Sustainable Conduct

Marketing and Distribution

Our marketing and distribution activities are primarily geared toward acquiring new clients and retaining existing customers over the long term. In this area too, responsible practices are a top priority for Bayer.

Close distribution network and intensive customer dialogue

To consolidate and further build on our position in the different markets, we continuously work to optimize our market- and customer-specific distribution network and customer dialogue. Depending on market conditions, we supply our customers in the health care sector, in agriculture, in industry and in the private sector through wholesalers, specialist retailers or direct sales organizations. We have established our distribution channels at the international, regional and local levels in accordance with demand.

A high level of customer satisfaction is essential for our long-term success. We therefore systematically analyze both the diverse needs and satisfaction of, as well as complaints made by, our customers in the respective segments. We foster partnership and dialogue with our customers with the help of a variety of distribution tools and marketing formats.

Online Annex: A 1.4.2.3-1

limited assurance

Pharmaceuticals and Consumer Health

Numerous distribution channels in the health care sector

The products of Pharmaceuticals are primarily distributed through wholesalers, pharmacies and hospitals. The products of Consumer Health are generally sold in pharmacies, with supermarket chains, online specialists and other large retailers also playing a significant role in certain markets such as the United States.

Broad range of customer dialogue

Our customer environment includes in equal measure patients, consumers, physicians, pharmacists, caretakers, patient organizations, health policy decision-makers and opinion leaders, partners from research and development, and health authorities and health care payers. Our activities with all customer groups ultimately focus on the health and well-being of patients and consumers. Owing to the heterogeneity of these groups we take specific steps in each case when entering into dialogue with our customers.

Market research provides us with information on our customers’ needs and positions that we use as a basis for further activities. Through surveys with respect to various indications, therapeutic areas and regions, we regularly assess the satisfaction of our customers.

Different legal requirements apply for prescription medicines than for nonprescription medicines or medical devices with regard to the collection of customer satisfaction data. Taking account of these requirements, the Pharmaceuticals and Consumer Health segments conduct primary market and data research. Systematic internet analyses additionally give us a better understanding of our stakeholders’ opinions, interests and networks.

Pharmaceuticals, for example, engages in dialogue with patient organizations and groups so as to improve disease awareness and market access for innovative therapies.

Consumer Health has now successfully introduced its excellence program to improve customer orientation in 22 countries, with more to follow in 2017. With this program we aim to make Bayer the leading health care company in the areas of market development strategies, distribution and trading.

Crop Science

User-oriented distribution system at Crop Protection

We market our crop protection products in more than 120 countries, mainly through wholesalers or directly through retailers. Our seeds are sold to growers, seedling companies, specialist retailers and the processing industry. Plant traits developed using modern breeding methods are either incorporated into proprietary seed varieties or licensed to other seed companies. We market our Environmental Science range of pest and weed control products through wholesalers and specialist retailers to professional users in the green industry, forestry, industrial vegetation management and pest control, as well as in the area of public health to combat malaria and dengue fever, for example. The latter is mainly transacted through tendering by government agencies and NGOs.

Marketing to customers through new technologies

The customers of Crop Science vary according to product, region and culture. This results in different customer wishes and trends such as industrialization 4.0 with new technologies like digital farming and also rising demands with respect to food safety and quality.

We want to focus more strongly on our customers and their special needs and offer them tailored solutions. As a result, we realigned our Marketing organization in 2016. Through our locally aligned marketing activities (“field marketing”) in particular, we want to improve both the speed and content of our customer relations. In addition, we want to determine customer satisfaction through surveys every two years depending on the country organization. In 2016, we conducted such surveys in Japan and Hungary.

Crop Science is intensifying its direct cooperation with farmers through the Bayer Forward Farming initiative. Our solutions for sustainable agriculture in practice are demonstrated at Bayer ForwardFarms. Since the program was launched, Crop Science has been successively expanding this type of cooperation worldwide.

Animal Health

Depending on national regulatory frameworks, we market our animal health products through veterinarians and other distribution channels such as pharmacies or retail stores. Depending on the respective market segment, Animal Health conducts studies on customer satisfaction and customer retention. Performance indicators are developed from long-term studies in order to measure customer satisfaction.

