Management Report & Annexes | Basic Information About the Group
10. Product Stewardship
We assess the possible health and environmental risks of a product along the entire value chain. This starts with research and development and continues through production, marketing and use by the customer through to disposal.
At issue here are not just the safe handling and use of our products, but also the transparent communication and transfer of product safety information. Product stewardship involves both compliance with statutory requirements and voluntary commitment. Here, we also take into account the precautionary principle as explained by the United Nations and the European Commission.
The precautionary principle describes the preventive use of protective measures against risks, should sufficient scientific information not be available. It is a possible tool for consumer protection and risk management. It is explained in Principle 15 of the Rio Declaration of the United Nations Conference on Environment and Development (1992) and in the communication from the European Commission (COM 2000/1). This principle is applied whenever there is scientific uncertainty in a given area and sufficient evidence also exists that there could be a sustainable impact on people or the environment. We support the application of the precautionary principle according to the stipulations of the European Commission. These measures should be proportionate – i.e. they should meet the chosen level of protection; be applicable without discrimination, in other words comparable situations should not be treated in different manners; be consistent with similar measures undertaken previously; and be examined to determine which costs and benefits are associated with the application of the precautionary principle. The measures undertaken are reviewed as soon as new scientific data are available for the particular situation.
Since 1994 Bayer has supported the voluntary Responsible Care™ initiative of the chemical industry, which was globalized in 2006 with the introduction of the Responsible Care Global Charter. We cover all main elements of the charter with our HSEQ (health, safety, environmental protection and quality) management systems and activities. We are also actively involved in the further development of scientific risk assessment through associations and initiatives.
International associations such as the European and international chemical industry associations (CEFIC/ICCA) and the OECD (Organisation for Economic Co-operation and Development), as well as initiatives such as the ECETOC (European Centre for Ecotoxicology and Toxicology of Chemicals) or the EPAA (European Partnership for Alternative Approaches to Animal Testing), work to evolve the scientific assessment of chemicals, research new test methods and monitor the implementation of statutory regulations. Bayer actively accompanies these efforts in its association activities. We are also involved in the Long-Range Research Initiative of the ICCA and endorse the goals of the WHO and E.U. action plans for improving health and environmental protection, for example with the further development of human biomonitoring through an alliance with the German Chemical Industry Association (VCI) and the German Federal Ministry of the Environment.
Since 2007 we have operated in accordance with the European chemicals regulation REACH (Registration, Evaluation, Authorization and Restriction of Chemicals). It affects all our activities as manufacturer, importer and user. To adequately address the scope and complexity of the REACH requirements, we have approved Group-wide and subgroup-specific regulations. The registration obligation under REACH applies irrespective of marketing activities for all substances that we produce or import in quantities of more than one metric ton.
We observe the required registration phases for substances that have been used for a longer period of time. The final registration phase will end on June 1, 2018. Substances registered already during the first two phases are now being evaluated by the regulatory authorities. In the future this could result, for example, in additional testing requirements, new risk management measures or inclusion in the authorization procedure.
A number of Bayer substances are also affected by the REACH authorization process, which restricts the use of particularly hazardous substances or can lead to their replacement or prohibition.
The authorities monitor the implementation of REACH through regular inspections. So far none of the inspections at Bayer has resulted in complaints. As we also use many products from other manufacturers, we maintain close contacts with our suppliers and ensure that they confirm compliance with REACH for these products.
Our Group Regulation “Substance Information and Its Availability” extends beyond the scope of legal requirements. In this way we are ensuring that substance assessments comparable to those established under REACH will also be applied at Bayer sites that are not subject to this European regulation.
At the same time, we are implementing the Globally Harmonized System (GHS) for the classification and labeling of chemicals, which came into force in the European Union (E.U.) in 2009. The purpose of this regulation is to achieve a globally standardized system for classifying chemicals and labeling them appropriately on packaging and in safety data sheets.
We also support the Global Product Strategy (GPS), a voluntary commitment by the chemical industry initiated by the International Council of Chemical Associations (ICCA). Its objective is to improve knowledge about chemical products, especially in emerging and developing countries, and thus increase safety in the handling of these products. The ICCA has established an information portal through which summarized details on products (GPS Safety Summaries) are made available. GPS is of particular relevance for MaterialScience.
