Since losing patent exclusivity of its blockbuster Multiple Sclerosis drug, Copaxone, in 2015, Teva Pharmaceuticals has lost over $50B in market cap. 1,2 Recent news rival generics manufacturer, Mylan, will receive earlier than anticipated FDA approval for its generic 40mg three times weekly formulation will further challenge Teva’s top line.3 Over the same period, consolidation in the PBM space and increased generic competition is diminishing already thin margins for small molecule drugs.3 These events captured the attention of activist investors, and in response, Teva leadership committed to divest non-core assets to fund business operations and to focus on operational efficiencies to manage the bottom line. 4,5,6,7,8
Teva pursued multiple strategies to mitigate the impact from Copaxone generic entrants upon loss of exclusivity. These strategies, outlined at Teva’s 2012 investor meeting, included (1) expanding its pipeline of higher margin branded therapies, (2) focusing on its biosimilar therapy pipeline, and (3) improving global supply chain efficiency. 6,7 Common across of these initiatives is the increasing use of “digitization” to drive efficiency and value for the organization. Early examples of Teva’s use of digitization across its supply chain included:
- Teva established specialty pharmacy distribution networks through its Shared Solutions program to reduce friction across the therapy decision making process and to support Copaxone compliance.9 The program provides patient and provider support resources through Teva’s online portal, nurse hotline and specialty pharmacy providers.9
- In 2010, Teva acquired a generics manufacturer Ratiopharm which used social collaboration tools from Microsoft and Moxie to enhance communication between supply chain stakeholders, reducing system delays and costs.10,11,12
More recently in 2015, Teva made several investments and established multiple partnerships in digital health, and should expect to realize the benefits of these solutions over the next few years.
One of the first partnerships established was with IBM’s Watson Health. Specifically, IBM-Teva hopes to use machine learning in the Watson Health Cloud to analyze chronic disease models that facilitate drug innovation, reduce drug misuse, and to increase medication adherence using real-world evidence. 13,14
In addition to the digitization of therapeutic development, Teva is also innovating its biosimilar supply chain through a partnership with cold chain logistics leader, Controlant.15,16 Teva and Controlant have been recognized across the industry for their use of wireless temperature monitoring systems to track biologics distribution end-to-end; in the future, this partnership could serve as a strategic differentiator for Teva to compete against manufacturers of branded biologics and biosimilars.15,16,17
Other areas of investment include drug delivery technologies that can collect real-world patient data and differentiate generic drugs. In the near-term, Teva is expected to commercialize its Gecko Health CareTRx “smart” inhaler and mobile-app to track compliance across its respiratory therapies.18 Teva also invested in Microchips Biotech, a unique implantable drug delivery device that can be wirelessly programmed to deliver desired amounts of medication.19 Additionally, Teva partnered with Intel to use their Trusted Analytics Platform to wirelessly collect Huntington’s Disease patient data as a part of its Phase 2 study to monitor declines in motor control over time.20
Finally, Teva’s investment in American Well, a telehealth company that plans to add mail order medications could expand the number of patients with access to care while also providing Teva with a more direct channel to the patient.21 In the near to mid-term, this solution could increase access to care while replacing traditional doctor’s office visits and retail pharmacies.
Teva partnered with Phillips and formed Sanara Ventures, a joint venture to invest in strategic health technologies.22 Sanara’s investments in several focus areas should further enable Teva to use digitization to increase demand for its products and to maintain market share and competitive pricing in the mid-term. Focus areas for the venture group include:
- Continuum of Care and Disease Management: Support early diagnosis and therapy compliance23
- Digital Health, Healthcare IT and Mobile Apps: Track utilization and effectiveness of therapies23
- Patient Diagnosis, Sensing and Monitoring: Improve remote monitoring and track effectiveness of therapies23
- Drug Delivery and Device Combinations: “Approaches and technologies for transportation of medicines in the body, to achieve better therapeutic effect.”23
In the long-term, Teva has the opportunity to move up in the supply chain, closing the gap between drug manufacturer and patient. Teva should look for new ways to leverage data from connected drug delivery devices and sensors to develop predictive analytics that could prompt clinicians/patients to titrate or change medications, preventing disease worsening and costly acute care. Additionally, Teva should use these devices in clinical studies as way to economically collect additional clinical patient data. Finally, Teva should increasingly use this patient data in contract negotiations with pharmacies and insurers to demonstrate the value of its therapies.
With a strong pipeline of digital health solutions, how else might Teva use these technologies to close the gap between Teva and the ultimate consumer, the patient?
How could Teva use connected drug delivery devices to better forecast their product demand?
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- Yahoo Finance. “Teva Pharmaceutical Industries Limited (TEVA).” https://finance.yahoo.com/quote/TEVA/, accessed November 2017.
- Teva Pharmaceutical Industries October 29, 2015 Form 6-Q. http://ir.tevapharm.com/phoenix.zhtml?c=73925&p=irol-reportsAnnual, accessed November 2017.
