Procurement

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Basic Policy

The Otsuka group, together with its business partners, aims to contribute to the building of a sustainable society by promoting sustainable procurement that takes into consideration factors such as legal and regulatory compliance, the environment, and the respect of human rights.

Approach

Across the entire value chain, the Otsuka group engages in business activities that are safe, reliable, socially acceptable, and in compliance with laws and regulations. When commencing transactions with a supplier, we perform screening and checks to ensure the quality of raw materials and to guarantee stable procurement. We also conclude a basic transaction agreement. In the case of a new supplier, transactions are determined only after we have carried out due diligence.
We aim for mutually sustainable development through fair, equitable and transparent procurement and the establishment of healthy relationships with business collaborators. To further these efforts, in 2020 we updated the Otsuka Group Procurement Policy, which takes into account factors such as human rights, labor issues, the environment and anti-corruption measures, and formulated the Otsuka Group Sustainable Procurement Guidelines, which provide more specific descriptions of the provisions of the above policy. Both are shared with all business partners.
In order to ensure a stable supply of products, we perform advance risk assessments on key raw materials to clarify the nature of potential risks so that we can take countermeasures. We also make sure to source raw materials from multiple companies, in principle.

Otsuka Group Procurement Policy

The Otsuka group of companies, in accordance with our corporate vision, “Otsuka-people creating new products for better health worldwide”, and international norms, conducts procurement activities in a responsible way. Otsuka delivers innovative, safe, secure, and high-quality products in order to contribute to the construction and maintenance of a sustainable society, as well as to the health of people around the world.

  1. Relationships with suppliers
    As a collaborator with many suppliers, the Otsuka group aims to build good relationships for mutual sustainable development through shared understanding, based on a fair exchange of appropriate information and opinions.
  2. Supplier selection
    The Otsuka group selects suppliers in a fair, and transparent manner based on comprehensive assessments of supplier quality, costs, quantity, delivery terms, compliance with laws and regulations, promotion of environment preservation, etc..
  3. Responsibilities toward society
    For the realization of sustainable society, the Otsuka group strives to maintain procurement activities that reflect consideration for human rights, labor, the environment, and non-tolerance of corruption.
  4. Compliance
    The Otsuka group of companies observes all applicable laws and rules, and all Otsuka employees and supplier employees must act at all times with the highest level of ethics, consistent with social norms.

Otsuka Holdings Co., Ltd.
September, 2020

Initiatives for Promoting Sustainable Procurement

As part of the Otsuka group's efforts to promote sustainable procurement, the Otsuka Sustainable Procurement Task Force, made up of Otsuka Holdings and five group companies,* was formed in 2019. The task force members are taking steps to promote the group's overall sustainable procurement, including revision of the Otsuka Group Procurement Policy, formulation of sustainable procurement guidelines, and conducting a sustainable procurement self-assessment questionnaire (SAQ) and presentations for business partners.
We began presentations to business partners to share the details of the Otsuka Group Procurement Policy in 2020, and 73 companies participated in the first year.
We also conduct the common SAQ prepared by Global Compact Network Japan, and provide feedback to relevant companies. As of the end of 2020, we have received questionnaire responses from 80 companies.

*Otsuka Pharmaceutical, Otsuka Pharmaceutical Factory, Taiho Pharmaceutical, Otsuka Chemical, and Otsuka Foods (Otsuka Packaging Industries, Otsuka Techno and EN Otsuka Pharmaceutical were added in March 2021.)

A Strong Supply Chain Department Network

Otsuka Pharmaceutical established the Global Supply Chain Committee (GSCC) in 2017 to resolve important production and supply-related issues, including supply and demand coordination of drugs such as anti-cancer agents, orphan drugs and tuberculosis drugs, and the stable distribution of pharmaceuticals in the global market. Otsuka Pharmaceutical and overseas subsidiaries are cooperating to address these issues.

Joint Business Partner Audit by Pharmaceutical Companies

In the Otsuka group, four pharmaceutical companies* conduct joint business partner audits for shared suppliers of raw materials. We began these audits in 2016, applying proprietary methodologies that include an auditor skills training program.

*Otsuka Pharmaceutical, Otsuka Pharmaceutical Factory, Taiho Pharmaceutical, and EN Otsuka Pharmaceutical

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