In accordance with the respective product safety and information obligations, all subgroups compile product information on raw materials, intermediates or end products. To ensure worldwide access to this information, our subgroups use corresponding IT systems, including for product labeling.
Product stewardship in the use of biotechnology
Product development in our Pharmaceuticals and Crop Protection businesses makes use of biotechnological methods. Biotechnology has already gained significant importance in pharmaceutical product development. The HealthCare products Betaferon™/Betaseron™, Kogenate™ and Eylea™ are manufactured by a biotechnological process.
Plant biotechnology can help to improve crop yields, yield security and the stress tolerance of plants without the need for an increased input of resources through both genetic engineering and non-genetic engineering methods.
Safety is Bayer’s top priority in the use of biotechnology too. Beyond our observance of all relevant legal provisions, we have formulated a Bayer Group Regulation “Position on the Responsible Use of Gene Technology” and specific regulations for the subgroups and service companies.
Before any product reaches market maturity, we subject it to a stringent approval procedure to determine whether it is safe for human health, animals and the environment.
HealthCare has established strict safety measures for handling and for research & development in its “Biological Safety” regulation and its “Requirements for the safe handling of biological agents” procedure.
In 2013 CropScience maintained its focus on product stewardship for customers both within and outside the company through its activities in the context of the industry’s Excellence Through Stewardship Program. Product stewardship and quality management processes are the top priority in all activities connected to plant biotechnology.
We provide our stakeholders with comprehensive, transparent and reliable information about our products and services in accordance with our Bayer Group Regulation “Responsible Marketing & Sales.”
During research into new active pharmaceutical ingredients, animal studies are prescribed and only replaceable to a certain extent. They are essential from a scientific viewpoint to assess the effects of our products, especially on people, but also on nature and the environment. In our handling of animals, we respect all legal requirements pertaining to animal welfare. Should animal studies be required to evaluate our substances, Bayer observes the so-called 3Rs principle:
Replace: prior to each project, we check whether a recognized method is available that does not rely on animal studies and apply it.
Reduce: in case no alternative method exists, only as many animals are used as are needed to achieve scientifically meaningful results based on statutory requirements.
Refine: we make sure animal studies are performed in a way that is as gentle on the animals as possible.
Our principles also apply to both the research institutes we commission and our suppliers, whose compliance with our animal welfare requirements we regularly monitor.
Bayer’s Global Animal Welfare Committee monitors the observance of our principles on animal welfare and animal studies within the Bayer Group and in external studies. In 2011 this body – comprised of the animal welfare officers at our research sites and further Bayer experts – began defining performance indicators. Within this context, we each year analyze aspects such as the number of animals used, the number of animals at contract research organizations (CROs), the breakdown according to species and the ratio of regulatorily required studies to exploratory studies. Other indicators such as the number and quality of audits performed at our suppliers and CROs have been initiated and are being internally evaluated. We have begun with the establishment of an internal Bayer database that combines all information about our own animal studies and the evaluation of our cooperation partners. Bayer participates in several European consortia that aim to reduce the number of animal studies or improve their validity: we are active, for example, in the European Partnership for Alternative Approaches to Animal Testing (EPAA); we also help to implement the Safety Sciences for Medicines (SafeSciMET) program and are involved in the leadership of the eTOx project and the MARCAR project of the Innovative Medicines Initiative (IMI). Furthermore, we support the Foundation for the Promotion of Alternate and Complementary Methods to Reduce Animal Testing (SET).
Protection against product counterfeiting
Illegal trade with counterfeit medicines and crop protection products is on the rise worldwide. Counterfeit products in the areas of health care and nutrition put patients and consumers at risk. Substandard products also cause considerable financial damage for both producers and users.
Industry, associations, governmental agencies and non-governmental organizations must join together to fight product counterfeiting. Bayer continuously advocates the strengthening and expansion of existing laws and provisions aimed at the identification and confiscation of illegal products. We undertake a wide range of measures to inform our customers about both the danger posed by, and the insufficient effectiveness of, counterfeit products.
