**5. Discussion**

By combining the above-mentioned factors, a broad picture of the company's evolution can be painted.

Things took a downturn in the 2000s when Teva embarked on a strategy to create shareholder value through mergers and acquisitions. When Teva acquired U.S. drug company Cephalon in October 2011, Cephalon's R&D team took over the development of the anti-depression drug. Within a year, the R&D employees were laid off. The acquisitions resulted in significant short-term financial gains because stock prices could be raised through acquisitions. Chief executives of that period had focused on creating shareholder value through mergers and acquisitions in the pharmaceutical market, rather than focusing their energy on their drug clientele and patients. They also channeled investments away from the research and development of drugs such as COPAXONE®. Teva's reputation as an innovative and entrepreneurial Israeli company with a heart for its employees seemed to have lost its way (**Figure 3**).

In 2015, Teva's competitor, Allergan, became the largest shareholder of Teva after Teva acquired Allergan's generic pharmaceutical division. This resulted in much unhappiness among other shareholders, causing a corporate crisis. The other shareholders of the business were dissatisfied as the two leading generic businesses came together, and their fundamental needs and expectations overshadowed the needs of other shareholders [23].

After the U.S. Federal Court of Appeals ruled in 2015 that Teva's patent of its 20 mg dose of COPAXONE® was expired, the competitors launched their generic


#### **Figure 3.**

*Areas of care treated by Teva. (Sources: 1 Teva treatment for migraine, https://www.teva.co.il/Treatment-area/ Migraine/, date accessed: 28 February 2020. 2 Teva launches AJOVY for the treatment of migraine with the YpsoMate autoinjector from Ypsomed, https://www.ypsomed.com/fr-CA/derniere-nouvelles/news-reader-detailpage/teva-launches-ajovy-for-the-treatment-of-migraine-with-the-ypsomate-autoinjector-from-ypsomed. html#:~:text=AJOVY®%20(fremanezumab%2Dvfrm),is%20affected%20by%20migraine%20worldwide, date accessed: 28 February 2020. 3 Teva treatment for pain, https://www.teva.co.il/Treatment-area/Pain/, date accessed: 28 February 2020. 4 Teva treatment for CNS, https://www.teva.co.il/Treatment-area/Central-Nervous-System/, date accessed: 28 February 2020. 5 Teva treatment for cancer, https://www.teva.co.il/Treatment-area/ Oncology/, date accessed: 28 February 2020. 6 Teva treatment for breathing, www.teva.co.il/Treatment-area/ BreathLobby/, date accessed: 28 February 2020. Teva Pharmaceutical Industries Limited, https://www. annualreports.com/HostedData/AnnualReports/PDF/NYSE\_TEVA\_2019.pdf, date accessed: 28 February 2020.)*

*Teva Pharmaceutical: Generic Market Access to Global Healthcare Industry DOI: http://dx.doi.org/10.5772/intechopen.97747*

#### **Figure 4.**

*Price return performance. (Source: Can Teva (TEVA) Return to Growth in This Year or Next?, https://finance. yahoo.com/news/teva-teva-return-growth-next-095909420.html?guccounter=1&guce\_referrer=aHR0cHM6Ly9 3d3cuZ29vZ2xlLmNvbS8&guce\_referrer\_sig=AQAAAN5KQnTTIjEo7PfncCLKNGoUwFpDU2vz UMoUxszodGcNCk5sv1NLAQ5MMRJ3ctF1Z9Rvi5QFhSDErtdGH6I66TL-5\_HIFkVT\_ Dpz0nXFej10FdufNDx0UQdY2WbUJRUr89J9wa1vGEVR\_pjI9sG7phD6PFgemJIZyfMU0n5mZdn0, date accessed: 28 February 2020.)*

versions and the profitability of COPAXONE® eroded, and Teva's market share plunged. With the launch of Glatopa®, Teva had expected it to reduce Teva's revenue by 18% to 4.7 billion as well as further eroding prices [24]. This increased the competition of COPAXONE® significantly. Also, the competition generated by Mylan's generic version, sparked a competitive price war leading to Teva's US COPAXONE® revenue to fall by 20 percent (**Figure 4**). Regarding Synthon, one hit was when Synthon was accepted in European markets. Even though the European market was not the most important market for COPAXONE®, Teva had until then enjoyed patent protection and avoided competition. Synthon's announcement came just a few days after Mylan launched the 40 mg and 20 mg versions of glatiramer acetate in the United States [14].

