Chiesi

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Leadership

Chiesi – “We ACT” C

hiesi is a privately owned Italian pharmaceutical company, founded in Parma Italy in 1935, where the HQ is currently based. The Chiesi Group has approximately 6’400 employees, 30 Affiliates and product sales in approximately 90 countries.

Committed to pushing the boundaries Chiesi invested 22% of its revenues into R&D in 2020. Starting from 2017 Chiesi launched group impacting actions in sustainability across the business and in 2018 subsequently changed its status to become a Benefit Corporation adopting a new legal form under the Italian and US Law. In 2019 Chiesi’s commitments paid off as they became the largest global pharmaceutical group to be awarded B Corp Certification, a recognition of high social and

environmental standards. Following this the “We ACT - We Actively Care for Tomorrow” program was launched as an expression of Chiesi’s desire to take care of society and the environment in an effective way for the benefit of both stakeholders and the company.

Chiesi takes its role as a key corporate citizen seriously and has set itself the challenge of becoming carbon neutral (Scope 3 included) by 2035 as one of many targets.

Chiesi’s procurement function is a key catalyst in driving the continued social and sustainability efforts of the business. Guido D’Agostino as Head of Global Procurement discusses the journey so far, outlines the ambitions, and highlights the importance of supplier collaboration.

The Business Profile

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Leadership

MEGGLE has it.

MEGGLE’s alpha-lactose monohydrate qualities for dry powder inhalation where lactose plays a predominant role as carrier for

THE RIGHT LACTOSE PRODUCT FOR DRY POWDER INHALATION Inhalation aerosols offer the potential for needle-free systemic delivery of small molecule drugs as well as therapeutic peptides and proteins. An industry standard in dry powder inhalation formulation development, lactose monohydrate is used safely in DPI formulations. Using lactose as an excipient not only improves performance efficiency of the inhaler, but also facilitates powder handling during production. Effective performance of a dry powder inhaler largely depends on the carrier material used for the drug formulation.

the active pharmaceutical ingredient (API) facilitating its delivery to the lower part of lung.

InhaLac® sieved

OUR SERVICE: CUSTOMIZED LACTOSE FOR DPI As DPI development is an interplay between inhalation device, API-properties and lactose carrier, a customized lactose which is tailored in particle size distribution, and surface property, may provide a competitive advantage, when the DPI-drug-development can be achieved in 400 µm 400 µm fine 400 µm and on target. Especially time increasing the API’s particle fraction (FPF) through profound lactose carrier InhaLac® 120 InhaLac® 160 InhaLac® 70 design and subsequently suffering less API loss can Particle size distribution Particle size distribution Particle size distribution be a major improvement and marks successful drug LACTOSE: CARRIER OF API x 70 – 105 µm x 55 – 85 µm x 110 – 160 µm commercialization.

Customization has been seen for MEGGLE products, µm x 110 – 155 µm x 90 – 120 µm x 180 – 250 125 – 165 µm and µm x 160 – 215 MEGGLE has been active µm in this field forxdecades, traditionally used for the oral route of administration but is x 270 – 340 Density Density therefore has gained a tremendous amount Density of expertise, especially important when it comes to the inhalation routebulk 0.57 – 0.70 bulk 0.67 – 0.77 g/ml bulk 0.63 – 0.76 g/ml g/ml which the customer immediately benefits from. of administration, in particular dry powder inhaler (DPI), 10

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10

50

50

50

90

90

90

Meggle Dry Powder Inhalation or Just Dry Powder Inhalation

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MEGGLE’s alpha-lactose monohydrate qualities for dry powder inhalation

InhaLac® sieved

IN HA LAC

Hi Guido, you were appointed as head of global procurement in May 2020 having been with the business since 2007. During this time, your role has evolved. Can you provide an insight into your journey with the business?

