Teva Pharmaceuticals Industries Ltd

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EXECUTIVE SUMMARY

Teva Pharmaceuticals Industries Ltd. is a leading global pharmaceutical company specializing in manufacturing, production, distribution and development of generic and patented drugs. Currently present in 25 countries, Teva Pharmaceuticals ranks number one in generic drugs, worldwide. In 2014, Teva recorded revenues worth $20 billion and today is the world’s largest producer of generic drugs by revenues. It has 36 manufacturing facilities around the world which is 4 to 6 times that of it’s competitors like Mylan and Watson Pharmaceuticals.

Headquartered in Israel, Teva Pharmaceuticals entered the US market in 1985 to make ‘The Billion Dollar Theory’ a reality. The US market was dominated by wholesalers and distributors whoch had long focused on serving mom and pop pharmacies. Teva managed to fill vacuum for these national chains, enabling them to reduce their own costs by sourcing products from a single company without utilizing a middleman.  Along with a broad scope of products Teva also provided inventory management, volume-based discounts and pricing bundles. These services may not be as important to mom-and-pop shops as to chains that are cost-conscious.

Teva has always focused on low prices and economies of scale has allowed them to do so. They also managed successful collaborations with academic institutions which conducted research for them, thereby lowering their R&D costs.

The fast increasing cost of research and development of new drugs combined with the heightened FDA regulations, enables only larger pharmaceutical companies to deal with it. Therefore, mergers and acquisitions are a very smart way to increase one’s capability and ability to handle these issues, which has always been Teva’s strategy. This also increases its consolidated profit and market share in the in the pharmaceutical markets by a huge margin. Post the acquisition of Allergan, Teva will tremendously increase their market standings in US.