Read the Conversation
Meeting highlights:
- Teva’s Priorities for 2025 in Germany: “Pivot to Growth Strategy” launches innovative products, improves the footprint and efficiency of generics’ business, and navigates Germany’s evolving pharmaceutical landscape.
- Challenges & Opportunities in the German Landscape: The generics market is facing difficulties, especially due to price pressures that impact the growth of portfolio and supply. With the Pharma National Strategy and upcoming elections in February, Germany is moving in the right direction.
- Strategic Importance of Germany to Teva: Germany is the 4th largest pharmaceutical market worldwide; Teva became the main generics provider in Europe with the acquisition of Ratiopharm, a production site in Ulm with significant investments from global headquarters, and top-tier educators and professionals for scientific research.
- Teva Attracting & Retaining Talent: Dynamic organization, more power of decision to employees, one shared mission.
- Andreas Burkhardt’s Proudest Moments: After almost 20 years at Teva, Andreas Burkhardt reflects on his role in transforming the company’s structure into a more agile organization and maintaining continuous growth even during challenging times.
EF: What are the priorities on your agenda right now, and what can we expect from Teva in 2025?
AB: The year will undoubtedly be interesting, particularly for our generic business. As you may know, the generic industry in Germany is grappling with significant challenges. These stem from strict regulatory mechanisms aimed at driving down prices, which are enforced by authorities. This has resulted in supply shortages and made it increasingly difficult to deliver a broad portfolio of generics to patients in Germany. Addressing this issue remains a key focus for us.
Adding to the complexity, Germany will hold parliamentary elections in late February. This is noteworthy because we have managed to bring public attention to the real issue—the systemic challenges driving supply constraints rather than shortcomings within the pharmaceutical industry itself. We anticipate that the new government will introduce policy changes, especially since the outgoing administration took initial steps in the right direction. For the first time, the Minister of Health acknowledged that excessive pressure and minimal margins are the root causes of the current situation. However, the impact of the new legislation has been minimal, covering just 1% of the portfolio.
Despite these limitations, some progress was made, particularly with children’s medication. The Minister analyzed areas of supply shortages and took appropriate measures, such as halting tenders and easing price pressures to stabilize supply. While these actions are commendable, they must be expanded to include more products to create a sustainable system. The inability to adjust generic pricing, especially in the face of inflation over the past 3 years, has exacerbated the issue. Rising costs have placed additional strain on an already tight system.
The legislation has also introduced new requirements, such as extending product storage to six months. This approach, while well-intentioned, is impractical, especially for products already in short supply across Europe. It forces production to prioritize warehousing rather than fulfilling market demands.
Operational optimization and leveraging data science to improve efficiency and decision-making will remain critical priorities. Internally, our focus will also include profitable growth in order to support our pivot to growth strategy and prepare for upcoming product launches, which represent a significant opportunity, but they also require careful preparation.
Another pressing issue is the EU's Green Deal and its implications for the pharmaceutical industry. For instance, the Urban Wastewater Treatment Directive (UWWTD) mandates building advanced purification systems across Europe. The pharmaceutical and cosmetic industries are expected to fund the associated costs, which could reach double-digit billions. With no ability to raise prices, this poses a severe challenge. The rationale behind targeting these industries remains unclear, and such measures risk undermining European healthcare systems. Additionally, we face uncertainties surrounding the implementation of this legislation, as individual countries are now tasked with determining how to enforce it.
Numerous legislative challenges are impacting the pharmaceutical industry, one of which involves F-gas, a critical component used in pressurized inhalers. These inhalers rely on F-gas, and if their use is restricted under new environmental regulations, the industry will face significant hurdles. First, manufacturers would need to redesign these inhalers, which is no small task. Second, this would increase production costs in an environment where margins are already extremely low.
For example, products like salbutamol for asthma patients are already unprofitable under current conditions. With the introduction of this legislation, continuing to produce such items would be financially unviable, potentially leading to supply shortages for patients who rely on them. This is a critical issue, as it does not merely impact businesses but directly threatens patient access to essential medicines.
What is particularly concerning is how these regulations are being developed. Often, environmental legislation is introduced without fully considering its broader implications. In this case, the new rules threaten to dismantle the inhaler business entirely, jeopardizing patient care in the process. It reflects the European Union’s narrow, single-focus approach that fails to account for the cascading effects on industries and public health.
