This week, government ministers will convene with finance, procurement and environmental leaders at the OECD Global Public Procurement Forum to discuss how public procurement can be used to unlock social, environmental and economic benefits.

For the life sciences sector, this is of particular importance. Over the last decade, we have seen companies accelerate a wide range of initiatives aimed at achieving ambitious environmental targets. At the same time, the importance of strong and resilient supply chains to ensure people receive their medicines and vaccines has become ever clearer.

Health systems around the world are also working towards similar goals and are increasingly turning to public procurement practices as a lever.

When it comes to healthcare, the focus must always be on driving the best possible health outcomes. How procurement practices balance environmental, financial and social goals – with those of strengthened supply chains and ensuring people can access the medicines and vaccines they need – requires particular attention.

The challenge: advancing sustainability without compromising access

According to data from the OECD, greenhouse gas emissions linked to the health sector made up 4.4% of overall emissions on average in OECD countries in 2018. Several countries – including Austria, France, the Netherlands, and the UK – are taking steps to integrate procurement criteria that address the emissions of their health sectors.

In the last available year of data, emissions from supply chains represented nearly four-fifths (79%) of health sector emissions on average across OECD countries.

Across the globe, life sciences companies are taking bold steps to reduce the environmental footprint of their operations and products. From decarbonizing manufacturing sites to optimizing supply chains and product packaging, the industry is committed to meeting sustainability targets.

This transformation is complex, and requires long-term investments, innovation in product design, and shifts in regulatory frameworks. These developments often happen within the fast-changing policy environment that companies operate within.

The life sciences sector directly contributes to improving public health. As a result, it is uniquely and highly regulated by manufacturing and quality assurance processes. This means that introducing environmental criteria into procurement decisions must be done with care – striking a delicate balance between advancing sustainability and safeguarding patient access, safety, and innovation.

The opportunity to pursue a shared agenda

Sustainable procurement can be an opportunity for collaboration between healthcare systems and industry to get this balance right. However, for this approach to be successful, it must be carefully implemented. Without a thoughtful design, procurement policies can inadvertently introduce requirements that disrupt supply chains, limit product availability, and put the brakes on future innovation.

For example, without a transitional phase, suppliers still adapting to new norms – particularly smaller or local manufacturers – might be excluded. In a sector where continuity of care is critical, such disruptions can have serious implications for patients.

IFPMA has developed a set of core principles that can guide policy design on sustainable procurement:

• Collaborate with all stakeholders early and continuously: Policymakers and procurement agencies must engage with relevant stakeholders – including pharmaceutical companies – from the outset. Co-designing criteria and roadmaps ensures that sustainability objectives are aligned with feasibility, avoids duplication across jurisdictions, and ensures coherence across the healthcare system. For example, research from ISPOR highlights that green criteria should not be integrated in reimbursement decisions (i.e., through an HTA process) but rather considered during procurement.
• Maintain flexibility and continuity of access: There is potential to see procurement as an incentive, without compromising patient access or excluding suppliers that are still in a transition phase.  A phased approach is necessary, grounded in assessing the impact on patient access and health outcomes to minimize disruptions and ensure it does not impact the ability to enhance the standard of care for patients.
• Pilot new policies and monitor progress: Before full-scale rollout, organizations should pilot initiatives that test new and innovative policy solutions that can drive effective sustainable procurement.
• Align criteria and support the transition: Design supplier-level criteria that align with wider sustainability goals and establish clear timelines and support for companies to prepare for evolving requirements. Product-level assessments are more complex to implement and, if sought, must be piloted carefully to avoid delays in access for patients. One approach under development is a Product Life Cycle Assessment (LCA) methodology, led by the Sustainable Markets Initiative (SMI) consortium together with the British Standard Institute (BSI), scheduled for launch by the end of 2025. Other options may also be considered, such as care pathway assessments that consider the full environmental footprint of treating a disease.
• Establish a clear and balanced health system sustainability framework and implementation roadmap: For companies to make the right investments, a predictable framework is needed. Data requests should be tailored to be relevant for sustainability objectives and approached in the full context of the health care pathway.

Procurement as a driver of resilient supply chains

Achieving environmental sustainability, supply security, and patient access to medicines is not mutually exclusive. But to do so, we need procurement systems that are pragmatic and recognize the specificities of the life sciences sector and allow for flexibility in implementation.

The OECD’s Public Procurement Forum is a discussion platform that can help shape this agenda. As governments, procurers, and industry come together, there is a unique opportunity to co-create procurement frameworks that support both health and environmental goals, without compromising patient outcomes or system resilience.

Author

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  Manolis Karamalis Deputy Director, Value and Access m.karamalis@ifpma.org