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EF: Can you provide an overview of the past year and how it is influencing your priorities for 2024?
RF: In 2023, the market stabilized, transitioning from double-digit growth in 2020 and 2021 to single-digit growth. Some market segments experienced a decline in volume, while others saw an increase. The market is reverting to pre-2019 trends, with slightly elevated prices between 2022 and 2023 due to inflation. In the pharmaceutical retail sector, prices rose, contributing to a modest market upturn. IQVIA predicts a market growth closure ranging between four and five percent.
Following our ongoing trend, I anticipate Teva's growth to reach two times that of the market. Despite the various dynamics in the different areas caused by the influence of the pandemic, we grew and managed to deliver the goals we set ourselves at the beginning of the year.
In 2023, we also observed the initial rollout of the Mexican government's biannual tender. Despite some coordination issues between government bodies like IMSS (Mexican Social Security Institut) and decentralized institutions like Pemex, the tender progressed as planned, showing structured delivery. Recent data shows that 70 percent of the tender has been executed and fulfilled, surpassing our 2021 projection of 30 percent. The government issued purchase orders, and companies successfully delivered the products. Moreover, alongside the government's efforts, Pemex and IMSS introduced their own initiatives, such as a complementary tender from IMSS. 2024 is an election year, so political fluctuations are expected, but overall, stability has remained crucial throughout this process.
EF: Could you tell us more about the company’s new “Pivot to Growth” strategy and how it will reflect on Latin America?
RF: Our new CEO, Richard Francis, joined the company earlier this year. One of his first tasks was to realign our strategy and rethink the lookout for the next five years. The new growth strategy’s main priorities are, firstly, the return to growth, as the company has been very flat and highly financially focused. Secondly, we want to prioritize our growth drivers, which are our innovative products, such as Austedo® for Huntington’s Disease, or Ajovy ® for adult migraines.
Thirdly, we want to maximize our capabilities on the innovation side and our generics platform. Teva is a world leader in generics and delivers medications for multiple therapeutic areas and classifications. To optimize our generics pipeline, we are now targeting 60 percent of global patent expirations to better serve shareholders and patients, refining our focus from an initial goal of 80 percent.
We also need to maximize our platform for innovation in biosimilars and biologics. Teva has already built strong foundations in the US and European markets and developed its footprint in biosimilars in emerging markets. For biologics, we have established a clear path, including a recent agreement we concluded with Sanofi. Regions like China, Japan, Russia, and Latin America are critical for the future. Our pipeline caters to these markets on the innovation and generic sides. We can use this asset to extract value and benefit patients.
Our new purpose, "All in for better health," strongly resonates with Latin American markets, particularly Mexico, where we seek to develop capabilities. In Mexico, our focus has been on CNS and oncology support areas. Our entry involved critical treatments for promyelocytic leukemia, significantly improving patients' outlook with a 95 percent remission rate. Additionally, our support products complement oncology and chemotherapy.
Our history allows us to leverage our success for the future. While recognizing Mexico's challenging innovation landscape, where less than 10 percent of COFEPRIS approvals are for innovative products, we are actively collaborating with health authorities to enhance access to therapies. The industry is working closely with the Secretary of Health, COFEPRIS, and the National Commission to address this issue and facilitate wider access to innovative treatments.
EF: How are you using digital tools to increase product access and create better communication structures?
RF: Teva is positioning itself as a hybrid company of the future. We want to be a leader in generics and enhance our market position through innovation and scientific development. To achieve this, we need all the technological tools that we can think of.
We are actively integrating AI into predictive models to benefit patients. These models forecast disease prevalence, assess therapeutic impacts, and estimate patient affordability. Moreover, we are exploring access tools to improve healthcare accessibility, particularly in Latin America, where public healthcare systems prevail. Collaborations, like those in Chile, focus on ensuring product accessibility under relevant legislation, creating mutually beneficial models for the government and Teva.