This issue is not unique to the pharmaceutical sector. Companies across various European industries are voicing similar concerns about increased bureaucracy and rising costs driven by poorly balanced legislation. The disconnect between regulatory intent and real-world impact is a growing challenge that must be addressed to ensure sustainable operations and continued support for patient needs.
On the opportunity side, there is a significant internal advantage worth highlighting. We are among the few companies striving to maintain an equal balance between innovative and generic businesses within a single organization. This hybrid approach is unique and presents a compelling opportunity for us.
On one hand, we can achieve growth through the introduction of new products and the implementation of a forward-looking strategy. On the other hand, we can focus on improving the efficiency of our generics footprint and optimizing operations to make it more sustainable and effective.
EF: Could you elaborate further on the generics landscape in Germany from Pro Generika’s perspective? From Teva’s standpoint, how crucial is it for the company to be actively involved in shaping the future of this landscape?
AB: At Teva, we are one of the largest, if not the largest, healthcare medication providers in Germany. When you combine our generics and OTC offerings, we are undeniably the volume leader. This gives us a substantial presence in the market, and with that comes the responsibility to advocate for the system and fight for our patients.
Germany has one of the highest generic conversion rates, with 80% of medications being generics. However, we are heading in a problematic direction. The country increasingly depends on Indian and Chinese suppliers. While there is nothing inherently wrong with these suppliers, an overreliance creates vulnerabilities. A balanced approach is necessary, but the current system in Germany not only fails to encourage balance but actively disadvantages local or regional production due to stringent regulations and bureaucracy. This gives an advantage to countries with fewer constraints, where production costs are lower.
Our efforts are not aimed at merely boosting our profits by opposing tenders. Instead, we are focused on addressing critical supply shortages. We advocate for solutions that prioritize areas with limited suppliers, adopting a good-citizen approach. Our goal is to secure a stable supply chain for patients while supporting the broader industry. Ensuring patients have reliable access to medication is a duty we take very seriously.
Pharmaceuticals are a complex field for the average person to fully grasp, so part of our role is to explain the root causes of current challenges. By fostering understanding, we aim to build broad public awareness and support for these issues.
As we have learned—and this is true across all countries—public interest is a key driver for political action. Politicians are generally more responsive to topics that resonate with their electorates. If the public remains disengaged, these issues often fail to gain traction at the political level.
This is why we use a dual approach. On one hand, we work to educate the public about what is happening and why it matters. On the other hand, we engage directly with politicians, contributing practical solutions that could lead to a more effective and sustainable system. By combining these efforts, we aim to secure meaningful progress for the benefit of patients and the industry as a whole.
EF: Could you provide an overview of why Germany holds strategic significance for Teva as a global group and where you see potential for continued investment in the market?
AB: Germany is strategically significant for Teva due to several factors. First, in terms of pure numbers, Germany is the fourth-largest pharmaceutical market globally and the second-largest market for Teva after the U.S., albeit with a notable gap.
Historically, Germany's importance grew significantly with Teva's acquisition of Ratiopharm. Before this acquisition, Teva's presence in the European generics market was limited and fragmented. The acquisition elevated Teva's position in Germany from 15th or 20th place to 1st or 2nd, underscoring the strategic value of the German market.
Additionally, Teva has established complex production capabilities in Germany, particularly in Ulm, which is home to facilities producing solids, supplements, creams, and ointments. This site also houses the largest sterile nasal spray manufacturing unit within the Teva network, showcasing the advanced technologies and expertise concentrated here. These capabilities are unique and vital to Teva's global operations.
Moreover, Germany offers a highly educated workforce and a favorable environment for pharmaceutical innovation. Teva has become a top employer in its region, further enhancing its reputation and operational strength. Finally, the Ratiopharm brand is a key asset, consistently ranking among the top 10 brands in Germany across all industries, making it the most recognized pharmaceutical brand in the country. This combination of market size, operational capabilities, and brand strength makes Germany a cornerstone of Teva's global strategy.
So, considering all these assets, Germany holds a strong position for Teva. Of course, consistent performance is critical, and the work over the past years has reinforced this standing. One notable example is the decision to establish a biopharmaceutical production site in Germany. I was part of the team promoting the German site during an internal competition led by an external company.