I joined Chiesi in 2007 starting as an industrial buyer within Chiesi Global Manufacturing Division following a four-year period with Pfizer. Initially I oversaw the procurement operations within the pharmaceutical primary packaging and devices environment, where I learned a lot and created an extensive network which I still use today as a base of my daily work. In 2015 I took the responsibility of the direct procurement team, managing strategic relationships for all production materials of the group and for all manufacturing sites. Late 2017 I was appointed Head of Procurement with a

400 µm

400 µm

400 µm

InhaLac® 70

InhaLac® 120

InhaLac® 160

Particle size distribution

Particle size distribution

Particle size distribution

x10 110 – 160 µm

x10 70 – 105 µm

x10 55 – 85 µm

x50 180 – 250 µm

x50 110 – 155 µm

x50 90 – 120 µm

x90 270 – 340 µm

x90 160 – 215 µm

x90 125 – 165 µm

Density

Density

Density

bulk 0.57 – 0.70 g/ml

bulk 0.67 – 0.77 g/ml

bulk 0.63 – 0.76 g/ml

400 µm

400 µm

InhaLac® 230

InhaLac® 251

Particle size distribution

Particle size distribution

x10 30 – 60 µm

x10 7 – 22 µm

x50 70 – 110 µm

x50 40 – 70 µm

x90 110 – 150 µm

x90 80 – 120 µm

Density

Density

bulk 0.66 – 0.76 g/ml

bulk 0.55 – 0.70 g/ml

InhaLac® milled

NEW!

400 µm 400 µm

400 µm

400 µm

InhaLac® 140

InhaLac® 150

InhaLac® 300

Particle size distribution

Particle size distribution

Particle size distribution

x10 3 – 7 µm

x10 1 – 5 µm

x10 2.0 – 3.5 µm

x50 37 – 61 µm

x50 18 – 30 µm

x50 14 – 19 µm

x90 120 – 190 µm

x90 65 – 95 µm

x90 40 – 56 µm

50 µm

50 µm

InhaLac® 400

micronized

Particle size distribution x10 0.8 – 1.6 µm

InhaLac® 500

x50 4.0 – 11.0 µm

Particle size distribution

x90 15.0 – 35.0 µm

x50 ≤ 5 µm

Density

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bulk 0.25 – 0.40 g/ml

x90

≤ 10 µm

MEGGLE GmbH & Co. KG BG Excipients & Technology Megglestrasse 6 –12 83512 Wasserburg Germany Phone +49 8071 73 476 service.pharma@meggle.com www.meggle-pharma.com

Leadership

The Business Profile

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Leadership remit to rearrange the function which proved to be successful and remains the base for today’s procurement operations. From May 2020 the responsibility of procurement became global, we have created a procurement network consisting of a team that represents all Chiesi Affiliates (overall about 70 people) and have begun to centralise strategic partnerships and negotiations. The Chiesi Group managed approximately 16.000 suppliers and a spend of €1.4 billion in 2020.

Why did the role become global? How is the function structured? Having affiliates spread across 30 countries must create many unique challenges.

What are the primary daily challenges you face? Whilst the global nature of your operations can cause challenges, your structure has been implemented to maximise the opportunities. What benefits does the global structure offer the business?

Well, the role became global to generate as much value as possible, and I think this is the key role of all global procurement functions across industries, and also to spread a unique and global approach to our suppliers for sustainability challenges we have and for those we want our suppliers to take.

Managing a global procurement function into a multinational company doesn’t necessarily mean to centralise the

Learn from the past, look at the future, act on the present.

I Q V I A .C O M Copyright © 2021 IQVIA. All rights reserved. IQVIA® is a registered trademark of IQVIA Inc. in the United States, the European Union, and various other countries.

The Business Profile

At IQVIA, more than 70,000 employees work to make a positive difference in global healthcare.

A focus on People, Public and Planet is central to our approach and helps drive our efforts and contributes to our success.

We recognize that our sustainability commitment is critical to the long-term success of our company and is important to all stakeholders, including employees, customers and investors.

