Quality

As consumers and governments are raising the quality bar, quality is becoming a real competitive parameter.

Today's healthcare consumers are demanding; they know good quality from poor, and they expect the best for themselves and their loved ones. People living with a chronic condition expect outstanding quality from the products that they use every day over a lifetime. When product safety is called into question, as it was in some cases in 2005 in which products were withdrawn from the market, it leads to a general mistrust from consumers and raises awareness of the need for vigilance on quality matters. Such industry events clearly illustrate how investors see financial and reputational damages as interrelated, as witnessed by dramatic decreases in the market value of the company in question.

Governments are getting increasingly vigilant about ensuring that healthcare products live up to high quality standards in order to protect the safety of consumers and the interests of society. More regulation and monitoring of product safety are being introduced worldwide through, among other things, inspections to ensure that facilities employ Good Manufacturing Practice (GMP).

In pharmaceutical production, quality is paramount, and any incidents where patients' lives are at risk will imply major reputational risks as well as risks of costly compensation payments in the event of product liability claims.

Novo Nordisk puts quality front and centre. And even more so after the establishment of Quality Mindset as a fundamental in the Novo Nordisk Way of Management: 'Everyone must continuously improve the quality of their work.'

The commitment to quality is outlined in the Novo Nordisk Way of Management and the Quality Policy. Quality is defined as meeting the expectations and needs of customers and society. The quality management system, including audits, ensures continuous improvements and optimal use of internal standardisation.

As a pharmaceutical company that markets its products worldwide, Novo Nordisk must adhere to national and international requirements for products and production. The American Food and Drug Administration (FDA) sets the global standard with which Novo Nordisk complies.

Novo Nordisk does not have specific policies regarding consumer privacy.

The focus on quality across the organisation is being integrated through a Quality Mindset that encourages all employees to work across organisational boundaries and share learnings. Some 14,000 separate quality action plans are consistently tracked. There has been a significant improvement in timely adverse event reporting, and customer surveys indicate an improvement in the level of customer satisfaction.

Overall, Novo Nordisk follows a 'cut-no-corners' philosophy in the way that new products are developed and improved. Quality is part of the way we build on core competences and knowledge. For example, customers' suggestions for improvement were instrumental in the development of the NovoPen® insulin device product line, which celebrated its 20th anniversary in 2005 with the newest generation pen, NovoPen® 4.

The quality management system also describes procedures, management systems and compliance mechanisms related to product information and labelling. This also follows FDA regulations.

Regulatory Affairs is responsible for ensuring regulatory license for current and future products responsive to Novo Nordisk's worldwide business needs. Its task is to minimise time to marketing authorisation while ensuring compliance. To that end, interaction with key agencies and other critical stakeholders is part of the mandate, as is understanding and communicating relevant legislation to its customers and partners. The proper conduct of regulatory affairs activities has considerable economic importance for Novo Nordisk.

Quality is also closely linked with managing risk. Any incidents where patients' well-being or lives are at risk will imply major reputational risks as well as risks of costly compensation payments in the event of product liability claims. If the company were faced with a global product recall, it would at the same time be at risk of losing its marketing authorisation, there would be substantial financial losses, and it would negatively impact the inventory situation. See risk matrix.

Novo Nordisk is in compliance with regulatory demands, even in light of an increasing number of inspections, and averages approximately 50 inspections per year. None of the inspections in 2005 revealed any major non-compliance with regulations concerning customer health and safety.

Novo Nordisk did not receive any complaints or warning letters from the FDA in 2005.

In fact, the US Food and Drug Administration is using the Novo Nordisk insulin production facilities in Clayton, North Carolina, US, as a better-practice training site for its inspectors. Novo Nordisk requires the same GMP standards wherever it operates in the world.

In 2005 Novo Nordisk had one case of non-compliance with regulations concerning product information and labelling. This case was from Belgium, where changes to the package insert with one of its HRT products, Vagifem®, had not been made on time. The case was handled by the Recall Committee and is now closed. Product batches for the wrong insert were recalled, and new deliveries were made with correct inserts. No penalties or fines were associated with this.

Any breaches of advertising and marketing regulations with significant impacts are reported to Corporate Legal. The risk monitoring process monitors such incidents. Novo Nordisk does not consolidate at corporate level the records of such breaches in local markets, but such records are kept by local management for the regulatory authorities to inspect.

The same procedure applies to complaints regarding breaches of consumer privacy.

While gross risk is very high, this is an example of how mitigation actions can significantly reduce the net risk to the company. Novo Nordisk has a range of quality systems in place, including internal quality audits and monitoring of complaints and safety data.

Novo Nordisk has also introduced cLEAN®, the Novo Nordisk version of the LEAN production philosophy which auto manufacturer Toyota has used with great success. (The 'c' refers to 'current').

cLEAN® is a way of thinking, a production philosophy and a new and smarter work culture that seeks to reduce any kind of 'waste' in the work processes, be it ideas not realised, inefficient work routines or costs. It is being implemented throughout Product Supply, including production facilities, laboratories, support functions and administrative units. Its goal is optimisation throughout the supply chain by shortening lead times and focusing on zero defects, simplicity and continuous improvement.

There are numerous examples of where cLEAN® has had positive results. For example, the Novo Nordisk Complaint Center reduced the turnaround time from 20 calendar days to only two working days through a special office where employees could handle complaints undisturbed. Increased productivity in insulin production means that Novo Nordisk affiliates rarely face shortages of product. Solving a bottleneck in the dispensing unit on the filling line at the Clayton facility reduced downtime by 93%. At the Chartres production facility, technicians carry out maintenance on machines while their colleagues are at lunch so that no time is wasted.

See an overview of voluntary code compliance, product labels or awards with respect to social and/or environmental responsibility that Novo Nordisk is qualified to use or has received.

This page has been assessed by PricewaterhouseCoopers as part of its assessment of Novo Nordisk’s statement that it reports ‘in accordance’ with GRI. Please refer to Audit and assurance for a full description of the nature of assurance offered.