Teva's troubles continued to mount. Its share value was reduced in the indices due to stock exchange reform. Teva was also denied a critical patent application which eroded the profitability of the flagship drug COPAXONE®. COPAXONE®faced growing competition after parallel pharmaceutical companies launched their generic versions in 2016, which triggered a precipitous decrease in Teva's market share (**Figure 5**).

One of the main reasons for Teva's losses is a result of being entirely dependent on the sales of one of the company's primary drugs, Copaxone, used as the treatment for M.S. This puts Teva in a weak position because any drop in drug sales can and will have a negative impact on the company.

#### **Figure 5.**

*Source: Zacks, Generic Industry on Path to Recovery: 3 Hot Picks for 2019, https://www.nasdaq.com/articles/ generic-industry-on-path-to-recovery%3A-3-hot-picks-for-2019-2018-12-28, date accessed: 28 February 2020.*

#### *Healthcare Access*

When Schultz joined the company, Teva's debt was \$40 billion. Teva had also begun a process of significant streamlining, which included laying off about 25 percent of its employees, or roughly 14,000 people, and 1,750 in Israel alone. Teva had lost more than half its market value, with plans underway to leave 45 countries before the year is out. It is currently difficult to assess what can be done so that Teva can rebuild its reputation (**Figure 6**).

The acquisitions resulted in significant short-term financial gains because stock prices could be raised through acquisitions. Chief executives of that period had focused on creating shareholder value through mergers and acquisitions in the pharmaceutical market, rather than focusing their energy on their drug clientele

#### **Figure 6.**

*Teva's stock performance. (Source: Teva Pharmaceutical Industries Limited, https://finance.yahoo.com/chart/ TEVA, date accessed: 28 February 2020.)*

#### **Figure 7.**

*Annual revenue of Teva Pharmaceuticals industries. (Source: Revenue of Teva Pharmaceutical Industries from 2006 to 2020, https://www.statista.com/statistics/272542/teva-pharmaceutical-industries-net-sales-since-2006/, date accessed: 28 February 2020.)*

*Teva Pharmaceutical: Generic Market Access to Global Healthcare Industry DOI: http://dx.doi.org/10.5772/intechopen.97747*

and patients. They also channeled investments away from the research and development of drugs such as COPAXONE®. Teva's reputation as an innovative and entrepreneurial Israeli company with a heart for its employees seemed to have lost its way (**Figure 7**).

In May 2017, Teva's share dropped to a level that it has not been since 2005; the decline was due to investors' concerns that in June 2017, Mylan would receive authorization to initiate the marketing of a generic version of Teva's profitable 40 mg COPAXONE® in the United States.

In the last decade, Teva has spent \$70 billion on giant acquisitions, Cephalon and Actavis, and for that reason, it is expected that its value to be minimally \$70 billion, but in reality, it is about half of that, and its share has plummeted more than the rest of the sector. The cutting of spending was not large enough to justify the acquisition.

In 2019, Teva's total revenue fell by 8% to \$16.9 million, which was a decrease of 8% as compared to 2018. This decline was mainly due to various reasons like the generic competition to COPAXONE®, a decline in revenues from U.S. generics business, BENDEKA®/TREANDA®, and Japan. However, this decline was partially offset by higher revenues from AUSTEDO, AJOVY, and QVAR® in the United States. COPAXONE® accounted for 11% of Teva's North America revenue from October to November 2019 [22].

In spite of the many difficulties the company faced in the last decades, there is still the possibility that the company can rebalance again and learn from its mistakes. Teva is still a major pharmaceutical company that offers a broad range of drugs in the global market setting. It has been showcasing consistent performance and contributing to improve the health outcome of the general public. The firm's strategy plays a cardinal role in influencing its contribution to the dynamic industry.