Read our Global sustainability reports: https://www.iqvia.com/about-us/corporateresponsibility Our commitment for sustainability in Italy Our building is the first building in Milan to have obtained the Leed Platinum certification, the most widely used green building rating system in the world. It is the gold standard used for evaluating a building’s energy efficiency and

the ability to reduce carbon emissions. LEED is the acronym for Leadership in Energy and Environmental Design and is well established in the United States.

Moreover, all the energy consumed at IQVIA Italia’s headquarters is guaranteed and traced as 100% Italian and clean by our energy supplier.

Since the beginning of 2021, we have also adopted a Green Car Policy whereby the company’s car fleet only includes hybrid or electric models.

We also have an internal working group of ambassadors made up of volunteers belonging to the various business units who work in order to raise awareness and increase the engagement of the entire company population regarding sustainability issues.

IQVIA Italia ForFuture is the name of the Italian IQVIA team contributing to increase the awareness on sustainability impact and shape a better future.

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Leadership statutory purchase in one place serving all the group, we are not there and actually very far from this concept. We believe in investing in local partnerships as much as possible, to generate value close to where each affiliate is placed.

Being global for our procurement means of course attempting to negotiate big deals involving all our global functions that will positively impact the company.

We want to put together the overall Chiesi contractual power to always obtain the best conditions, to create an internal network as a main centre of excellence for negotiation activities, that can also be implemented at a local level. There are many daily challenges.

Of approximately 16’000 suppliers at global level, 370 represent 50% of our total spend, while about 40 represent the 80% of the total. Within our network we have colleagues from all over the world, we have cultural peculiarities and different ways in approaching suppliers and partners. Focusing on strategic suppliers with a unique and global approach is challenging and asking them to follow us on the most critical issues of sustainability can be extremely challenging.

In 2019 Chiesi achieved B-Corp status and in doing so became the largest pharmaceutical company to date to achieve the certification. The desire to become B-Corp certified was driven by the founding Chiesi family and achieved in prompt time. What role did the procurement function play during this process?

Our Global Procurement function played a key role here in the “Community” area that for B Corp’s impact profile is the area involving all topics related to suppliers. We were able to add value to Chiesi’s certification, quickly implementing actions towards

sustainability. For example, we asked our category managers to give business priority to local suppliers, companies where diversity and inclusion has a high level of attention, to introduce sustainability questions into our vendor qualification questionnaire ranking them

with a specific value, to create category plans for new partner selections and tenders where sustainability has a fixed leverage for all the group. We created a brand new “UN SDGs based” code of conduct for our suppliers that we called Code of Interdependence.

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Leadership After a first assessment for the B Corp certification, our actions in procurement gave a positive push to Chiesi’s overall rank, even if a number of actions have just started with deployment over the coming years.

What differences are there between your procurement processes pre and post B-Corp?

Many differences from our Procurement processes pre B Corp, we definitely changed our way of working in all areas.

Economics, quality, and level of service remained key, but we started to innovate also introducing sustainability at the

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The Business Profile

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Leadership same level. For example, we reshaped the vendor qualification interview for our strategic suppliers, introducing deep sustainability questions and attributing real value to these responses.

Separately our annual vendor evaluation exercise now takes into consideration sustainability parameters, we introduced category plans for the whole group for 35 spend categories, introducing fixed and predefined weight for sustainability in tenders and partner selections. As already said, we created a brand new “UN SDGs based” Code of Conduct for our suppliers that we called Code of Interdependence. We launched in mid-2020 an internal audit procedure to start auditing strategic suppliers that

accepted our Code of Interdependence, checking their adherence to it. We have set long term targets for increasing the overall sustainability level of the Chiesi Ecosystem (meaning Chiesi + its strategic suppliers). We have changed the traditional term of supply chain to value chain, considering all related improvement targets: one general target is to facilitate the Carbon Neutrality target of Chiesi in 2035 (Scope 3 included).

