In April 2020 Ethical Consumer searched the GlaxoSmithKline website and Annual Report 2019 for information on the company's supply chain management. The website directed readers to several documents, including: "GSK Public policy positions: Working with Third Parties” dated May 2016. On the basis of this, GSK was rated as follows:

Supply Chain Policy (poor)

The “GSK Public policy positions, Working with Third Parties” document included reasonable provision on freedom of association and prohibited forced labour and discrimination. The clauses on wages and working hours were insufficient however, as they granted these only in accordance with local laws. The clause on child labour was also insufficient, as it did not clearly state that it was aligned with the ILO Convention on child labour and again just stated it would comply with local law. As a company working in over a hundred countries around the world, and in places where there is a high prevalence of child labour, low wages, long working hours, and restrictions concerning freedom of association, Ethical Consumer would expect GSK to have a more rigorous supply chain policy that ensured workers rights were protected.

Stakeholder Engagement (poor)

A search of GSK website found no evidence that it was a member of a multi-stakeholder process nor was it involved in discussions with trade unions, Not For Profits or NGOs in helping to improve workers' rights. GSK did offer a Confidential Reporting Line to employees and 3rd party suppliers to report violations of the Code of Conduct. Calls could provide anonymous feedback as the company had taken steps to remove ID caller information. It was not clear if it was independently investigated or whether employees could speak in their own language. Overall GSK received was considered to have a poor approach to stakeholder engagement.

Auditing & reporting (poor)

The company stated in its Modern Slavery Statement 2019 that "In 2019, over 13,500 third parties underwent a risk assessment, of which 608 were deemed to be at high risk of potential non-compliance from a labour rights perspective based on their country of operation and the type of product or service they provide. High risk third parties have their policies and processes to manage labour rights risks independently assessed by EcoVadis. During 2019, 193 third parties that completed an EcoVadis assessment failed to meet the minimum score we expect on labour rights and were required to make improvements. A further 203 third parties who were reassessed by EcoVadis in 2019 following poor performance on labour rights in previous years, increased their score to meet our required threshold.In 2019, we conducted over 40 on-site audits of our third-party suppliers covering environment, health and safety, and labour rights."

It also stated: "No incidences of modern slavery were identified through these audits. Major labour rights non-compliances were found at five third-party suppliers of active pharmaceutical ingredients, intermediates and agro-commodities in China, India, Mexico, Pakistan and Indonesia. The issues related to wages, working hours, regular employment, and policies/risk management systems. Following these audits, each third-party supplier is required to develop and agree a corrective action plan to address the findings, which are tracked and followed up through engagement activities. "

While the company was conducting audits and did have a staged approach to issues of non-compliance it did not appear to have a clear schedule and committment to audit its whole supply chain, including some second tier suppliers. It also did not state who paid for audits nor did it provide adequate analysis of audit results. Overall GSK was considered to have a poor approach to auditing and reporting.

Difficult Issues (poor)

A search of GSK's website found no evidence that it was addressing any difficult issues within its supply chain such as payment of living wages and what it did in countries where freedom of association was curtailed by law or audit fraud.

Overall GSK received Ethical Consumer’s worst rating for Supply Chain Management and lost a whole mark in this category.

Reference:

www.gsk.com (16 April 2020)

In Jan 2017 Ethical Consumer viewed an article on the Business and Human Rights website dated Feb 2016. The article stated that Viiv Healthcare was attempting to patent HIV drugs in India to prevent the use of cheap generics, and was being opposed by locals living with HIV/AIDS. It stated:

"People living with HIV have opposed patent applications in India for two important HIV medicines, dolutegravir and cabotegravir. Médecins Sans Frontières/ Doctors Without Borders (MSF) supports these ‘patent oppositions,’ which have been filed to challenge an attempt by ViiV Healthcare (a joint venture by Pfizer and GlaxoSmithKline) to obtain monopoly rights in India while several of its patent claims are questionable according to Indian patentability criteria...“Patents for these drugs would mean complete monopoly status for a company which has already restricted the availability of an important HIV drug in India,” said Leena Menghaney, Head of MSF’s Access Campaign in South Asia."

The company lost a whole mark under Irresponsible Marketing.

Reference:

Viiv healthcare attempt to patent HIV drugs (4 January 2017)

According to an article published on the guardian website www.guardian.co.uk on 20 January 2015, the volunteer doctors of Médecins sans Frontières (MSF) had called on two giant pharmaceutical companies, one being GlaxoSmithKline, to lower the price of a new vaccine against pneumococcal disease that was needed by children in developing countries, but was unaffordable for some of their governments.
In a new report on vaccine pricing, MSF said British company GlaxoSmithKline (GSK) should slash the price of the vaccines to $5 (£3.20) per child in developing countries. At the moment, the two big pharma companies were the sole manufacturers of the pneumococcal vaccine.
The secretive nature of the industry meant that prices were not disclosed in all countries, but, where they were known, there was huge variation. Hospitals in Morocco paid nearly $64 and in Tunisia $67, whereas the manufacturer’s price in France was less – at about $58.
“We have an irrational situation where some developing countries like Morocco and Tunisia are paying more for the pneumococcal vaccine than France does,” said Kate Elder, vaccines policy adviser for MSF’s Access Campaign. “Because of the astronomical cost of new vaccines, many governments are facing tough choices about which deadly diseases they can afford to protect their children against.”
MSF says the pneumococcal vaccine is a big contributor to the soaring cost of vaccinating a child in the poorest countries – it accounts for 45% of the total.
The full vaccination schedule which every child should receive included 12 vaccines. Since 2001, the cost of the full package has risen dramatically, says the report, The Right Shot: bringing down barriers to affordable and adapted vaccines.
“The price to fully vaccinate a child is 68 times more expensive than it was just over a decade ago, mainly because a handful of big pharmaceutical companies are overcharging donors and developing countries for vaccines that already earn them billions of dollars in wealthy countries,” said Rohit Malpani, director of policy and analysis for the MSF campaign.
“Donors will be asked to put an additional $7.5bn on the table to pay for vaccines in poor countries for the next five years, with over one-third of that going to pay for one vaccine alone, the high-priced pneumococcal vaccine; just think of how much further taxpayer money could go to vaccinate more children if vaccines were cheaper. We think it’s time for GSK and Pfizer to do their part to make vaccines more affordable for countries in the long term, because the discounts the companies are offering today are just not good enough.”

