One in every 13 prescriptions in the US is a generic from Teva. Now, CEO Richard Francis is focusing on drug development, delivering better medications faster.
This transcript has been edited for clarity.
John Whyte, MD, MPH: Leading the charge towards a healthier future requires vision, bold ideas, and the courage to innovate. Richard Francis, the CEO of Teva Pharmaceuticals, is redefining what it means to lead in both generic drugs as well as new drug development. He talks about this need to pivot to growth, a strategy that is transforming his company.
I recently traveled to sit down with Richard to learn about his new vision for Teva, his thoughts on what the real impact of AI on drug development will be, in addition to his belief that the adoption of biosimilars will accelerate. He also explained how sports has impacted his leadership style. It's all about the talent.
Well, Richard, thanks for joining me today.
Richard Francis: It's great to be here, John.
Whyte: Teva traditionally is thought of as a generics company, at least historically. Yet you've been focused on innovation and growth, and you even have a phrase for it, this pivot to growth strategy. So I have to ask, why the pivot?
Francis: Well, firstly, thanks for asking because it's an important question. And I do want to say, Teva has a very big tradition and legacy in generics. We're very proud of that. I think one in 13 scripts in the United States is one of our generic medicines, so we're the cornerstone of health. But we're also a company capable of great innovation. And we've had that in the past with the product for multiple sclerosis called copaxone, which is an amazing drug, helped many patients and still does today.
But we have this capability. And the pivot to growth is about getting Teva back to growth after a number of years of decline. Part of the opportunity we see is this rich pipeline we have that, if we focus on it and apply resources to it, then we can bring those products to the market. And that will be something that really drives sustainable growth for the long term.
So it is something we've always had. And I think if we're successful, I'd like to think that people say, “Teva is an amazing pharmaceutical company that happens to have a world-class generics company and a world-class innovative business.”
Whyte: As part of this pivot strategy, you have these pillars. Can you talk a little bit about them?
Francis: Yes. So when I came into the company, it was clear that wanting to get the company back to growth is more than a tagline, pivot to growth. So there's got to be something of substance that we can really direct the organization. And by the way, we had 6 years of decline of revenue. So to go back to growth was a challenge and a big challenge.
And so when we put the strategy together, pivot to growth, we really wanted to know what we needed to focus on. And that's where the four pillars come in. So pillar 1 was simply deliver on our growth engines. And our growth engines are our innovative products — Austedo, Ajovy, and Uzedy: Austedo for tardive dyskinesia and Huntington's disease, Ajovy for migraine, and Uzedy for schizophrenia. So that's pillar 1. So what does that mean is we need to put resources and build capability to maximize those products.
Pillar 2 was step up innovation, going back to your opening question around, are we generics company or are we innovative? So the innovative pipeline we had here, I came in and I sat down with Dr. Eric Hughes, our head of R&D, and he showed me our pipeline. And I went, wow, this would be a cool pipeline in any innovative company.
Whyte: Because you feel there can be both. There can be generics and innovation.
Francis: Absolutely. Absolutely. And I think there are certain synergies that can actually help. Generics can be helped by innovation and vice versa. And on this step-up innovation, which is pillar 2, it was, how do we get this pipeline to the market, to the patients, who need it as fast as possible? So that was sort of pillar 2, because it had been under-resourced in the past. So we hadn't given it the money or the capability or the focus.
And then pillar 3, which goes back to this sort of a company that does both, how do we create a sustainable generics business that can grow long term? And what do we need to make that happen? And then the final pillar was focus the business. And that's really about how do we allocate resources and capital and management time and focus. Because having any sort of strategy is relatively easy, but executing it requires focus, attention, week in, week out.
Whyte: You can't talk about innovation nowadays and not talk about AI and digital tools. So where do you feel that AI and digital tools are going to help you innovate? What's their role? Are we going to repurpose drugs with new indications? Are we going to find new molecular entities? Are we going to shorten that time course for clinical trial? Where do you see the role of AI and innovation? And what are you doing today.
Francis: Well, exactly. So I would say all of the above. But some are going to have more traction sooner than later. I think all of the things you said are possible, but they're not going to happen immediately. For example, at Teva, getting products to the market quickly is important, because we're quite a big company, but it's important that we don't waste resources. And if you're taking a long time to bring a product to market, it consumes a lot of money and a lot of capital, a lot of time. So we want to shorten that.