Becoming a B- Corp certified business is an evolving process and there is no opportunity to rest on your laurels. The program demands that its partners strive for more. To

LifeBee is a Consulting boutique supporting Life Sciences companies on their path towards digitalization, operational excellence and proactive compliance.

Production & Logistics

Serialization

Laboratories

Quality Assurance

Regulatory

Pharmacovigilance

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LifeBee - Digitalizing Life Sciences

WHAT WE DO LifeBee studies, designs and implements operational strategies, business processes and digital solutions since 2004, supporting Life Science Companies in the innovative, compliant and sustainable realization of their business model. The Key focuses are on GxP regulated areas such as: Production & Logistics, Serialization, Laboratories, Quality Assurance, Regulatory and Pharmacovigilance.

HOW WE MANAGE In Consulting, LifeBee provides Process Optimization, Digital Innovation, GxP Compliance & Data Integrity and 4.0 Strategic Plans.

In Digitalization, LifeBee offers Services and Solutions: Feasibility Studies, Vendor Selections, Project Management and the realization and support of Digital Solutions based on marketleading software.

OUR PEOPLE LifeBee consists of: 50+ professionals with 12 years average work experience within the Life Sciences, 70+ customers and 650+ successful projects.

OUR PURPOSE Leveraging corporate values such as Integrity, Integration, Invention, Insight LifeBee aims to daily contribute to a healthier and safer world. We pursue such in every action we take and in our “LifeBee for Life” Customer Social Responsibility programs which support a more sustainable world, childhood health and cultural heritage.

LifeBee Digitalizing Life Sciences: Milan & Lugano (Italy - Switzerland) www.lifebee.eu

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Leadership be successful it is imperative that your supply chain can meet the sustainability requirements and quality you require. How important have strategic supplier relations been during your evolution? How have you engaged your suppliers on this subject? What plans to do you have to develop strategic engagements throughout the top tier of suppliers?

That’s correct, B Corp certification must be reobtained every three years, and each time your performance must be better than previous certification.

The B Corp certification interview evolves becoming more challenging itself, Chiesi has been certified in 2019 based on revision 5, but since then B Corp have issued version 6 and this will be the version we will use for our re submission in 2022 where a number of new and challenging topics on suppliers have been inserted.

We are at the very beginning of our journey with suppliers, we have firstly engaged our key strategic partners in 2019 with a direct involvement on drafting our Code of Interdependence, where they contributed directly as we collaboratively developed key topics. The Code is challenging, it contains mandatory requirements and improvement actions. All mandatory requirements must be respected by our suppliers (and Chiesi of course), the improvement actions can give more value to our judgement. The code is dynamic, we wrote that into its design principles, meaning that we plan to update the code every single time we

The Business Profile

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Bespak by Recipharm – proud partners of Chiesi Farmaceutici www.BespakByRecipharm.com

Bespak by Recipharm delivers market leading design, development and manufacture of drug delivery devices to the global pharmaceutical market. This includes inhaler, nasal technologies and auto-injectors as well as development and manufacturing services. Recipharm is at the leading edge of drug delivery device innovation. Driven by customer and patient demand, our innovations have the potential to create new treatments and opportunities across the globe as well as accelerating routes to market.

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Koura

y l p p u S – a r u Ko s i s e h t n y S n i Cha K

oura derives from the word courage, and courage, planning, belief, and agility, was exactly what Koura would require to navigate the challenges ahead.

As a world-renowned provider of medical grade propellants Koura’s capabilities would be tested like never before during the Covid-19 pandemic.

In particular for their Zephex® propellant, which is used in the treatment of respiratory conditions that saw a huge increase in global demand.

Janet Sankey, UK Site Janet Sankey Manager, discusses how Koura’s prudent approach enabled operations and supply to continue with no obvious issues.

