Israel's Teva Pharmaceutical Industries Ltd.: Success with a Hybrid Business Model


Code :BSM0045

Year :

Industry : Health Care

Region : Israel

Teaching Note:Available

Structured Assignment :Available

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Abstract: This case study was written to assess if it is practical for drug manufacturers to stick to one particular business model given the intense competition in the pharmaceutical industry. It is suitable for courses on strategy and entrepreneurship. Global pharmaceutical industry is highly fragmented with fierce competition between big pharma companies and generic drug companies, which were considered as the dark horses of the pharmaceutical industry. During 2004–2007, the world generic pharmaceutical market grew at a CAGR of 16.4% whereas the overall global pharmaceutical market grew at a CAGR of 8.3%. The case describes Teva Pharmaceuticals Industries Ltd., an Israeli company’s success in the pharmaceutical industry with a hybrid business model for manufacturing both generic and blockbuster drugs. With the major markets of the US and Europe maturing, Teva announced its plans to enter the generics market of Japan in 2008. Japan is opening up its market for generics due to the rising healthcare cost challenges. However, it has been conservative in its approach towards generic drugs. Will Teva be successful in Japan with its strategies of globalisation and acquisition? Will Teva’s hybrid business model help it overcome the challenges of the changing pharmaceutical industry?

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Pedagogical Objectives:

  • To understand the competitive dynamics of blockbuster drug and generic drug business models and the differences between the two
  • To understand Teva's unique hybrid business model and analyse its pros and cons
  • To analyse the healthcare cost challenge of Japan and to debate on the growth options available for Teva in entering Japan
  • To explore the foundations of Israel's entrepreneurial culture.

    Keywords : Teva, Pharmaceuticals, Generics, Blockbuster drugs, Hybrid business model, Japan, Israel, Big pharma companies, Waxman-Hatch Act, Patents, Shlomo Yanai, Copaxone, Eli Hurvitz, Innovative drugs, Azilect

    Contents :
    » Big Pharma Companies vs Generic Drug Manufacturers: Divergently Convergent
    » Israel: A Hub of Research & Development?
    » Teva - The Israeli Generic Drug Manufacturer

    Case Introduction >>

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