And so I think we're becoming a bit brave at leading into AI. And I'll give you an example in development. We did a partnership with a company called Biologic Design, who developed an antibody completely with AI. Never made it. So did it on the computer. Incredible. And now we're taking that, we're making the antibody, and we'll move it into the clinic.
And normally, from the time of designing your first antibody to move into clinic, it takes about 4 years, having a candidate. We've reduced that to 2 years. So we've shaved that time off. We've done that. And that product will be going into the clinic in the next year. So that, it's a real-life example. So that shows you how AI is helping.
But I think on the rest, we're using it probably more practically at Teva now. When it comes to making sure we're making the right thing at the right time, carrying the right inventory, we're starting to use AI to that, because the complexity in that is huge. And that's what AI can really help.
Whyte: Now, you've talked about in the press that we need to accelerate drug development. And you've commented on it earlier. So I want to ask you if we say in general, from the time of drug discovery to drug approval might be 10-15 years. So, Richard, what's the right number? What should that time frame be? What do you want to get it to?
Francis: Well, I think, once again, going back to the fact that we want to make sure we're bringing products to the market that are efficacious and safe, and we know what they do, and we know what patients/people we should be giving them to. I think that's the goal. I do think it needs to be reduced.
Some of that is about how quickly we can do clinical studies, the appropriate clinical studies and the appropriate population. Some of that's about making sure the regulatory authorities, including the FDA, can actually process that information in a timely manner. And I think if you work on just those two aspects, which are pretty big aspects, we can condense the time. And then the discovery—
Whyte: To what? What would it ideally be for you?
Francis: Look I mean, I think I've never really actually thought about that: What would be ideal. I think for me knowing that we're I think, at the forefront of some major breakthroughs in medicine and treating people with new modalities and targets, I'd like to think it gets easily below 10 years. But then there's another part of that, which I think is important, which I can talk about with Teva.
You're talking about innovation. But on the generic side, some of the products take a very long time to get to market because, unfortunately, they don't have the same pressures from the regulatory authorities to push them through. And so you'll have situations where a generic medicine could be brought to the market many, many years quicker than it actually does because of some of the processes in the regulatory authorities.
And the reason why that's important is when the generic product comes to the market, the cost goes down, access for patients goes up, out-of-pocket probably goes down. And having generic medicine is important because it drives the next level of innovation, because you have to innovate, you have to, you're forced to.
Whyte: I want to turn to biosimilars. And Teva has expressed an interest in biosimilars. Yet there hasn't been the adoption that many people thought there would be when we first started talking about biosimilars. And I talked to you about before. We were talking about biosimilars when I was at FDA. While back, there were challenges there in helping prescribers understand what's a biosimilar. They're not a generic. And here you are, known traditionally, historically, as a generics company. Now we're talking about biosimilars. What do you see as the biggest challenges for more global adoption of biosimilars?
Francis: I think it's a great question. And let me ground you in a couple of facts that I find interesting. Firstly, in Europe, the adoption is incredibly high and incredibly quick. Now part of that is because the health systems they have there, where it can be one payer, and so that drives through the adoption quickly. And it restricts the use of the patented product. So it's almost—
Whyte: It's also this issue of interchangeability, getting a little into the weeds.
Francis: Exactly. Whereas in Europe, they don't have that issue, they just said everything is interchangeable. It's a fact. So I think there's an education maybe that's required and maybe a knowledge lag in the United States versus Europe, where as physicians start to see the data, they realize actually these biosimilars, I can use them in the patients that I currently use, the innovator brand, and I can do that with confidence.
And once the patients understand that and the pharmacists understand that, then you see traction. And if you see some of the earlier biosimilars launched in the US, the adoption has been significant and very high. But we're at the start of that journey. And as more biosimilars get launched, we're seeing more and more—
Whyte: But we've been talking about it for more than a decade.
Francis: But now the big wave is coming. So the big wave of the big products, like the biosimilar Humira that have come out, the biosimilar Stelara, Prolia.
Whyte: So you think that's going to change?
Francis: I do. And the reason why I think it's going to change, ultimately, is because as we drive this innovation, this incredible innovation in science and in new therapies, the ability to save money on what is now older innovation allows you to balance the books. So as we have biosimilars, the price of these drugs goes down. That frees up budget to start allocating to these new drugs that have come out, which can take levels of efficacy and treatment to a new level. So it's a really great ecosystem.
