Genzyme’s Csr Initiative: Project Decisions

Genzyme’s CSR initiative: Project Decisions

Marissa McArdle

MAN4602 Global Business Operations

Florida Atlantic University 

Introduction:

Genzyme must connect its humanitarian programs with its profit-generating strategy in order to ensure its CSR decisions give maximum benefit for shareholders and stakeholders. Because of the HAND initiative’s scare resources, an optimal organizational structure must be employed.

Company Background:

Genzyme, one of the world’s leading biotechnology companies, has come very far since its start in 1981 as a supplier of basic chemicals and reagents. Known for its development of orphan drugs, like Cerezyme, Genzyme earned revenues close to $4 billion in 2007. Because research on orphan diseases is scarce, developing therapies is extremely costly. Many patients suffering from these diseases cannot afford their cure. With a corporate value of putting patients first, Genzyme relies on government agencies to bear the cost for citizens and purchase the medication for these rare diseases.

HAND Program:

Genzyme has launched a CSR initiative called Humanitarian Assistance for Neglected Diseases. The HAND program is dedicated to finding and advancing novel treatments for neglected diseases, like Malaria, Chagas and Tuberculosis. It will not “seek to profit from the commercialization of any products it helps to develop”. Even though this project will not earn profit, it will still be a competitive resource and maximize value for Genzyme’s stakeholders. According to Henry Termeer, the CEO of Genzyme, in the long run, government agencies “are not comfortable engaging on the basis of cold commerce alone” (p.5). HAND initiative is a way for Genzyme to not only help those in need but also enhance its image as a corporation who puts patients above profits. Malaria, Chagas/Sleeping sickness, and Tuberculosis are the three neglected diseases that are currently of interest under the HAND initiative.

Problem:

In attempts to make the HAND program a success, Genzyme has taken on more than it can handle. Invested in too many projects and partnerships, HANDs resources have been stretched thin and Genzyme must decide which neglected disease(s) to allocate its scarce resource to that will meet the CSR initiative’s criteria.

Project Selection Criteria (p.19)

*Important unmet medical need, ideally classified by the WHO as a neglected disease

*Medically effective product profile, ideally inexpensive

*Evidence-based scientific rationale, ideally with a well defined development plan