Counterfeit pharmaceuticals rank near the top of the E.U.’s customs statistics. The number of investigations in Germany increased by 39% in 2012 compared with the previous year, and has risen by an even more substantial 100% since 2010. In close cooperation with the authorities, Bayer works to protect the health of patients, customers and users. The focus is on education and information to ensure the reliable identification of our original products, as well as on legal steps aimed at minimizing illegal trade.
Through the internet platform “Beware of Counterfeits,” HealthCare informs patients about the risks of counterfeit pharmaceuticals and provides patients with tips on how they can protect themselves. Bayer participates in the Pharmaceutical Industry Initiative to Combat Crime (PIICC) of Interpol to counteract pharmaceutical counterfeiting through global prosecution and the elimination of related criminal networks.
We also support the establishment of a pan-European system for the verification of pharmaceutical packaging that satisfies the requirements of the E.U. Falsified Medicine Directive. We participate in the SecurPharm project in Germany.
According to an estimate by Europol from 2012, illegal products account for 25% of the crop protection market in some E.U. member states. CropScience provides information and anti-counterfeiting training materials (manuals, workshops, etc.) to retailers, farmers and authorities. In 2013 training courses were conducted in the Middle East, in several E.U. countries and in other regions at which Bayer warned of the dangers of product counterfeiting. In this connection, we also support initiatives by global and regional association committees such as the Anti-Counterfeiting Expert Group of the European Crop Protection Association (ECPA) and the Anti-Counterfeiting Steering Committee of the industry association CropLife International (CLI).
CropScience works together intensively with national and international authorities, thus frequently enabling the confiscation of counterfeit products. In 2013 we further intensified our cooperation with the European authorities to support them in their investigation into criminal networks that place illegal and counterfeit crop protection products onto the European market. CropScience works together with shipping companies and European ports of entry to prevent the transport of counterfeit products by more closely inspecting freight and customers, among other measures. Most counterfeit products originate in Asia and reach the trade market through central European cargo ports. With our support, substantial quantities of illegal products were confiscated by the port authorities again in 2013. CropScience also carries out its own inspections of suspicious goods shipments. In the reporting year, legal action was successfully taken four times against sellers of counterfeit parallel imports in Germany alone.
Benefit-risk management for medicinal products and medical devices
HealthCare continuously assesses the medical benefit-risk balance of its pharmaceuticals and medical devices throughout their entire life cycle. For this process, experts from various disciplines form cross-functional Safety Management Teams (SMTs). These teams jointly evaluate the available benefit and risk data along with other relevant information on the product in order to identify possible safety risks at an early stage and assess the medical benefit-risk balance. The evaluation also makes use of external databases so as to ensure as broad a base of data as possible. Should significant risks be identified, HealthCare immediately takes measures to minimize them, such as updating the product information for patients and physicians.
Further tools in risk minimization programs can include targeted information, e.g. patient education brochures, and training measures for health care providers and patients. SMTs compile medical benefit-risk data and information and produce detailed safety risk management plans. These plans are updated as soon as relevant new benefit-risk data become available. Implementation of risk minimization activities is coordinated by local SMTs in the country organizations.
The Global Pharmacovigilance unit of HealthCare pools safety-relevant information on our products in the company’s own pharmacovigilance database on an ongoing basis. This information is continuously updated and evaluated by experts. In this process, Bayer works closely with the responsible regulatory and oversight authorities at an international, national and regional level. These include the U.S. Food and Drug Administration (FDA), the European Medicines Agency (EMA) and Germany’s Federal Institute for Drugs and Medical Devices (BfArM).
HealthCare’s quality and risk management functions make further contributions to increased safety. We examine external and internal quality assurance requirements for our products through systematic internal inspections – not just in research and development, but also in production. These inspections also cover institutes sub-contracted by us and our suppliers. Through our safety risk management system, drug product risks are systematically identified and assessed, and the necessary steps initiated. Countries and regions receive continuous support to help them comply with regulatory requirements for pharmaceuticals.
Scientific publications by our researchers satisfy recognized international standards that we have undertaken to observe in our Good Publication Policy. We base the implementation of all clinical studies on the Good Clinical Practice guidelines of the World Health Organization (WHO) and on the guidelines of the International Conference on Harmonization (ICH). We disclose the methods and results of clinical trials.
