On Thursday, April 3, the Healthcare Club brought Israel Makov to campus to discuss the dramatic growth of Teva Pharmaceutical, Israel’s largest company and the largest generic pharmaceutical company in the world. Mr. Makov focused on his overall strategy as Teva CEO to grow his company through “acquisition and integration.”
Israel Makov described his company’s superior strategy to a diverse group of MBA students, alumni, and Cambridge University students on April 3. Mr. Makov came to Teva in 1995, as the burgeoning company seemed poised to dominate the US generic drug market. As he explained, no one expected the exponential growth that followed in the next decade. Mr. Makov led the company on an aggressive globalization campaign, culminating in his becoming CEO in 2001.
Mr. Makov’s global integration strategy would surely make the RC Strategy Faculty beam. Recognizing the global need for generic drugs outside of the US, he led Teva on a campaign to acquire and integrate dozens of generic manufacturers throughout Europe. He explained: “Our strategy was simple: Be the first to imagine an opportunity, the first to move on that opportunity, and the first to lead the market.” He exploited Teva’s economy of scale advantages while relying on local experts to take generic products to market. “We understood that our resources were global and would help us reduce manufacturing costs and overhead. But our markets were local, and we provided our local managers autonomy.” Mr. Makov’s results speak for themselves: During his tenure, Teva experienced 25% annual sales growth and 33% annual earnings growth, becoming the world’s largest generic pharmaceutical company with almost $10B in sales in 2006.
Mr. Makov’s speech marked one of the most successful Healthcare Club event of the year. Several dozen students and alumni turned out for the speech, including notable professors and Healthcare Initiative Advisory Board members, such as Francois Maisonrouge, senior managing director at Evercore Partners and acquisition adviser to Teva. Several MIT Sloan students also attended, bringing with them 13 visiting students from Cambridge University’s Masters in Bioscience program. Vivek Taparia (NE), summarized the success of the event best: “This has been awesome. I got to listen to one of the most successful pharmaceutical CEOs ever, then I met students from Cambridge and networked with alumni all in the same place.” The event will surely serve as a model for many Healthcare Club speaker events in the future.