We have a strong global network, but strategic manufacturing management is crucial to avoid excess or insufficient production, especially outside the US. Regarding communication, continuous learning from the medical community remains a priority. We employ diverse tools to ensure a seamless connection between digital, clinical, and medical education and the patient's needs. This gives us a holistic approach to accessing healthcare.
EF: Can you elaborate on Teva's efforts to push for digital prescriptions in Mexico to increase access?
RF: Mexico has a clear digital agenda for public entities, policymakers are strongly advocating for digital prescription adoption, an area where we aim to play a significant role. Digital prescriptions facilitate doctor-patient connections and streamline information flow. They enable data collection on patient needs and purchasing trends, benefiting the government, pharmacy chains, and wholesale distributors. Moreover, digital prescriptions ensure adherence to prescribed drugs, minimizing the likelihood of receiving unauthorized medications.
EF: Teva has the goal of humanizing healthcare. Could you tell us more about your ESG initiatives in Latin America that go beyond the pill?
RF: Teva is a company that invests highly in sustainability efforts. Our strategy is not solely focused on financial growth but also on innovation and various essential elements to ensure our company's long-term sustainability.
We are dedicated to expanding healthcare access globally through digitalization utilizing AI, digital platforms, and social media. Regarding our ESG commitments, we are talking about a Healthy Future and our focus is on providing high-quality products to patients. In 2022, we set ourselves a goal to submit several products to middle- and low-income countries around the world, including Latin American countries Bolivia, Paraguay, Peru, Mexico, and Argentina. We have established a comprehensive donation policy and collaborated with global foundations to support healthcare access initiatives.
Humanizing healthcare means transforming patient care to deliver greater value to families, patients, and society. Especially during the pandemic, we saw the power of the innovative pharmaceutical industry to develop vaccines and solutions that the human race required to move forward and reactivate the key engines of the world. Therefore, we are proud of our initiative's strong connections with third parties, connecting all stakeholders involved in health.
EF: What three pillars would you propose to build a more sustainable healthcare system in Mexico?
RF: Mexico's healthcare system has foundational elements in place, including a solid network of hospitals. Nevertheless, the country lacks healthcare professionals and should pay more attention to population health.
Therefore, the first pillar involves prioritizing healthcare objectives aligned with population needs, whether focused on communicable versus non-communicable diseases, or chronic versus acute conditions; all goals should be interconnected with the country's economic agenda.
The second pillar emphasizes balanced engagement among multiple stakeholders in the healthcare ecosystem, involving the industry, manufacturers of APIs situated in Mexico, retailers and wholesalers, government bodies like COFEPRIS and the Secretary of Health, patients, and healthcare providers. All the interactions in the ecosystem need to be connected to the set priorities to ensure a clear balance of voices.
The third pillar is related to balancing out-of-pocket expenses and reimbursement from the public system. No system that supports 125 million people can only be sustained by public funds, and no healthcare system can be completely private in a country where a large segment of the population has high levels of poverty. Achieving this pillar requires technological solutions, access tools, and partnerships to balance expenses between public and private funds.
EF: Are there any final remarks you would like to deliver to our audience?
RF: In 2024, Teva aims to establish itself as a sustainable market player and execute the shift to our “Pivot to growth” strategy. We plan to expand our presence in vital healthcare sectors and society, emphasizing employee engagement and patient-centric approaches.
In 2023, we were recognized as a “Great Place to Work” in Mexico and Brazil. Moreover, we strive to achieve our objectives ethically and were acknowledged as one of Mexico’s most ethical and compliant companies by Amitai, an independent board evaluating companies across various industries. This recognition validates our commitment to prioritizing patient well-being. We are living according to our values, and ready for the next phase, regardless of what comes to the country and Latin America.
EF: What are you going to celebrate as an achievement at the end of the year?
RF: We will be celebrating our purpose. “We are all in for better health” summarizes the pride I feel about the job we have been doing over the past year. Our motto shows our engagement and that we have the patient at the center. Teva is a sustainably growing business, launching new products with the clear goal of providing better health for the Latin American population. This is the inspiration we live in, and that is what wakes us up every morning.