- Rory Jones, “Teva Cuts Outlook Again in Perfect Storm of Problems,” Wall Street Journal, November 2, 2017, via Factiva, accessed November 2017.
- The Times of Israel, “Teva Should Ditch Generics, Focus on Branded Drugs, Activist Investor Says,” September 19, 2017, via Factiva, accessed November 2017.
- Seeking Alpha, “Teva: A Complete Overview,” August 30, 2017. https://seekingalpha.com/article/4103038-teva-complete-overview, accessed November 2017.
- Bill Berkrot, “Teva CEO Promises to Reshape, Refocus Company,” Reuters, December 11, 2012. http://uk.reuters.com/article/us-teva-outlook/teva-ceo-promises-to-reshape-refocus-company-idUKBRE8BA1AR20121211, accessed November 2017.
- Michael Hayden, “Teva Investor Day,” December 11, 2012, accessed November 2017.
- Nick Paul Taylor, “Manufacturing at the Heart of Teva’s $2B Cost-Cutting Drive,” FiercePharma, December 12, 2012. http://www.fiercepharma.com/partnering/manufacturing-at-heart-of-teva-s-2b-cost-cutting-drive, accessed November 2017.
- Teva. “Copaxone Shared Solutions.” https://www.copaxone.com/shared-solutions, accessed November 2017.
- FiercePharma, “Teva Supply Chain Gets a Boost from Social Media,” July 26, 2011. http://www.fiercepharma.com/manufacturing/teva-supply-chain-gets-a-boost-from-social-media, accessed November 2017.
- Sharon Gaudin, “Drug Maker Goes Social to End Supply Chain Crisis,” Computerworld, July 25, 2011. https://www.computerworld.com/article/2509386/social-business/drug-maker-goes-social-to-end-supply-chain-crisis.html, accessed November 2017.
- Moxie. “nGenera (Moxie Software) Unveils Human-Centered Enterprise Collaboration Solution.” press release, June 15, 2010. Moxie website, https://www.gomoxie.com/press/moxie-unveils-human-centered-enterprise-collaboration-solution, accessed November 2017.
- Guy Hadari, “Beyond the Pill, IT Leads the Technology Revolution at Teva Pharmaceuticals,” Pharma Tech Outlook, January 2016. https://www.pharmatechoutlook.com/magazines/December/January2016/, accessed November 2017.
- September 10, 2015, Teva “Teva Pharmaceuticals and IBM Partner to Build Global e-Health Solutions on the IBM Watson Health Cloud” http://www-03.ibm.com/press/us/en/pressrelease/47632.wss#release
- Gisli Herjolfsson, “Controlant: Bringing IoT and Cloud Access to the Entire Pharma Supply Chain.” PowerPoint presentation, April 10, 2016. https://conference.advania.com/lisalib/getfile.aspx?itemid=104edd69-8a16-11e6-9407-005056bc2afe, accessed November 2017.
- Controlant, “Pharmaceutical,” http://www.controlant.com/pharmaceutical, accessed November 2017.
- LogiPharma. “LogiPharma Launches Pharma Supply Chain Awards,” press release, May 17, 2017, on PR Newswire website, https://www.prnewswire.com/news-releases/logipharma-launches-pharma-supply-chain-awards-622714044.html, accessed November 2017.
- Jof Enriquez, “Teva Pharmaceuticals to Buy Gecko Health Innovation,” Med Device Online, September 28, 2915. https://www.meddeviceonline.com/doc/teva-pharmaceuticals-to-buy-gecko-health-innovations-0001, accessed November 2017.
- Jof Enriquez, “Teva, Microchips Biotech Tea on Drug Delivery Microchip,” Med Device Online, June 22, 2015 https://www.meddeviceonline.com/doc/teva-microchips-biotech-team-on-drug-delivery-microchip-0001
- Steve Rogerson, “Intel Partners Teva to Tackle Huntington Disease,” Connected Health News, September 27, 2016. http://www.iotm2mcouncil.org/intteva, accessed November 2017.
- Jonah Comstock, “Report: Teva Pharmaceuticals Invested Tens of Millions in American Well,” Mobihealthnews, June 4, 2015. http://www.mobihealthnews.com/44094/report-teva-pharmaceuticals-invested-tens-of-millions-in-american-well, accessed November 2017.
- Sanara Ventures, “About Us,” http://sanaraventures.com/, accessed November 2017.
- Sanara Ventures, “Our Focus,” http://sanaraventures.com/, accessed November 2017.
- Photo Credit: Jonah Comstock, “Teva Pharmaceuticals buys smart inhaler company Gecko Health Innovations,” Mobihealthnews, September, 27 2015. http://www.mobihealthnews.com/47039/teva-pharmaceuticals-buys-smart-inhaler-company-gecko-health-innovations, accessed November 2017.
- Pharmacy Benefit Manager (PBM)