To our customers it would look like business as usual as the full effects Janet, as Covid started causing of the pandemic started to take hold, significant disruption throughout your and that is down to our contingency operations and supply chain what planning, but we had to act swiftly. initial steps were taken to ensure We operate a 24/7 operation, so we supply was uninterrupted? enacted our plans and as we term it put

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a ‘ring of steel’ around individuals that had to be onsite to be able to produce our products and that was very key right from the outset. This meant no visitors – unless they were essential, no work – unless it was essential.

Everybody had a very focused mindset

which was to keep safe, look after our employees and deliver the products that we know was essential for fighting Covid.

It was a difficult undertaking, achieved by a combination of planning and communication, enhanced IT provision 23

Koura

and a skilled workforce pulling together.

We also reduced the number of employees onsite to accommodate the Covid protocols of social distancing but as Covid spread, the demand for Zephex® rapidly increased, which posed a huge challenge but despite this we were able to increase production in response to the increased demand for Zephex®.

With the reduction of staff, you were still able to meet the increase demand for Zephex® and reach record production levels. What would

you say were the main attributes to achieving this feat?

Despite the reduction in staffing levels the team are acutely aware of our responsibilities in delivering to our customers as lives do depend on our product. This was brought into focus during the pandemic, and it focuses the mind knowing that the product can help those who are suffering from Covid.

Great teamwork and communications with inter-departmental collaboration across the business, from production to supply chain, really helping deliver

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an essential product to our customers globally.

Global supply chain, global processes, global clients. What have you learnt about your supply chain function during the pandemic?

Keeping a global supply chain moving smoothly at the best of times requires agility and we saw great examples of that during 2020 and the pandemic with close collaboration with logistic partners in making sure alternative delivery options where available as

borders and ports started to close.

What do you believe your clients have learnt about Koura?

Close communication with customers is essential and none more so than during the pandemic as we worked together to manage the increase in product demands and navigated around the usual supply chain network being disrupted. I believe our customers see the team at Koura as a key partner, standing by them in a crisis and working together to ensure a key product continues to be delivered.

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Leadership want to increase the sustainability bar internally and with our suppliers. Now we are launching a project review for the code that will deliver a new version by the end of 2021. So, our strategic partners were really key for such a project, participating with us directly in developing the code clauses. Starting from mid-2021 we will launch what we call ‘engagement plans’, specifically for some impacting categories of spend and for our high spending partners.

These plans will be highly customised to our partners and directly related to the Chiesi Code of Interdependence clauses and SDGs. We will ask suppliers to increase activities in areas where they are performing lower than

expected, focusing on CO2 emissions mapping, gradually reducing and potentially deleting or offsetting. We are now designing the engagement plans but we expect most of our suppliers will follow us at best, otherwise where possible we will have to find alternatives to facilitate our long-term sustainability targets.

During the process of becoming B-Corp certified what did you learn most about your procurement function?

I mostly learned that the procurement function, differently from all other company functions, has a sensible external responsibility in changing things, in making a better world, in helping the environment and the

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Leadership people to improve. Procurement professionals can spread exponentially the sustainability “call to action” to all suppliers but also to the suppliers of our suppliers (Tier 2 Supplier), and so on. This is massively impacting especially on local and small companies. In the long run only responsible and sustainable companies will survive, this will have to be the common approach, sooner is better. In becoming a B Corp I mostly learned that procurement must be organized to give high evidence to sustainable requirements to its suppliers, the target must be clear even if gradual. A responsible company must have only suppliers with high

performances in sustainability.

The business is continuing to push the boundaries and seeking more. What specific targets does the procurement function have and what would your foresee as the primary challenges to meeting these?

There is a race to zero in many industries, and this is absolutely good for all, for the business but of course for the people and for the planet.