Active pharmaceutical ingredients can enter the environment through human excreta or livestock excrement, improper disposal by users or residues in wastewater from pharmaceutical production.
To assess the potential environmental impact of our pharmaceutical products, HealthCare carries out ecotoxicological investigations of the environmental behavior of trace amounts and degradation products. These assessments are contained in the dossiers submitted to the European regulatory authorities for both veterinary and human pharmaceuticals. It must be demonstrated during the approval procedure that no significant risk exists for the environment when the drug products are used correctly.
Internal company wastewater standards are in place to ensure that no risk to the environment results from the release of traces of active ingredients in wastewater from production sites. The company aims to define specific threshold values that must be met by all HealthCare production sites worldwide.
Measurements carried out by authorities and scientific institutes have revealed that the concentration of individual active pharmaceutical ingredients from human or veterinary medicines present in drinking water is lower than the level that would have pharmacological effects in humans. On the basis of our current knowledge, the presence of individual active pharmaceutical ingredients in bodies of water or drinking water does not pose any risk to humans. This is confirmed by the WHO Report on Pharmaceuticals in Drinking Water published in 2012.
At the scientific level, HealthCare participates in projects aimed at further researching and reducing pharmaceutical residues in the environment:
Within the PILLS project concluded at the end of 2012, HealthCare and its European partners examined the extent to which new purification technologies at so-called point sources are able to completely eliminate pharmaceutical residues. The project partners demonstrated that the construction of wastewater treatment facilities at hospitals featuring special purification technology can further reduce the active ingredient content in wastewater. However, the cost of this purification technology currently remains substantial. The E.U.-sponsored successor project noPILLS therefore examines whether it is possible to address the problem at a lower cost directly at the point of entry. noPILLS also focuses on studying the influence on consumer behavior, for example, with regard to the disposal of expired drug products. Bayer is a member of the Scientific Advisory Board of noPILLS too.
In Germany, HealthCare participates in the “Risk Management of Emerging Compounds and Pathogens in the Water Cycle” (RISKWA) initiative sponsored by the German Ministry for Education and Research. HealthCare is a member of the steering committee.
In line with the statutory requirements, strict quality standards apply to all Animal Health product classes. Safety and quality standards comparable to those governing human medicine apply for veterinary pharmaceuticals such as parasiticides, anthelmintics or antibiotics. Within the scope of the approval procedures, Animal Health carries out studies in order to minimize the environmental impact of the products’ use.
We train veterinarians, farmers and private users in the responsible use of our products. In this context, we also support the European Platform for the Responsible Use of Medicines in Animals, which brings together various partner organizations from politics, industry and society.
Safety is the top priority with products from CropScience. We analyze already prior to the development of a product whether the envisaged solution is compatible with our sustainability approach. During the development phase, we examine the products in stringent tests that are monitored by the authorities. At issue here are an active ingredient’s toxicological properties on the one hand and on the other hand the question of how significant the remaining trace amount of a crop protection product is following proper application to the plants. Before a product is introduced to the market, we conduct numerous further safety tests with regard to its use and environmental behavior, depending on the product area.
CropScience allowed the sale of all remaining WHO Class I insecticide formulations for leaf and soil applications and seed treatments to expire at the end of 2012. All insecticides affected were replaced by modern, targeted and more environmentally friendly formulations.
CropScience observes the International Code of Conduct on the Distribution and Use of Pesticides of the United Nations Food and Agriculture Organization (FAO). The principles of this code cover the entire life cycle of a product, from its development to its application and beyond. We implement all major aspects of responsible product handling in our Product Stewardship Program, which is based on the principles of our Product Stewardship Policy.
Even beyond its core business, CropScience participates specifically in projects aimed at added product stewardship. We are a member of the Better Sugarcane Initiative, which works to promote sustainable sugarcane cultivation in Brazil, and the International Sustainability & Carbon Certification organization, which is working to establish a system for certifying biomass and bioenergy. We also take part in the Round Table for Responsible Soy, which works to promote sustainable soybean production, as well as in the Round Table for Sustainable Palm Oil Production, an organization that promotes sustainable cultivation methods for the production of palm oil.
