in unacceptable practices. Response levels indicatethat the existence of the systems and their purpose are well understood.
Confidential toll-free lines to compliance officers are available for
employees to report concerns.
Case study
Senior managers in GSK are expected to lead by example by working in line with the Code of Conduct and other GSK policies and in supporting their staff to do the same.
To ensure their understanding of thisresponsibility, in 2002 GSK introduced acertification process around the world formanagers at the vice-president level and above.
Certification requires these managers to sign a statement confirming their awareness of theirobligations to implement the company Code ofConduct and policies. This includes confirming that:
They know they are personally obliged to complywith applicable laws, regulations, and GSK’scorporate and local policies and procedures.
They accept their responsibility to put in placeappropriate measures to ensure that the peopleunder their supervision are aware of their ownobligations.
31
All people under their supervision have receivedcopies of, or have access to, the GSK Code ofConduct and other GSK policies, and understandtheir responsibilities.
In 2002, around 700 managers – all those at vice-president level and above – completed certifications.We believe this process will further support thedissemination and awareness of GSK ethicalstandards and the Code of Conduct and theirimportance to thousands of other GSK employeeswho, in the course of their daily activities, mustwork in line with the law and GSK policies.
f
f
f
GSK BOARD
CEO
CET MEMBER
CSR CO-ORDINATION & REPORTING
CSR COMMITTEE
32
Management of CSR
Our corporate and social responsibility (CSR)activities, including those covered in this report,are managed in the most appropriate functionsin the organisation rather than through a centraldepartment. We believe this is the most effectiveapproach to managing the issues because theyremain an integrated part of the everydayoperation of the business.
To facilitate policy development, implementation and communication, a cross-functional team wasestablished at the beginning of 2002 to ensure a comprehensive and co-ordinated approach. Theteam is made up of representatives from the keybusiness areas who ensure that policies are in placeand mechanisms exist for their implementation andmonitoring. The representatives also contribute toreporting progress through this report and in otherways, for example through conference presentations and on our website.
During the year this cross-functional team developedindicators that will support reporting on key issues.In determining the indicators, we aim to strike abalance between the desires of our stakeholders for greater transparency about our operations withthe realities and costs of running the business.
Contributing to improving people’s lives as aresponsible corporate citizen is an integral and
established part of our business practice.
We also believe that stakeholder discussion onanything that requires specialist knowledge is bestundertaken by those with such expertise. Hence the team representatives discuss issues directly withthose who have expressed an interest or concern,and central co-ordination means that broader issues are brought to the attention of the cross-functional team.
GSK has a process in place for identifying, evaluatingand managing significant business risks, and thisincludes reputational and corporate responsibilityissues. Our risk management process accords withthe Turnbull guidance and our formal risk assessmentis updated at least once a year. The Risk Oversightand Compliance Council (see page 29) coordinatesinternal control and risk management activities toensure effective management of significant risks.
During the year, the CSR committee of Non-Executive Board members gave advice on how we report our activities, and had specific input into our approach to community investment,environment, health and safety and human resourcespolicies including diversity and human rights issues.
Global GovernmentAffairs & Public Policy
MEDICINES FORTHE DEVELOPING
WORLD
R&D – DISEASESOF THE
DEVELOPINGWORLD
ETHICAL ISSUES IN R&D
CARING FOR THE
ENVIRONMENT
BUSINESS ETHICS
DEVELOPINGOUR
EMPLOYEES
SUPPORTINGHUMAN RIGHTS
COMMUNITY INVESTMENT
CROSS-FUNCTIONALMANAGEMENT OF CSR ACTIVITIES
1 www.gsk.com/ser/2001/ser01/CSR.pdf
2 www.polioeradication.org/
3 www.gsk.com/press_archive/press_10032001.htm
4 www.togetherrx.com/
5 www.gsk.com/about/developing_world.htm
6 www.niaid.nih.gov/factsheets/hvtn.htm
7 www.who.int/inf-pr-2001/en/pr2001-10.html
8 www.gsk.com/about/nfp_pricing_guide.htm
9 www.gsk.com/press_archive/press_09052002.htm
10 www.gsk.com/community/about.htm
11 www.gsk.com/filariasis/index.htm
12 www.gsk.com/positiveaction/index.htm
13 www.gsk.com/press_archive/press_11282002.htm
14 www.gsk.fr/gsk/fond/mp.html
15 www.gsk.com/malaria/index.htm
Web references
Our corporate website can be found at www.gsk.com. Websites cited in this report:
If you have any questions or views to share, please contact us [email protected] or write to us at:
CSRGlobal Public PolicyGlaxoSmithKline980 Great West RoadBrentfordMiddlesex TW8 9GSUK
Design consultancy by salterbaxter.
Product names throughout this publication are indicated in italics and aretrademarks of GlaxoSmithKline plc, its subsidiaries or associated companies.
Printed in the UK by St Ives Westerham Press. The paper used in theproduction of this document is made from pulps harvested from sustainableforests, also using sawmill residues and forest thinnings. It is elementalchlorine-free.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
16 www.gsk.com/community
17 www.projecthope.org/
18 www.pqmd.org
19 www.gsk.com/press_archive/press_11172001.htm
20 www.ic.ac.uk/templates/text_3.asp?P=3453
21 www.corporate-citizenship.co.uk/community/lbg.asp
22 www.rds-online.org.uk/news.html
23 www.aaalac.org
24 http://science.gsk.com/about/animal-research.htm
25 www.phrma.org/publications/quickfacts/20.06.2002.428.cfm
26 www.un.org/Overview/rights.html
27 www.ilo.org/public/english/standards/decl/declaration/text/index.htm
28 www.oecd.org/pdf/M000015000/M00015419.pdf
29 www.gsk.com/ser/2001/ser01/ehs.pdf
Dr Michèle BarzachA Non-Executive Director of GlaxoSmithKline, Dr Barzach is a member of the InternationalCooperation High Council, Chairman of the Boardof Equilibres et Populations and Director of theBoard of Project Hope. International consultant inhealth strategy, she was formerly French Minister ofHealth and Family.
Donald McHenryA Non-Executive Director of GlaxoSmithKline andchairman of the Corporate Social ResponsibilityCommittee. Mr McHenry is a DistinguishedProfessor in the Practice of Diplomacy at the Schoolof Foreign Service at Georgetown University and isPresident of the IRC Group, LLC.
Sir Christopher HoggSir Christopher is the Non-Executive Chairman of GlaxoSmithKline. He is Non-Executive Chairmanof Reuters Group PLC, a member of the SupervisoryBoard of Air Liquide S.A. and Chairman of TheRoyal National Theatre.
Dr Lucy ShapiroA Non-Executive Director of GlaxoSmithKline, Dr Shapiro is Ludwig Professor of Cancer Researchin the Department of Developmental Biology andDirector of the Beckman Centre for Molecular andGenetic Medicine at the Stanford University Schoolof Medicine.
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