Nordea mulling holdings in drugmakers that source APIs from water polluters
The Scandinavian group – which manages assets worth $240bn (€220bn) and has holdings in Novartis, AbbVie and Roche - made the comments after a visit to India during which it uncovered deficiencies at a number of bulk drug suppliers.
Beslik told us that “Treatment of waste water from pharma industry in the places we visited is beyond any acceptable level. There is lack of treatment plants as well as a lack of supervision from authorities regarding pollution.
He added that: “There is a clear environmental damage caused by lack of waste water treatment.”
The Nordea team visited India to assess water use practices at companies that supply firms in which it invests. According to Beslik the group has also quizzed drugmakers about supplier oversight.
“We have sent letters to 25 holdings we have and we have received some answers. In August we will evaluate this and take measures we find suitable from our investment point of view” he said.
Business case
The primary reason that India is the major supplier of active pharmaceutical ingredients to drugmakers in Europe and the US is that production costs are lower.
However, such cost advantages should not be achieved by working with suppliers that pollute according to Beslik, who cited both environmental and business reasons as arguments for his view.
“There is a financial risk embedded in lack of environmental management in supply chain and most sound and long term businesses know this. Lack of water resources in processes is costly and time consuming obstacle as well as potential litigation of loss of access to land due to pollution.”
Antibiotic resistance
Nordea is not the only organization to criticize manufacturing practices at bulk drug manufacturers in India. Last week authors of a paper published by SumOfUs suggested pollution from API plants is furthering the spread of antibiotic resistance.
This was echoed by Mansur Gharabaghi, a spokesman for Indian antibiotic API supplier DSM-Sinochem, who said poor waste water treatment like that observed by Nordea plays a part in this process as well.
He told us it is common practice in India "to send waste and wastewater streams to municipal treatment facilities where it gets mixed with other industrial and household waste streams. Here a wide range of pollutants are combined. Recent studies show, that wastewater treatment plants that receive effluent waste streams from several sources, can contribute in both in the emergence and spread of resistance.
"Antibiotic Resistant bacteria have been detected in high numbers in treatment plants" Gharabaghi said, adding that municipal treatment facilities are where "bacteria from the environment meet human pathogenic bacteria as well as bacteria that are part of our normal human flora."
He added that DSM-Sinochem - a joint venture between DSM and Sinochem - owns and operates waste water treatment plants at all of its faciltiies.
