With the passing of Companies Bill 2012 in the Lok Sabha on December 18, 2012, the Indian pharmaceutical companies have to invest anywhere between Rs.300-325 crore in the coming years under Corporate Social Responsibility (CSR) scheme.
Few pharmaceutical companies have already implemented CSR activities and published their contribution towards social activities. As per the Pharmabiz review, nearly 79 pharmaceutical companies will have to spend two per cent of their average net profits on social activities which comes to around Rs.325 crore.
The Bill seeks to consolidate and amend the law relating to the companies and intends to improve corporate governance as well as strengthen regulations for participation of corporates in social welfare. According to the corporate affairs ministry, India will be the first country to include provisions on CSR in its company law. CSR can be understood as a management concept and a process that integrates social and environmental concerns in business operations and a company’s interactions with the full range of its stakeholders.
As per the latest changes, every company having a net worth of Rs.500 crore or turnover of Rs.1,000 crore or an average net profit of Rs.5 crore in last three financial years would have to implement CSR practices and spend at least two per cent of average net profit in the preceding three years on CSR every financial year. If the company fails to implement CSR, the board of directors would have to state the reasons in its report.
According to Pharmabiz study (See tables below), the 30 Indian companies clocked net sales of over Rs.1,000 crore during 2011-12 and these companies achieved aggregate net sales of Rs.96,957 crore. Ranbaxy remained on top with net sales of Rs.9, 958 crore. Further, 32 companies recorded net worth (Equity capital plus reserves & surplus) of Rs.500 crore or more in 2011-12 and 79 companies notched up average net profit of over Rs.5 crore during last three years. Pharmabiz has also included major companies like Ranbaxy Laboratories, Wockhardt and Panacea Biotec despite average net loss for the preceding three years.
Several Indian pharma companies are contributing to improve lives and create a healthier world under CSR objectives. Further, major companies instituted a Whistle Blower Policy which empowers employees to raise their concerns or highlights issues if there are any discriminatory or gender-biased conducts, fraudulent business practices, unethical behaviour or violation of Code of Conduct. Indian majors like Dr Reddy's Laboratories, Biocon, Lupin, Cadila Healthcare, Jubilant Lifesciences, etc., are already engaged in CSR activities. Even multinational companies like Ranbaxy Laboratories, GlaxoSmithKline Pharma, Pfizer, etc. are making investments under CSR.
Ranbaxy has created a core group of 93 persons including 33 medical officers, 37 auxiliary nurse midwives and other paramedics and 19 support staff enable to operate 18 mobile healthcare vans and on urban family welfare centre, providing services to over to 6.50 lakh people in the northern and central parts of India. The company initiated Ranbaxy Sanjeevan Swasthya Sewa, a public private partnership between the Punjab State government during 2010. The focus is mainly on primary healthcare and prevention and early detection of commonly found cancers of cervix, breast and oral cavity. The programme covers a total population of about 4.50 lakh in around 180 villages in Punjab.
Dr Reddy's Laboratories (DRL) has set up Dr Reddy's Foundation (DRF) during 1996 as a non-profit arm. DRF players the role of a change agent in the social sector, by recognising and pursuing new opportunities to serve that mission and by engaging in a process of continuous innovation adaptation and learning. Cadila Healthcare has promoted CSR programme under Zydus Srishti. Its CSR activities are focused on the three core areas of Swasthya (Health, Safety and Environment). Shiksha (Education and Shodh (Research). Over the last 17 years these CSR initiatives have helped the company to translate its mission to create healthier happier communities into a reality.
Biocon, thorough Biocon Foundation, implementing CSR in several districts of Karnataka. The company focused its activities on critical health areas which often get neglected due to low awareness levels. It has initiated a research study in Kaladgi, Bagalkot to determine whether an integrated approach to anaemia management will help women to maintain higher levels of haemoglobin, consistently. The company is planning to start Tobacco Cessation Centres in all its clinics. Its nine Arogya Raksha Clinics continue to provide clinical services to the communities that surround it treating over 63,000 patients in 2011-12.
Lupin, through its Lupin Human Welfare and Research Foundation (LHWRF) is assisting to rural development initiatives to over 25 lakh people across 3,000 villages in the State of Rajasthan, Madhya Pradesh, Maharashtra and Uttarakhand in India. LHWRF has now set a mission for uplifting the lives of 'One Crore' people living in rural India above the poverty line.
GlaxoSmithKline Pharma has continued its commitment towards social development and initiated new projects under CSR. It implements rural development initiatives through Gramin Arogya Vikas Sanstha in Nashik and it offered support to Institute for Indian mother and child, a non-government organisation and reached more than 1.30 lakh patients in Kolkata. It also support four voluntary organisations for cancer care.
Indian companies Net sales