Beyond Green: Operationalizing Sustainability in a Changing Environment

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Beyond GreenOperationalizing Sustainability in
a Changing Environment

• Veronica Croucher
  Director, Group Sustainability
  Projects
• Peter Lalli
  Senior Director,
  Business Planning and Sustainability

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Sanofi-aventis

• 2008 sales Euro 27,568 million
• No. 4 Worldwide
• No. 1 in Europe
• Present in double-digit growth in emerging
  markets
• Present in more than 100 countries
• Almost 100,000 employees

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Sanofi-aventis is transforming itself

• The ambition of sanofi-aventis is to become a
  diversified global leader in healthcare. The
  Group strategy is based on three key themes to
  reach these objectives and deliver sustainable
  growth
• Increasing innovation in Research and Development
• Adapting our structures to meet the challenges of
  the future
• Exploring external growth opportunities

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Sanofi-aventis in the U.S.

• Pharma Ops Sales
• Total - 17 Billion
• (incl. Plavix/Avapro/Actonel)
• Consolidated - 10.2 Billion
• Pharma Ops Locations
• Corporate Headquarters
• 5 Regional Hub Offices

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Sanofi-aventis U.S. Industry Rank
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Market Dynamics

• Status / Dynamics
• Passes the 300B mark (July 2008 MAT 303B)
• Growth continues to decline

Market RX Growth YTD
Market Dollar Growth YTD
Will be further impacted by IMS restatements
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Generic ImpactAccounts for 65 of Total Rx
Volume
Dollars
Total prescriptions dispensed
Source IMS NSP ending Feb 2009
Source IMS NPA ending Feb 2009
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The Environment

• A changing regulatory environment in the US
• Patent laws are evolving while current patents
  are challenged
• The current marketing approaches have reached
  saturation or diminishing return points in many
  markets
• Increasing emphasis on demonstrated health
  outcomes (Govt Payors)
• Emergence of the healthcare consumer which is far
  different than the healthcare patient
• The government now is the largest payorfor
  pharmaceuticals

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Changing Roles in the Marketplace
Old Model
Employees
PCPs
Patients/Consumers
Specialists
Promo Mix
Influencers
Decision Makers
Recommending parties
Public payors (eg, Medicare, State)
Pharmacy/specialty pharmacy
Third-party payors
Hospital
Patient advocacy associations
Professional physician associations
Assisted-living/ senior centers/LTC
Wholesalers/ distribution channels
Employers
Public health and policy
KOLs
New Model
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Our Stakeholders
MedicallyUnderserved
Rating Agencies
Investor Groups
Industry Peers
NGOs
Employees
GovernmentAgencies
Patients/Caregivers
ScientificCommunity
HealthcareProfessionals
Suppliers and Contractors
Managed CareOrganizations
Communities
Media
Shareholders
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Transforming to meet the challenge

• New Business Model requires a mindset shift on
  how we define our value proposition and how we
  approach our business
• Expanding the definition of value from product
  to solution
• Improving patient health outcomes
• Patients, Physicians, Payors
• Quality of interaction with customers
• When and in format the customer wants
• More evidence based
• Resource deployment and structure
• Simplify organizational structure by reducing
  layers and increasing spans of control
• Flexible deployment of resources
• Leverage full U.S. presence
• Being the employer, neighbor and investment of
  choice
• Development opportunities for tomorrowwhile
  meeting the needs of today
• Community activities and support in the areas
  where we operate
• Growing through innovation

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Embracing sustainability practices used to be
the right thing to do
Embracing sustainability practices is now
the necessary thing to do
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Sustainability at sanofi-aventis What does it
mean to us?

• Sanofi-aventis acts in an ethical and responsible
  manner to be a true healthcare partner, today and
  tomorrow.
• Our approach places the patient at the center of
  our business conduct in conjunction with our
  social and corporate responsibilities as well as
  our environmental commitment.

• This vision of sustainability is an integral part
  of our global strategy, designed to respond to
  patients needs and expectations by ensuring a
  balance between access to healthcare, innovation,
  respect for intellectual property rights and
  sustainability of healthcare systems.
• It only makes sense when it is fully integrated
  in the Groups strategy and culture, in the
  prospect of the long-term performance improvement.

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The sanofi-aventis pillarsTranslating the triple
bottom line
Environment
Social
Economic
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Sustainability at sanofi-aventisFocus

• Access to healthcare (access to medicines and
  vaccines)
• Innovation and respect for intellectual property
  rights
• Outreach and support for patients, patient
  advocacy groups and the general public
• Future of healthcare systems
• Ensuring the quality of our products (counterfeit
  drugs, parallel trade, etc.)