Responsibility for customers and partners
The application of crop protection products requires the greatest possible care. Supporting our customers and partners in the proper and safe handling of the products is therefore a focus of product stewardship at CropScience. We address farmers and dealers particularly through numerous programs worldwide. Targeted workshops are aimed at enabling effective application of our products and ensuring the safety of users, the environment and consumers. Furthermore, we provide our customers with handbooks explaining the safe use, storage and disposal of all of our products.
CropScience concentrated its training activities in 2013 on the Asia and Latin America regions. In India, for example, the subgroup has been organizing general training and information events, through which 600 farmers receive training in good agricultural practice. They learn how they can enhance the growth of their produce, use crop protection products effectively and safely, and thus increase the quality of the goods they produce. The smallholders are also shown new ways of marketing their products and thus increasing their profits.
Promoting agricultural development is often a more effective way to fight hunger and poverty than other forms of support. Higher incomes in turn enable farmers in countries such as India to improve their standard of living and invest more in their children’s education and their own businesses. Value is created for society as a result of the increased production of high-quality food. With these measures, we contribute to sustainable agricultural development.
In Latin America, we combined all our activities dealing with product safety measures within our AgroVida program. This comprises various initiatives with which we have been continuously increasing the farmers’ safety awareness and specialist expertise since the 1990s. Safety training offerings for farmers play a role here, for example. In 2013 we trained some 20,000 farmers in the Andean region and approximately 3,700 farmers in the Central America and Caribbean region (excluding Mexico). We also carried out safety training measures in numerous African countries in 2013.
Bayer supports industry’s efforts in various countries to establish a cross-company waste disposal concept for used packaging and containers. In anticipation of such a solution, Bayer also established its own disposal systems.
In the area of water pollution control, we offer customers a biological purification system, Phytobac™. This is intended to prevent the discontinuous discharge of crop protection active ingredients in the disposal of residual liquids that are generated during the filling and cleaning of spraying devices. In Europe, there are already around 2,500 Phytobac™ facilities. It is planned to introduce this system in Asia and Latin America as well.
Furthermore, we also work to improve technical solutions to minimize risks associated with the use of our products: in Europe, for example, we drove forward the optimization of sowing machines to provide better protection for users and the environment. The goal here was primarily to restrict the spread of dust.
The company’s range of continuing education programs for product stewardship is rounded out by internal employee training measures. Our aforementioned Product Stewardship Policy also provides information on all principles for the responsible handling of our products, combined with specific instructions for use for our employees and those who work with our products.
Crop protection products that benefit farmers, consumers and the environment are necessary to safeguard the nutrition of a growing world population both now and in the future. At the same time, it is essential to protect the pollinators that contribute to a wide variety of healthy foods. In 2013 the debate surrounding the use of certain neonicotinoid crop protection products and the subjective assessment of their impact on bee health had an effect at the political level. As a result, the European Commission restricted the use of a number of products in this active ingredient class for certain applications in Europe. Bayer considers the decision by the European Commission to be scientifically unjustified and legally flawed. The active ingredients in question were extensively examined with regard to their impact on bee health already during the approval procedure. Bayer has appealed the decision by the European Commission in order to ensure legal certainty for approval procedures. Bayer continues to work on behalf of bee health and the responsible use of crop protection products. Within the context of its product stewardship, the company invests in research to minimize the effects of crop protection products on honey bees.
In 2012 Bayer launched a worldwide bee care program to promote a better understanding of the many factors that can impact bee health. This program included the construction of the first Bayer Bee Care Center at the site of CropScience and HealthCare’s Animal Health Division in Monheim, Germany. CropScience’s center in Monheim, which opened in June 2012, combines Bayer’s extensive knowledge and expertise in bee health under one roof. It also serves as a platform for dialogue with stakeholders who share our interest in promoting bee health worldwide. Following the success of this facility, a second Bayer Bee Care Center will open in 2014 that will deal specifically with bee health issues in North America. The North America center will be located at the U.S. headquarters of CropScience at Research Triangle Park near Raleigh, North Carolina, United States, and will bring together important technological, scientific and academic resources.