In a statement, GSK said its pneumococcal vaccine is “one of the most complex we’ve ever manufactured, essentially combining 10 vaccines in one”.
It added: “For Gavi-eligible countries, we are providing this vaccine at a deeply discounted price. At this level, we are able to just cover our costs. To discount it further would threaten our ability to supply it to these countries in the long-term. Nevertheless, we continue to look at ways to reduce production costs and any savings we make we would pass on to Gavi.”

The company lost a whole mark under Irresponsible Marketing.

Reference:

Pharmaceutical companies told to slash price of pneumococcal disease vaccine (20 January 2015)

In November 2019 Ethical Consumer viewed the pharmaceutical Transparency Index run by the campaigning organisation All Trials, started by Dr Ben Goldacre and Dr Sile Lane at Sense About Science. All Trials argued that transparency in clinical trials was not being sufficiently respected by pharmaceutical companies, with seriously detrimental effects on medicine.

The Index rated 46 pharmaceutical companies on their commitment to transparency.

Ethical Consumer marked down all companies who appeared below the top ten. This included ViiV Healthcare, which was in 36th place, Sanofi, in 25th place, Johnson & Johnson, in 15th place, and Bayer, in 11th place.

The company lost half a mark under Irresponsible Marketing.

Reference:

Transparancy Index (4 November 2019)

When viewed by Ethical Consumer in April 2020 the GlaxoSmithKline family tree on the Hoovers.com website stated that the company had operations in many countries considered by Ethical Consumer to be oppressive regimes: Bangladesh, Pakistan, Nigeria, China, Russia, Mexico, Philippines, Myanmar, Turkey, Israel, Egypt, Cambodia and Saudi Arabia. As a result the company lost a whole mark in the Human Rights category.

Reference:

Generic Hoovers ref (2020)

In November 2019 Ethical Consumer viewed the "Access to Medicine Index 2018" report. The report was produced by the Access to Medicine Foundation and funded by the UK government, the Bill & Melinda Gates Foundation and the Dutch Ministry of Foreign Affairs. It analysed 20 of the world's largest research-based pharmaceutical companies on how they make medicines, vaccines and diagnostics more accessible in low- and middle-income countries. GlaxoSmithKline was listed in first place, meaning that the Foundation believed that it was doing better at this than the other companies examined. This was considered a positive policy addressing a human rights issue and is for information only.

Reference:

Access to medicine Index (4 November 2019)

The Business and Human Rights Resource Centre published a report in 2017, First Year of FTSE 100 Reports under the UK Modern Slavery Act: Towards Elimination? The report assessed how well FTSE 100 companies demonstrated their understanding and commitment to preventing modern slavery from taking place anywhere in their operations or along their supply chains. These companies, the report argued, had the resources and capacity to provide leadership for the 9,000-11,000 companies who are required to report under the Act according to Home Office estimates. It highlighted the importance of regular assessments to ensure companies were held to account on their shared responsibilities to improve standards to help improve the lives of the victims of modern slavery (estimated to be 16 million in 2016) and ultimately eradicate the practice altogether.

The report placed company statements in 10 scoring tiers with 10 being the highest tier and one the lowest. Companies with no statement were placed in tier zero. 98 companies in the FTSE 100 had produced a statement by September 2017. No company scored in tier ten. Some improvements were found, however nearly half of the companies did not meet the minimum requirements set out by the Act.

GlaxoSmithKline plc (a pharmaceutical company) scored in tier 5 and was found to have met the minimum requirements of the Act, which includes evidence of a modern slavery statement which was signed by the director, explicitly approved by the Board and available on the company's homepage. More than half the companies (52) were in the bottom four tiers.

The company therefore lost half a mark in the Human Rights category.

The methodology used to place the statements in the ten scoring tiers used six reporting areas of the UK government designed to benchmark company action (structure, business and supply chains; policies in relation to slavery and human trafficking; due diligence processes; risk assessment and management; effectiveness; and training). Each company could score up to a total of 30 points. Companies that did not have polices or processes in place but stated an intention to develop and implement them were credited for stating intention. Companies were divided into 10 tiers with tier 10 representing a high reporting standard and tier one indicating no, or cursory, effort. Companies with no statement were placed in tier zero.

Most companies provided an overview of their business (including whether they have operations outside the UK), providing general descriptions of their services and products, and overall figures on the number of employees, customers and suppliers. However, detailed reporting on supply chains was weak, including on the structure of supply chains and/or what goods or services are sourced and from where (by region or country). Company performance was very weak on development and oversight of policies, particularly in terms of seeking input and guidance from relevant internal and external stakeholders. On risk management, companies often failed to provide information on next steps taken to address the risks they disclose. Effectiveness was the lowest scoring category. 50 companies did not provide any information at all.

Statements and data were gathered from Modern Slavery Registry; a free, open and searchable registry of company statements under the UK Modern Slavery Act.
GlaxoSmithKline lost half a mark under Workers' Rights.

Reference:

FIRST YEAR OF FTSE 100 REPORTS (2017)