How can the pharma sector make sustainability more sustainable?
Sustainability in the pharmaceutical sector is becoming increasingly critical. With growing awareness of the environmental impact of pharmaceutical manufacturing—such as pollution from toxic discharges—companies must adopt more sustainable practices. The industry is heavily regulated, which often makes the implementation of sustainable initiatives challenging and expensive.
Pharmaceutical companies face the challenge of balancing their sustainability goals with the economic pressures of operating in a highly regulated environment. One of the primary challenges the industry faces is the inherent resource intensity of pharmaceutical manufacturing. The production of drugs requires significant amounts of water, energy, and raw materials, which contribute to a substantial carbon footprint. Furthermore, the management of pharmaceutical waste, especially active pharmaceutical ingredients (APIs), poses significant environmental risks if not handled responsibly. The complexity of global supply chains adds another layer of difficulty in ensuring that sustainability is maintained at every stage of production.
To truly embed sustainability into the fabric of the pharmaceutical sector, we must go beyond surface-level changes and make fundamental shifts in how we operate. To make sustainability more sustainable, companies need to look at the broader picture—embracing principles such as Life Cycle Assessment (LCA), which evaluates the environmental impact of pharmaceutical products from start to end. This holistic approach helps in identifying areas where resource consumption can be minimised and waste can be effectively managed.
- Pharma manufacturers are increasingly adopting green chemistry principles. This involves increasing efficiency in chemical processes, reducing generation of waste, recovering, re-using and recycling solvents, water, and catalysts that minimise energy and resource consumption.
- By ensuring that raw materials are sourced from suppliers who meet strict environmental and social criteria, we can extend our sustainability efforts beyond our immediate operations. Additionally, adopting a circular economy model—where waste is minimised and by-products are reused—can greatly reduce our environmental footprint.
- Digital Transformation: This is one of my favorite and I personally believe that leveraging digital tools to optimise our processes has been a game-changer. By implementing data-driven decision-making, we can monitor and reduce energy consumption, improve efficiency, and minimise our carbon footprint.
Capacity building and awareness programs are also crucial. Educating stakeholders—including suppliers, consumers, and healthcare professionals—on the importance of sustainability will create a culture of responsibility and help drive industry-wide change. Companies should invest in training and resources to ensure that everyone involved in the pharmaceutical lifecycle understands and contributes to sustainability goals.
What are the early steps that can result in quick gains to encourage more investments in sustainable manufacturing practices?
Before making any major changes, the first step should be to optimise what the company has. Operations can become sustainable if companies can enhance the lifespan and performance of machinery, reduce downtime and minimise resource use. This evaluation helps identify areas where simple optimisations can lead to significant improvements. For instance, companies can start by improving energy efficiency and result in immediate reductions in energy consumption and costs. Implementing water conservation techniques, such as low-flow fixtures or rainwater harvesting, can reduce water consumption quickly. Companies can also explore the reuse of treated wastewater for non-critical operations like cleaning or cooling systems. These steps not only reduce environmental impact but also improve operational efficiency, making them attractive to investors who are increasingly looking for companies that prioritise sustainability.
Another popular avenue for quick gains in sustainability is Green Financing. Simply putting, this is a type of loan designed to promote environmentally-friendly activities, encouraging companies to invest in projects that reduce their environmental impact. These loans come with reduced interest rates, providing financial incentives for companies to meet their sustainability goals. As the world increasingly focuses on decarbonisation and addressing climate change, the demand for a low-carbon economy is growing and this transition requires significant capital investment to support activities that cut GHG emissions and assist firms in adapting to the effects of climate change.
For example, last year Biocon has raised a $1.2 billion green loan to fund its purchase of Viatris’ biosimilars business. It is one of the largest green loans raised by a pharma company in the APAC region. Biocon agreed to meet certain sustainability targets that helped reduce the cost of the loan.
What are the policy incentives that the government can give, especially to MSME pharma companies, who are already upgrading their facilities to the revised Schedule M?