So I think when physicians and payers start to see that, they say “Actually this is a great opportunity.” And when you look at some of the vertically integrated health systems in the US like Kaiser Permanente, they switch everything. As soon as there's a biosimilar, they switch everything. They save a lot of money.
Whyte: But they're a controlled pharmacy.
Francis: Exactly. But what I was saying is, because they own from start to finish, they understand they've got one budget; and they don't restrict the innovative therapies. They're still using those very well, because they're thinking about the benefit to the budget.
But here's an interesting fact as well, which I think is learned in Europe, and particularly in the UK. When biosimilar was introduced in Europe, in the UK, for conditions like rheumatoid arthritis, what happened over a relatively short period of time, people got a biologic to treat rheumatoid arthritis quite late in their disease. And so there's quite significant joint damage.
Now 10 years later, as biosimilars have been out for these biologics, people have been treated way earlier in their disease, thus preventing joint damage and replacements that are required in knees and hips. So that shows because the cost has come down, these can be accessed by patients a lot earlier in their treatment, in their disease.
Whyte: You have some core therapeutic areas, and you've alluded to them when you mentioned the drugs, in the field of immunology, in the field of neuroscience, which I'm particularly interested in hearing your thoughts on. You've chosen diseases like Huntington's disease, schizophrenia, conditions that we often don't hear enough about. But we know there is great need. But they're not typically the ones that get a lot of press, the cardiovascular drugs and some others. So why this core therapeutic area for Teva?
Francis: Well, one is we have a rich history. I mean, Teva is 125 years old, but we've had a big neuroscience sort of capability for many years. I mean, obviously, copaxone came out of that to treat multiple sclerosis with neurologists. And so it's a core competency we have.
And if you think about the next big frontiers we have to tackle, it is around neuroscience, it is around Alzheimer's, Parkinson's, dementia, schizophrenia, bipolar, depression, many of these — Huntington's disease, tardive dyskinesia, migraine. This is a big undertreated population. And so for us, with our capability, this is a passion we have and it's a capability we have.
So yes, they're probably not the, I suppose, the cool things that everybody's talking about. But they mean a lot to me. I mean, unfortunately, my mother suffered from Alzheimer's. So for me, as I see an aging population, I see more and more people needing more and more research and development to go into neuroscience. And then when I think about schizophrenic patients, people with bipolar, these are very difficult conditions. And I think there hasn't been enough research being put into this.
Whyte: Now, I don't want anyone watching the interview to think that somehow you're abandoning generics, because you're not. You have other areas of innovation that you want to explore. And you recently announced that you're going to create a generic version of Victoza GLP-1 drug. So I want you to prognosticate a little and tell our audience whether you think we'll still be talking about GLP-1s in 3 years.
We're going to be talking about them for the next year. But what about in 3 years, will something else be coming along? Will there be a different drug discovery? Right now, that's what people often are talking about.
Francis: So firstly, I'm proud to say, is we did launch our first generic GLP-1 in June, and we'll be launching another one next year. The great thing about that is we're giving access to GLP-1s to a lower cost therapy of GLP-1s immediately. So I think that's a really good thing. That's what Teva does, going back to this sort of generic powerhouse that we are.
But to answer, will we be talking about GLP-1s in 3 years’ time, that's a really, really good question because, obviously, they're developing quickly, the GLP-1s, from injectables to orals. But there's other targets, other modalities that are coming out. So I think if you look at all the research going on, there could be other targets, other modalities, where which could surpass the GLP-1s.
But we'll have to wait and see. That's the great thing about innovation and science. It moves so fast, and it's moving faster than it's ever done. So we'll have to wait and see. Maybe we meet in 3 years time and we'll have that discussion.
Whyte: We'll find out. Now part of this interview series is about leadership. And leadership is also about style — how you motivate your colleagues, how you motivate your team. And you and I were talking about you're a big sports fan, particularly football, the soccer version in the UK.
You talk about the role of talent, and I've read some of your interviews about the need for talent in the workforce. Talk to us about your focus on talent and that's your strategy for success.