• Social dialogue
• Promoting equal opportunity and preventing
  discrimination
• Commitment to health and safety
• Career management and skill development
• Social protection
• Balancing work and personal life
• Local presence and a commitment to local
  communities
• Humanitarian and solidarity programs

• Codes of conduct
• Corporate governance
• Ethics in RD (clinical trials, use of laboratory
  animals, stem cell research, etc.)
• Fighting corruption
• Human rights
• Relationships with suppliers and contractors
• Responsible marketing
• Risk management

• Managing natural resources
• Respecting biodiversity
• Climate change
• Environmental health

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Sustainability Hot Topics
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Rating Agencies Indices
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Other Partnerships

• Sanofi-aventis is also a member of a number of
  other organizations promoting sustainability

CSR Europe is the leading European business
network for corporate social responsibility with
70 multinational corporations and 25 national
partner organizations as members.
Sanofi-aventis a founding member of the EDH
initiative (Entreprises pour les Droits de
lHomme). The Businesses for Human Rights
initiative comprises eight members, all
French-speaking international groups, and was
created following exchange with organizations
such as Business Leaders Initiative on Human
Rights (BLIHR) and the French section of
Amnesty International.
EDH
Business for Social Responsibility works with its
global network of more than 250 member companies
to develop sustainable business strategies and
solutions through consulting, research, and
cross-sector collaboration.
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U.S. Sustainability Efforts
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U.S. Sustainability

• US Sustainability Core Council in place
• Sustainability strategy in development
• Strategy will enhance/formalize existing
  practices
• Sustainability is the way we do business NOT a
  new program
• Existing initiatives with little or no support
  can be brought under the sustainability umbrella

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U.S. Sustainability Core Council
Overall Leads Overall Leads
Pete LalliBusiness Planning and Sustainability Veronica CroucherGroup Sustainability

Executive Core Council Executive Core Council
VPBusiness Information and Support VPOncology BU
VP Stakeholders Office (RD) VPHuman Resources
VPMarket Access and Business Development VPPolicy and Govt. Relations (sanofi pasteur)
VP U.S. Corporate Affairs VPCFO
VP General Counsel AVP Site Services (sanofi pasteur)
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sanofi-aventis SustainabilityU.S. Organization
Focus Areas
Health Promotion Patient 21
Social Engagement
Health Safety
Environment
Purchasing Supply Chain
Conducting Business Ethically
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Health Promotion Patient 21Sub-Team
Function Scope
Marketing and Sales Planning RD
US PAPs US Pharm Ops
Supply Chain US Pharm Ops
Specialized Customer Capabilities US Pharm Ops
US Government Affairs US Pharm Ops
RD Sanofi pasteur US
RD (Toronto) Sanofi pasteur CA
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Patient 21
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Social EngagementSub-Team
Function Scope
Community Affairs US Pharm Ops
US Philanthropy US Pharm Ops
Human Resources US Pharm Ops
Communications Sanofi-aventis CA
Communications Sanofi pasteur US
Human Resources US RD
Human Resources Sanofi pasteur US
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Social Engagement
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Business EthicsSub-Team
Function Scope
US Legal US Pharm Ops
Compliance US
Quality and Compliance US Pharm Ops
Quality and Compliance US RD
Investor Relations US
Legal Sanofi-aventis CA
Legal Sanofi pasteur US
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Conducting Business Ethically
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Health Safety and EnvironmentCurrent Sub-Team
Function Scope
HSE US RD
HSE US Pharm Ops
HSE Sanofi pasteur
HSE Sanofi-aventis CA
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Health Safety Environment Performance
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NA Purchasing Supply Chain CouncilSub-Team
Function  Scope 
Purchasing US Pharm Ops
Distribution/ Supply Chain US Pharm Ops
Clinical Purchasing US RD
Scientific Purchasing US RD
Purchasing Sanofi pasteur US
Purchasing Sanofi-aventis CA
Industrial Affairs US Pharm Ops
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North American Purchasing Council
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2008 Corporate Sustainability Report
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sanofi-aventis Internet websitehttp//sustainabil
ity.sanofi-aventis.com
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U.S. Sustainability Efforts in Action
Sustainability Awareness Program
U.S. Mailbox US.Sustainability_at_sanofi-aventis.com
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Sustaining a Healthy Future