The revised Schedule M, introduced by the Ministry of Health and Family Welfare, aims to strengthen Good Manufacturing Practices (GMP) in India’s pharmaceutical sector. This revision comes in response to quality concerns highlighted by recent international incidents involving contaminated Indian drugs. As I am also Hon. General Secretary at IDMA (Indian Drug Manufacturers Association), I am proud to say that IDMA has played a crucial role in this transition, organising workshops across the country in collaboration with the Central Drugs Standard Control Organisation (CDSCO). These initiatives have been pivotal in educating industry stakeholders about the new standards
While necessary for ensuring drug safety, these new regulations pose significant challenges for MSME (Micro, Small, and Medium Enterprises) pharma companies, particularly due to the heavy investments required for infrastructure upgrades. It has been decided to provide a transition period of 6 months for large manufacturers (over 250 Crores turnover) and 12 months for MSMEs (less than 250 crores turnover). However, while the industry largely welcomes the move, MSMEs have raised concerns about the feasibility of meeting the one-year compliance timeline. With over 10,500 pharma units across India, out of which 80 per cent are MSMEs, these smaller entities are the backbone of the sector providing affordable medicines to vast population.
In light of these challenges, the government could consider these policy incentives:
- Subsidies and Financial Assistance: Government could provide the financial support in form of subsidies or low-interest loans which would help MSMEs to manage cost compliance without risking their financial stability. Government Schemes like PTUAS (The Promotion of Technology Upgradation Assistance Scheme) aims to support MSMEs in the pharmaceutical sector by providing financial assistance for technology upgrades and infrastructure development. However, they can help implementing this scheme by creating more awareness, may increase the funding to cover larger portion of cost associated with faster disbursement.
- Tax Incentives: By offering tax breaks for investment in GMP-compliant infrastructure, government could ease out the financial burden on MSMEs, encouraging them to undertake necessary upgrades.
- Reasonably Extended Timelines: MSMEs should be allowed to implement the necessary changes in staggered and phased manner with reasonable extended timeline while continuing their operations to meet their orders.
Government should consider offering these incentives, they can support MSMEs meeting their high industry standard of quality and safety.
Can you share highlights of Encube Ethicals’ Sustainability journey over the years, and the way forward, or share best practices, to guide smaller companies on this same path?
At Encube, our commitment to sustainability is not just a corporate strategy, it’s a heartfelt responsibility to Nature. Encube has always accorded the highest importance to ethical and sustainable business practices which prioritise environmental and social sustainability. Our sustainability efforts focus on managing energy demand, recycling wastewater through our IIOT system across Engineering to control fuel, electricity & water more effectively and efficiently and, recovering energy from hazardous waste through co-processing in cement kilns. Our admin building, at Goa site, is Green Building certified by IGBC with LEEDS Platinum rating since 2012 and our commitment to sustainability extends to the automation of our logistics with the implementation of a robotic warehouse ASRS. This advanced system is designed to optimise storage and retrieval processes, significantly reducing energy consumption and waste. Our in-house industrial kitchen serves nutritious meals to all my Encubians and visitors as part of our social impact initiative, we also maintain Zero Discharge from our ETP across the sites.
At our new plant Pithampur which is born with all these practices, we have kickstarted one very special project of Rain Water Harvesting where I proudly say that we will be saving upto 4.7 Crores Litres of water during rainy season per year. Gradually, we are taking such projects contributing to a more Sustainable Environment and preserving our Mother Nature.
At Encube, our MES (Manufacturing Execution System) project is a cornerstone of our journey towards a fully paperless operation. This advanced system, currently under implementation, will revolutionise our manufacturing and packaging processes by eliminating paper-based batch records. By digitising our manufacturing workflow will help us real-time data monitoring and control, ensuring precision, traceability, and efficiency at every step of production. We have gone paperless in our labs with LIMS which has not only saved 80 per cent usage of paper at site but also allows for more efficient data collection, analysis and reporting.
We oversee the implementation of the highest standards of good manufacturing practices at our sites to ensure product quality and safety for our consumers. We have strong pharmacovigilance mechanisms in place to track and monitor consumer grievances and complaints, and any reported adverse effects from the use of our products. We maintain the highest standards of corporate governance and business ethics, and our code of conduct is an effective mechanism to track and implement ethical business practices within our organisation and the value chain. Additionally, we are in the initial phase of detailed ESG assessment and rating in collaboration with a leading professional consulting firm, to shape our sustainability roadmap for the upcoming years.
I always believe that “Charity Begins at Home”, by starting with our own operations, we set an example of how sustainability can be woven into the fabric of business. Sustainability is more than a commitment, it’s a path to operational efficiency and long-term value creation. I encourage all companies, regardless of size, to adopt sustainable practices. Smaller companies can begin by assessing their current operations and making gradual improvements. Together, we can create a future where high-quality, affordable medicines are produced in harmony with our planet, ensuring that our actions today will safeguard tomorrow.
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