Despite other countries offering significant tax benefits, the decision clearly favored Germany. The rationale included the availability of a highly educated workforce and the advantage of being part of a biopharma cluster stretching from Germany to Milan. Within a four-hour radius, the region is home to numerous biopharmaceutical companies, institutions, and universities specializing in this field. These factors were decisive, given the complexity of biopharmaceutical production and the need for expertise to manage it effectively. The strong pool of talent and resources in Germany ultimately made it the ideal choice.
EF: How is Teva’s "Pivot to Growth" strategy being translated into the German market, and are there any upcoming innovations you're particularly excited about that will contribute to the growth of Teva in Germany?
AB: In many companies, it is common to be in a secondary launch position following the initial launch in the U.S. This is the case at Teva as well. We are preparing to launch products that have already been released in the U.S., such as AUSTEDO, for tardive dyskinesia, which has been quite successful in the U.S. market. We are now preparing for future launches in European markets.
Additionally, we are working towards the launch of Olanzapine LAI, a long-acting version for schizophrenia. The preparations are well underway. We are also supporting studies on our Anti-TL1A product, for which we recently released promising Phase 2 results.
In this regard, you may be familiar with Germany’s AMNOG system, which requires companies to prove their drug offers added value compared to the current standard of care. If successful, this allows for price negotiations and the potential for a higher price than the standard. The process is clearly defined, detailing the data and structure required to meet these criteria.
While we have not yet launched a product, we are involved in various stages of the process. This shift will naturally impact our organization. We have a strong presence in generics, and we are working to leverage some of our generic expertise while integrating innovative business strategies, combining the strengths of both to launch these new products successfully.
We have a solid footprint in Germany, with a broad portfolio. Our goal is to offer innovative products that address unmet needs and contribute significantly to the healthcare budget by providing generics. These generics help improve market access by increasing generic conversions and lowering prices, though not necessarily across all areas.
EF: In a highly competitive market, how does Teva attract and retain talent while also developing and fostering local skill sets within the team?
AB: On one hand, Teva’s global strategy of focusing on people and growth is a strong pillar for attracting talent. This resonates with many candidates during job interviews, especially when our CEO, Richard Francis, highlights what we have achieved. It is not just about plans but actual results—we have delivered seven consecutive quarters of growth, launched major products, and submitted impressive study numbers. This demonstrates that we are on track and drives confidence in our potential for continued success.
We are also working hard on our employer branding from a German perspective. It is less about creating a marketing facade and more about genuinely communicating the assets we offer and our company type. We take pride in our culture, characterized by flat hierarchies and high dynamism. Compared to larger pharma companies, we are much more agile, with a decision-making process that empowers local teams and fosters quick actions.
We offer a range of benefits, and recently, in Germany, we made significant changes to our organization. We moved away from the traditional business unit structure and transitioned to a more agile approach. This model is somewhat like consulting, where we have a pool of expertise, and depending on the project, we bring in the right experts. The staffing is fluid—when more medical expertise is needed, we add more medical professionals, and when more product-related expertise is required, we bring in the appropriate people.
We have now entered year three of this shift, and we are focused on achieving final efficiency. This transformation has also made the organization more self-organized and agile, giving our teams greater decision-making power. Our employees can truly influence outcomes and create change, which has been very well received. Many of our colleagues have shared that this level of autonomy and flexibility is not very common, especially in the pharmaceutical industry, making it a distinctive and attractive aspect of working here.
EF: What accomplishments are you most proud of at Teva, and what lessons have you learned along the way?
AB: There have been many accomplishments I am proud of over the past 20 years, and it has certainly never been boring. One key moment was when Teva acquired Ratiopharm, a local company. Suddenly, we were part of a global organization, and during that time, I had a significant role in finance. That was a great experience. Additionally, my transition from finance to commercial has been rewarding and successful over the past 8 years.
One of the most significant milestones for both me and the organization was the transformation of the German commercial unit. We transitioned from a traditionally structured pharmaceutical company into a much more agile, modern, customer-centric, and data-driven organization. This change was a big step for us, especially as we did not rely on external consultants—we did it ourselves.
The fact that we managed this transformation without losing many people and created strong buy-in from the team makes me especially proud. We have already seen the benefits of this shift since last year, and I consider it a bold and innovative move. It was not guaranteed to succeed, and had it not worked, there would have been challenges, but we made it happen.