Covestro

Covestro’s products are mainly supplied to the automotive and transportation, construction, wood processing and furniture, and electrical / electronics industries. Covestro markets its products mostly through regional and local distribution channels. Three globally established supply chain centers for Covestro’s most important regions pool all information streams from order acceptance to dispatch planning, delivery and complaint acceptance. They serve as the central link to the customers and aim to ensure the rapid and smooth processing of orders. Covestro systematically analyzes customer satisfaction worldwide through the regular evaluation of complaints and assessments by customers. Corrective and prevention measures are derived from this.

Commitment to ethical conduct

In the development, sale and marketing of our products, we do not tolerate bribery or any other form of improper exertion of influence on our business partners. The corresponding rules of conduct are established in our Corporate Policy “Responsible Marketing & Sales.” Furthermore, we are committed to ethical advertising and communication for all our products and services. Our minimum standards are derived from laws and other statutory regulations, industry codes and internal rules.

As part of our compliance management system, we register and investigate any suspected violation of our responsible marketing principles. This applies to complaints both from within the company and as notified to us from outside.

Our corporate policy and the respective training programs are implemented decentrally in the segments.

Online Annex: A 1.4.2.3-2

limited assurance

Pharmaceuticals and Consumer Health

The marketing and distribution of pharmaceuticals, medical devices and nonprescription (over-the-counter = OTC (over-the-counter) designates the business with nonprescription medicines. ) medications are strictly regulated and subject to relevant laws that we are committed to observing. Also applicable at Bayer at the global or regional levels are industry codes adopted by relevant associations of the pharmaceuticals and medical devices industries. In many countries, furthermore, these standards are further concretized by local codes – all of which apply to prescription pharmaceuticals and many of which additionally apply to nonprescription medicines.

All codes of the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA) serve as a binding global minimum global standard for all pharmaceutical products marketed by Bayer. In addition, Bayer observes the codes of the European Federation of Pharmaceutical Industries and Associations (EFPIA) for dealings with health care professionals and patient organizations. The WHO’s Ethical Criteria for Medicinal Drug Promotion, together with national ethical standards that are usually also enshrined in industry codes at the local level, represent the minimum global standard for the advertising of human pharmaceutical products at Bayer.

All the aforementioned codes contain provisions governing, among other issues, advertising material standards, the distribution of samples, cooperation with medical and pharmaceutical specialist groups in connection with speaker and consultancy contracts, and scientific studies. Adherence to these codes is designed to ensure the independence of both health care professionals and patient organizations. Based on the new EFPIA transparency code and the corresponding local interpretations, Pharmaceuticals discloses any grants to health care professionals and organizations annually for the preceding calendar year.

Bayer compliance rules supplement codes

The most important internal Bayer corporate policy is our Anti-Corruption Procedure. The key requirements and the minimum global standard for compliant and ethical conduct are summarized in the Anti-Corruption Compliance Manual, which applies worldwide at Pharmaceuticals and Consumer Health. Principles for ethically and legally acceptable advertising for pharmaceuticals and medical devices are set out in a further Bayer corporate policy. Should several regulations be relevant, Bayer principally applies the more stringent standards.

Training measures on product-related communication and anti-corruption are fundamental elements of the system at Bayer. The principles communicated in these training courses provide an overview of globally applicable minimum requirements for cooperation with key stakeholders in the health care industry, such as physicians, hospitals or patient organizations. The courses explain general compliance principles and also give specific instructions in relation to nonreciprocal benefits and the exchange of services with health care professionals.

Crop Science

Crop Science follows the guidelines of its Product Stewardship Policy with regard to the distribution and use of its crop protection products. This policy, which also satisfies the requirements of the Corporate Policy “Responsible Marketing & Sales,” is based on the International Code of Conduct issued by the Food and Agriculture Organization of the United Nations (FAO). We carry out training courses on this topic worldwide and make available corresponding materials to the employees online.

Responsible business practices in marketing and sales are addressed at Crop Science in compliance training courses and are also an integral element of marketing and sales excellence training measures.

Animal Health

In the marketing and use of its products, Animal Health not only observes statutory regulations, but also further-reaching Group-wide policies and voluntary industry-wide commitments. Where several regulations are applicable, Animal Health principally observes the more stringent requirements. Most of our companion and farm animal products are subject to the provisions of drug advertising law.

Covestro

In the marketing of its products, Covestro consistently observes its Responsible Marketing & Sales Policy. The importance of observing antitrust law and preventing corruption is regularly emphasized in training programs, internal communications and discussions with management.