Organization Name:
Novo Nordisk
Region:
Social Issue:
Initiative/ Project Description:

Novo Nordisk has pioneered a new approach, the Blueprint for Change programme, to evaluating the impact of its sustainability initiatives in China. Rather than only focus on the impact of sustainability for Novo Nordisk, we also include an assessment of the impact of sustainability to the Chinese society. Novo Nordisk’s Triple Bottom Line strategy goes well hand in hand with Creating Shared Value. We see the concept of shared value as starting with the premise that economic needs as well as societal needs define markets.  Since 2009, Novo Nordisk has sought to increase our understanding of how Novo Nordisk creates value through its Triple Bottom Line business principle. This is done by identifying the drivers of value creation, measuring realised benefits for both society and the organisation, and sharing this information with our stakeholders. Based on that, the company optimises its value creation and inspire others to make sustainability-driven business decisions. In our presentation we want to highlight that addressing societal harms and constraints does not necessarily raise costs for firms, because they could innovate using new technologies, operating methods, and management approaches and as a result, increase their productivity and expand their markets.

In China, Novo Nordisk strives to pursue a holistic strategy that goes beyond business as usual – provision of new innovative treatments and services – by also focusing on physician training, patient education, strengthening the healthcare system, public awareness, local production and R&D.

Between 1993 and 2003 the prevalence rate of diabetes in China increased threefold. This increase was due to the ageing of the population, the move to urban living and the resulting increase in the overweight population. The economic burden of disease weighed heavy especially on the lower and middle income groups, who were unlikely to have access to health insurance and only had limited access to state provision of healthcare. The International Diabetes Foundation estimated that China would lose $557.7 billion of its national income between 2005-15 in healthcare expenditure for diabetes and cardiovascular related diseases.

 

Social Results:

As a result of our holistic market entry strategy into China, Novo Nordisk has been able to realise value for both society and the company:

Training of 220,000 physicians (2010): Investments in strengthening the local healthcare system have built strong relationships with local stakeholders including people with diabetes and healthcare professionals.

Training of 280,000 people with diabetes (2010): Since 1997, patient education had saved the Chinese society DKK 3.7 billion by reducing diabetes related complications while increasing insulin sales for Novo Nordisk by DKK 596 million.

We have found that training of physicians and offering education and support for people with diabetes have saved 140,000 life years, and this number was projected to increase by 30% annually since the benefits of effective diabetes care were normally seen over a longer time span.

Business Results:

Looking at 2005 to 2010, our approach to – and investments in – the Chinese market created significant value for the Chinese society and Novo Nordisk. Today, China is the third biggest market in Novo Nordisk’s business and the second largest insulin market. In 2010, we realised a 63% market share and sales of DKK 4,500 million, and insulin sales by volume of 12,000 mega units. Our long-term commitment to changing diabetes in China has built trust and our reputation among physicians while strengthening the relationship with key government agencies. Our goal is to be perceived as the world’s leading diabetes are company, leading the fight against diabetes type 1 and type 2. The trendline has been positive and stable compared to competition, and increasing among diabetes specialists.

Comments

ajit jhangiani's picture

Great example of Shared Value creation. Is it possible to draw some conclusions from here and duplicate elsewhere. I would hate to see the momentum created be restricted to China. The diabetic problemm is acute in other places too, such as India, and is bound to become big in Africa. Also, how do the big sugar drink manufacturers like Coke and Pepsi respond to this? Mexico has a very high consumption of Coke.

Scott Dille's picture

Dear Ajit,

Thanks for your comment. We really appreciate your positive feedback and question.

Indeed we can scale up some of the successful activities used in China in other countries to address the rise in diabetes and the growing gap between healthcare supply and demand.

Novo Nordisk has taken a similar approach in many low and middle income countries. We have made shared value cases on a few of these (India, Indonesia and Bangladesh) that you can find here: http://www.novonordisk.com/sustainability/How-we-manage/blueprints.asp.

You can also read a more story telling approach to explaining value creation in Novo Nordisk's sustainability magazine here: http://www.novonordisk.com/sustainability/how-we-manage/tbl-quarterly.asp.

Please feel free to send a mial for post a comment if you have any more questions.

All the best,

Scott

Bbek Nayak's picture

Nice work by Novo Nordisk in China. And it's appreciable work to bring awareness in healthcare sector. I think, particular in diabetes, if one cautious for their health, take healthy diet along with take preventive steps earlier can stay a miles away from diabetes.

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