How does this company make money?
Teva sells generic drugs by the unit to large drug wholesalers — McKesson and AmerisourceBergen — at contracted prices. It also sells specialty drugs, including Copaxone, directly to specialty pharmacies and hospitals. When it licenses its manufacturing technology to regional partners for biosimilar production, it collects licensing fees on top of those sales.
What makes this company hard to replace?
Pharmacy benefit managers who want to swap in a different generic supplier face a 6 to 12 month requalification process required by FDA Orange Book rules. Hospital formulary committees must complete clinical reviews before they can substitute a complex generic like glatiramer acetate. State Medicaid programs lock in their preferred suppliers through annual contracting cycles, so even if a cheaper option appeared, switching would take until the next contract year.
What limits this company?
Teva cannot simply redirect production to a bigger or spare factory when one gets overloaded. Every pairing of a drug and a facility must be separately approved by the FDA, and that process takes 18 to 24 months and cannot be rushed. So the total amount Teva can produce at any moment is capped by the number of pre-approved factory-and-drug combinations already in place — not by how much floor space they own.
What does this company depend on?
Teva cannot operate without FDA ANDA approvals for each generic drug it sells. It relies on active pharmaceutical ingredient suppliers in India and China for raw materials. Its manufacturing facilities in Debrecen, Hungary and Kfar Saba, Israel must hold current Good Manufacturing Practice certification at all times. It also needs European Medicines Agency marketing authorizations to sell across the EU.
Who depends on this company?
CVS Health and Walgreens pharmacies depend on Teva's supply to fill generic prescriptions — a disruption would create shortages on their shelves. Medicare Part D plans rely on low-cost generics like Teva's to keep their drug coverage affordable. Multiple sclerosis patients who use the Copaxone biosimilar depend on consistent supply from Teva's Israeli facility. Amneal Pharmaceuticals uses Teva's contract manufacturing for specific molecules and would lose that production capacity if Teva stopped.
How does this company scale?
Once Teva has built regulatory expertise, filing new ANDA applications and running bioequivalence studies for additional generic drugs is relatively cheap and repeatable. But physical production cannot grow beyond existing certified facilities, because each new drug-factory combination requires 18 to 24 months of separate FDA validation before a single unit can ship. Knowledge scales easily; factory capacity does not.
What external forces can significantly affect this company?
Teva faces large ongoing cash obligations from U.S. opioid litigation settlements. In Europe, government health budgets are under pressure, and authorities are forcing generic drug prices down by mandate. In China, environmental crackdowns periodically disrupt the factories that supply active pharmaceutical ingredients, which raises costs and threatens raw material availability.
Where is this company structurally vulnerable?
If the Kfar Saba facility in Israel failed an FDA inspection and lost its manufacturing certification — or if geopolitical disruption cut off access to the site — Teva could not move glatiramer acetate production anywhere else in time to matter. No other facility holds the product-specific FDA approval, and earning one would take 18 to 24 months. The thing that makes Copaxone defensible is exactly the thing that makes it fragile: the drug and the building are one regulatory unit.
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