Big Pharma's Most Feared Competitor - Pharmaceutical Executive

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Big Pharma's Most Feared Competitor


Pharmaceutical Executive


Stakeholder Differentiation

Just as important, Teva has established a significant competitive advantage with stakeholders. For payers—including governments, insurers, and retailers—Teva offers the broadest portfolio of pharmaceutical products, including generics, branded generics, well-known OTCs, hospital injectables, specialty products, biogenerics, and some innovative products.

With its flexible production capacity, Teva also provides reliable, on-time delivery. Moreover, the company leverages economies of scale to offer buyers attractive prices. Consequently, Teva has become increasingly successful with larger customers. For example, Teva was successful in the initial tender offer to the largest German insurer AOK.

Business Innovation

Pharma professionals don't typically think of Teva as an innovator, but that misconception makes the company an even more dangerous competitor. In fact, Teva has been an innovator in R&D, biogenerics, supply chain management, information technology, and manufacturing practices. Teva has several innovative brands, including the blockbuster Copaxone and the Parkinson's agent Azilect, and is actively pursuing novel compounds in neurology, autoimmune diseases, and oncology. The company employed a pioneering developmental approach to produce Copaxone with Israeli biomedical researchers at one-fifth the typical cost of R&D development for brand-name manufacturers.

In addition, Teva has developed an advanced biogenerics platform that provides a competitive edge in this rapidly evolving area. The company currently markets several products, including TevaGrastim and Tev-Tropin, and has recently added Ratiopharm biogenerics products. Teva filed its first BLA for a US biogeneric, XMO2, a granulocyte-colony-stimulating factor to compete with Amgen's Neupogen. The company is also developing a biogeneric of Roche's cancer and rheumatoid arthritis agent Rituxan, and has established a strong biogenerics infrastructure, including its alliance with Lonza and acquisitions Sicor, CoGenesys, and Ratiopharm. These investments have provided substantial regulatory, clinical, manufacturing, and commercial capabilities, and the company expects that biogenerics will comprise nearly 25 percent of its portfolio by 2015.

Teva has been a supply-chain innovator with industry-leading advances in information technology, sourcing, packaging, and manufacturing techniques. It also has a state-of-the-art, $20 billion distribution center with an automated warehousing system in North Wales, PA. These innovations enhance Teva's competitiveness by dramatically improving delivery reliability and reducing customer costs.

Competing with Teva

So, how can branded pharma companies compete with Teva and other generics manufacturers?

Develop a strategic plan for generics and generics marketplaces Most branded companies don't have a clear vision, strategy, or approach for competing with generics.

Conduct competitive simulations The new, improved version of war games can help competitors role-play Teva to understand its perspectives, culture, and strategies. These exercises can also pressure-test your company's competitive strategies and tactics versus Teva and other generic companies.

Initiate competitive training Competing against generics companies is very different than competing against innovative pharmaceutical companies with branded products. It's critical to utilize new types of training to confront these companies.

Stan Bernard is president of Bernard Associates, a pharmaceutical industry management consulting firm. He can be reached at


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