There is broad consensus among scientists who work in the area of bee health that the spread of the difficult-to-combat Varroa mite presents the main risk to bee health, partly because this pest transmits numerous viral diseases to bees. The Animal Health Division of HealthCare is working with researchers at the Institute for Apiculture in Oberursel, Germany, to develop the Varroa gate – an innovative way to control Varroa mites that is intended to keep this parasite from infesting beehives. However, another important factor that can impact bee health is generally more intensive agriculture in some regions, which limits suitable food sources for bees and breeding places for wild bees.
In addition to the focus on bee health, we assign importance to the product stewardship measures we are developing to accompany the use of our crop protection products. These initiatives include a new conveyor technology in the United States for sowing machines that reduces friction and thus promotes the even flow of seed; the additional labeling of seed sacks; two new technologies developed in Europe to treat exhaust air during sowing; and new, even more stringent quality control standards for seed dressing.
We have also launched an extensive bee monitoring program that is being implemented in five European countries (France, the United Kingdom, Germany, Hungary and Poland). The tests are carried out on winter canola, a crop that is very attractive for bees and is generally treated with neonicotinoid seed dressings. The monitoring includes a scientific study led by an independent research institute that will be implemented at various sites in the above countries and will begin with the sowing of the winter canola in summer 2014. In addition, to illustrate the monitoring activities a network of agricultural demonstration plants is being established in these countries that will come into play in spring 2014. These activities are scheduled to take two to three years.
CropScience remains convinced that neonicotinoids are safe for bees if they are used responsibly and properly. Our view is supported by the analysis of monitoring studies that were carried out by independent institutes in addition to the studies generated in extensive approval procedures. The current findings and many years of safe application of these products in agricultural practice confirm the results of the risk assessments performed by the E.U. member states’ regulatory authorities on neonicotinoid seed dressings. These results state that the products are harmless to bee colonies provided they are used according to the product information. We initiated the above additional monitoring study independently of the numerous scientific studies that confirm the safety of neonicotinoids.
The products of MaterialScience satisfy the most stringent of safety requirements. This applies not just to those substances subject to standard review in accordance with the European REACH regulation. Within the context of the voluntary Global Product Strategy (GPS) of the chemical industry, we also assess the substances we use and reduce potential health and environmental risks that could result from our chemicals. The product safety assessments apply to the entire life cycle of a product – from research and procurement through production and logistics to application, disposal and recycling. Our product stewardship does not just end with our company, but also includes suppliers, customers and partners. GPS is accessible at MaterialScience through the “Product Safety First” internet portal, and has been available worldwide in seven languages since 2013. Through this website, we inform customers and other interest groups about our activities and product safety assessments.
A product safety assessment at MaterialScience takes place in several steps: first, chemicals that are subject to statutory regulations are identified and the corresponding laws compiled. Their risk potential is then examined so as to provide a basis for the effective minimization of risks. Such steps can include proposals for technical measures such as protective clothing, or marketing restrictions. Finally, we produce the legally required material safety data sheets, technical information sheets and labeling for the chemicals.
For especially important products such as MDI, TDI, polycarbonate and polyether, MaterialScience additionally works with associations to draw up environmental product declarations and eco-balances certified according to ISO 14040 and 14044 and based on industry averages.
With regard to substances that come into direct contact with food, MaterialScience is following the scientific discussion about the chemical Bisphenol A (BPA), a feedstock for various plastics. Critics are concerned that health risks could result for users if traces of BPA are released from polymers. As documented by numerous scientifically valid studies, we are convinced that the safety of BPA is ensured in its existing areas of application. This assessment is consistent with evaluations by the responsible regulatory authorities in Europe, the United States, Australia, Japan and other countries. In cooperation with the PlasticsEurope association, we work to make the discussion more objective through being based on scientific analysis.
MaterialScience discontinued its work on carbon nanotubes (CNTs) in 2013 due to strategic considerations. Researchers from MaterialScience had collaborated with external partners in recent years to resolve complex issues related to the safe production of specific carbon nanotubes. Much of the knowledge gleaned has already been made available to other companies and research institutions within the Innovation Alliance for Carbon Nanotubes (Inno.CNT).