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Exclusive Life Science Feature to produce a single product at a very low cost because that's all mental capability is important," he says. "You cannot raise the cost, they do. The question is, will they be able to deliver high quality developing more and more complex products at higher and higher at the high volumes the FDA and customers demand, and can prices. You must maintain access at the most affordable prices. If they ever do a high-complex product? It will depend on their you don't do that, you run into a major problem. That's why I ability to finance quality capabilities to support FDA regulabelieve that scale matters. Scale matters a lot." tions, whether they produce in the United States or import from In addition to scale, Teva epitomizes the aggressive adoption of foreign countries — that will be an essential requirement of all advanced manufacturing technologies now gaining momentum great producers of medicines in the future." among generic drug producers to ensure product quality Teva's entry into specialty pharma also begs the quesand gain efficiency. Levin believes the generics industry is tion of whether smaller specatching up with Big Pharma on cialty companies will survive the manufacturing front and, in the competition from larger Teva's case, often surpassing it. players. "Specialty companies "The standards and have a very important role. capabilities and skills inherent Small companies and large in a pharmaceutical operation companies can now explore are now the same ones required alternative forms and uses of for generics — and this is all to medicines in a way that hasn't the good," Levin says. "I view happened before. But Teva's Teva as a natural partner of the approach to specialty products pharmaceutical base because we is industrial scale. You need to manufacture." produce them consistently and Everything said so far about in an industrial fashion. Then branded or originator versus you can select them from an generic medicines applies array of choices in your armamainly to only one market, albeit mentarium based on whether a large one, the United States. you'll get a reasonable return, Travel outside its borders, and have the technological capa- "We globalize certain functions such as compliance, finance, legal, the clear distinction between bility to produce them, and procurement, and R&D.; We've also globalized our whole specialty the two nearly fades away. So know they'll benefit patients medicine franchise and capabilities," says Jeremy Levin, CEO, Teva. when I ask Levin whether the and payers." Big Pharma execs still give his Levin says the company has a system for selecting and assemcompany the cold shoulder over its generic roots, although the bling a portfolio of drugs and advancing them through NTE company's business is far broader now, his response reflects a development. It has promised to deliver 10 NTEs into the much larger, global, and historical picture of the dichotomy. pipeline every year and, he says, will end this year well ahead "The original antagonism that existed between the of that number. "Our pipeline includes some potential blockpharmaceutical industry and the generic industry was based busters, in terms of both their value to us and their value to on directly competing business models. The pharmaceutical patients. Success in meeting our targets for the number of new industry had every interest to protect their franchises, whereas pipeline projects we add each year will rapidly build a multithe generics companies were specifically attacking those billion-dollar opportunity for the company, by virtue of having franchises. But for Teva, and from my point of view, our many different products that we know are successful, we know interests have become more and more intertwined. The lack their pharmacological capabilities, and we know what they do of sustainable franchises and the social pressure around for patients." healthcare economics in the United States gave us one enormous shared interest — to retain public confidence in COST CONSCIOUSNESS, FLOOR TO CEILING our medicines across the board. Having spoken to the more With all the talk about high-value, complex, and special generics, thoughtful leaders in the pharmaceutical industry, I believe we it is fair to wonder whether the sector could move away from its are seeing a convergence." original cost-saving mission. Is this a bit like new cancer mediTEVA'S TEAM RESHAPES cines, vaccines, and orphan drugs growing in sophistication but Tooling up for its innovation initiatives has affected more than techwith price tags that empty pocketbooks and strain payer budgets? nology at Teva. According to Levin, operations and management Levin's answer is an unequivocal no. "That is why a large funda- 28 LifeScienceLeader.com October 2013