Evaluation and Management of the Supply Chain

With the aim of promoting responsible procurement, Santen will ensure supply chain management and monitor its business partners to eliminate risks, including that of sparking boycott movements against the Group, and promote responsible procurement to improve the corporate value of our business partners and our company.

CSR Procurement Policy and Guidelines

With the aim of promoting CSR procurement to enable us to contribute to the development of a sustainable society by fulfilling our social responsibilities in cooperation with our business partners, Santen has established a CSR Procurement Policy, and formulated the Santen Group CSR Procurement Guidelines, which define the rules the Group’s business partners are advised to comply with in order to promote CSR procurement.

Business Partners Assessment

Santen distributes a CSR Procurement Policy and Guidelines, as well as a Guidelines Compliance Questionnaire to suppliers to check the status of progress in their measures to comply with the Group’s CSR Procurement Policy and Guidelines. In FY2020, we requested confirmation to all 129 primary business partners involved in product supply, and received responses from more than 90% of business partners. From the answer results, there were no serious problems. Going forward, we will conduct a CSR survey at the start of new transactions and every three years for existing customers. In 2021, we will continue to confirm with manufactures including secondary customers. If any suppliers have not yet become compliant with our Guidelines, we encourage their efforts to do so. We will thus promote responsible procurement to improve the corporate values of our business partners and our company.

Risk Management on Supply Chain

To continue steadily supplying our products even if our supply chain faces various risks, including those of accidents, natural disasters, and climate change, Santen implements various measures for risk management throughout our supply chain, such as building a backup system with multiple plants and procuring raw materials from multiple suppliers.

Supplier-related sustainability risks in the stable supply of pharmaceuticals are primarily interruptions in the supply of raw materials from critical suppliers. For example, suppliers may be subject to production discontinuation orders from regulatory authorities due to deviations from manufacturing and quality control standards or legal compliance, environmental protection or health and safety issues.

We recognize and manage risks comprehensively by identifying critical suppliers in terms of transaction volume, important raw materials, and the absence of alternative suppliers.

Building Healthy Relationships with Suppliers

With the belief that our suppliers are our partners essential for providing patients with medical and pharmaceutical products and the like, Santen strives to enhance our product quality and carry out improvements to cut prime costs through mutual exchanges and cooperation, as well as complying with the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, and maintaining the secrecy of provided information, with the aim of building relationships that enable both parties to develop in a sustainable manner.

Santen has internal regulations, including the Regulations on Purchasing Management, providing that the selection of suppliers requires making competitive estimates and comprehensively evaluating candidates in terms of product quality, delivery periods, managerial reliability, etc. Concerning the prevention of conflict of interest, the Code of Conduct in the Santen Code of Practice provides against the receipt of profits provided by business partners.

We are holding meeting with our business partners.