The issue is that in reality only a few companies are ready to start now, even with progressive targets, but unfortunately the majority remain linked to the traditional and old-style ways of business. I personally believe for the business there is no other

FROM MORE THAN 70 YEARS BETWEEN INNOVATION AND SUSTAINABILITY FOR A FUTURE OF EXCELLENCE Arca Etichette, as a Benefit Corporation, aims to have a positive impact on society and the biosphere for the creation of shared value: promotes, with both its divisions, the development of ecological packaging solutions adopts sustainable environmental management systems prevents any form of pollution, limiting the consumption of energy resources carries out projects and actions for the social sustainability of its employees and the context in which it operates possesses eco-sustainability certifications to guarantee its stakeholders (employees, business partners, local community)

OUR 2021 GOAL IS TO BECOME A BCORP COMPANY TO BEING PART OF A NEW SUSTAINABLE ECONOMY

ARCA ETICHETTE S.P.A. SOCIETÀ BENEFIT SELF-ADHESIVE LABELS AND SLEEVES, LABELING AND IDENTIFICATION SYSTEMS www.arcaetichette.it

www.arcalabelingmarking.com

www.arcagroup.net

The Business Profile

way than becoming zero impacting or carbon neutral, sooner is better, but this can only be a concrete target if it is a shareholders’ target, otherwise it risks being unfeasible. The companies who will reach such targets first will benefit from a business and image standpoint.

For those who are not focused on such direction, this is actually an obvious management oversight. The primary challenge for procurement departments is, or will be, asking their strategic suppliers to invest in being neutral or zero impacting as soon as possible.

For many the last 12 months have been extremely challenging. During this dreadful time of the covid pandemic

what have you learnt about your business/function?

During 2020 I learned procurement can really be a strategic function for the whole organization. Many companies are elevating the function from an organizational standpoint and this is becoming key every day. Since the start of the pandemic up until Q3 2020, we were able to implement daily assessment with suppliers, both on direct and indirect procurement activities, individuating in advance any areas of risk. We did not stop internal production for even one day. We adapted our internal processes and procedures to quickly find solutions moving to continue the constant delivery of drugs to our patients all over the world.

FROM INNOV FOR A

SELF-ADHESIVE LABELS & MORE FOR PHARMACEUTICAL INDUSTRY Who is Arca Etichette?

Arca Etichette for decades has been a solution provider, specialist in the production of labels and self-adhesive solutions, sleeves and technology for labelling, tracking and marking.

How much does the pharmaceutical industry impact us?

About 40% business volume of Arca Etichette is made with the drug market, for this reason the specialization towards this sector is very high.

Arca’s Technical Department is the beating heart of the company, which identifies the most suitable materials for each application, even for the labelling of medicinal packaging.

Which facilities do we offer in pharmaceutical production?

1. Material and process design to better match customers’ requirements 2. Wide range of Eco/bio materials 3. Eco printing process for a better sustainability 4. Innovative and security solutions (i.e. anti-counterfeiting, track&trace, serialization with Ouvert or Couvert codes) 5. Dedicated production and anti-mix-up procedures, GMP compliant

6. Accurate documentation Arca Etichette, a to have a positiv 7. Process change procedures the biosphere for 8. 100% video inspection defect controls at any production promotes, with bo of ecological packa step adopts sustainable systems

What is our self-adhesive label portfolio for prevents any form of consumption of energy pharmaceutical sector? carries out projects and • For the decoration of any pack sustainability of its empl which it operates • “No label look” clear labels possesses eco-sustainabi • Braille printing to guarantee its stakeholde business partners, local com • Hooks for suspended “infusion” products (Flebo Labels) • Booklet labels OUR 2021 GOAL IS TO BECO • Wrap-around labels for small diameter vials AR • Peel-off labels SELF-ADHESIVE LABEL • Tamper-proof Wipe-Out® and void labels for tamper www.arcaetich evidence • “Child-Resistant/Senior-Friendly” blister pack labels • Self-adhesive shrink sleeves for permanent decoration and sealing Not only labels!

The Systems Division of Arca Etichette produces cuttingedge labelling machines specifically designed to be installed in production lines dedicated to pharmaceutical production.

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