Francis: Yeah. So this is really, really important to me. And it's really important to Teva. And so this always feels a bit sort of cliche. People are the most important thing in a company. And I'll tell you why. Because people discover drugs. People make drugs. People sell drugs. Everything about a company is down to the quality of its people.
And we forget that sometimes. And I think when I've reflected back on my career and I look at the moments where I was part of something very special, I remember all the people that were part of it. When I look back and remember those parts, which didn't go as well, I remember the people. Everything happens because of people. Great things happen because of people.
And so when that epiphany happens, I mean, a number of years ago, I realized the most important job as a leader is to make sure we have the right people, in the right place, with the right culture surrounding them to allow them to be the best versions of themselves they can be. Because that makes a huge difference. When I think about the transformation we've seen in 2 years at Teva, it's the ability that we've had to make sure we have talent that's been at Teva for a long time, in the right position, given the right support, given the right training, given the right accountability and freedom to operate within those clear goals and objectives. And amazing things happen.
Now we can get lost in strategy. We can get lost in Gantt charts, spreadsheets. But the most important thing is the people. And another thing that I think we've done at Teva that I think is part of my leadership philosophy is complete transparency. So we talk to everybody in the company. There is no currency of information here. We tell—
Whyte: What does that mean?
Francis: So it means that—
Whyte: Give us a practical example.
Francis: Here's the thing. I realized that we often say, “Well, can we tell people this? I mean, this isn't so good, or we've got to do this.” And many, many years ago, somebody said to me, Richard, people's lives at home often are a lot more difficult than this. I said, what do you mean? I said, people have tragedies at home. They have marriages, divorces, they have ill health. They have their children can become ill. They are adults. They've lived a life many of them. So you can talk to them just honestly and openly, and they'll value that.
So when I heard that, I just thought we just tell everybody exactly as it is. We have good times. We have good times. When we have things we have to do, we explain why we have to do them, why this may be a difficult time, but we do it in complete transparency. When people know they've been spoken to with honesty, transparency, and the full picture, they feel part of something, they feel empowered, and they feel trusted.
And once again, that's something I've learned. So transparency to me is, there's not one version of it, but it's complete. And I think we've done that. And then the pivot to growth, this, as much as we talk about it in a very nice, friendly way here, it's been a radical change in this company, a radical change. So I think for me, people are really important. But then the culture and the transparency you put around those… and the focus on leadership, we have five principles here at Teva.
Whyte: Tell us then.
Francis: And this is funny because you're never going to find these in a book, any of these big books or—
Whyte: I didn't see them on any wall yet as I walk through.
Francis: No, you may actually at some point. But what I'm saying is, when I tell you them, you're going to go, “These are super basic.” And they are. But the reason we developed them were we think leadership is about some basic things done day in and day out consistently.
So one of them is you set clear objectives and goals. Pretty obvious. But when people know exactly what's expected of them, when, then they feel reassured. OK, I know what's expected of me.
Whyte: And goals are hard to create. They have to be measurable. Everyone doesn't do that.
Francis: Exactly, they don't do that. So you sit down and take the time. The second one, which I like, is we just make it happen. Make it happen. Don't talk about it. Don't have another meeting about it. Don't do a PowerPoint.
Whyte: Is what it says, “Make it happen”?
Francis: Yeah. Make it happen. I don't care what the font is on a slide. I don't care whether the color coding is right. I don't care about that. I care about maybe the content or what you're trying to do. Just make it happen. Don't debate. Don't procrastinate. Just make it happen. And we say when you do that, it may not always go well, but just make it happen. We'll learn.
Third one is it's about the enterprise. It's about the company. It's not about any individual. It's not about any function, any department. We're here for the company. If the company does well, we'll help more patients. We'll help the society, and we'll help ourselves.
The fourth one is be humble. This is not a hierarchical company. We must treat everybody with respect. There is no ego. We're a team. We have just different roles and responsibilities, that's all. And the fifth one, which I think is really important, which is inspire and motivate. And particularly as leaders, but all of us must understand that, particularly when things are tough, instead of maybe walking past somebody or having that difficult meeting about a tough situation, our job is to inspire and motivate people that it is possible. Things are possible in the good times and the bad.
So I think for me those five are very simplistic. But when we communicate them to the employees, I think the great thing was, regardless of what language they said, “Those are pretty obvious.” And they are. But now we've got to live up to them. And so often you'll hear people in meetings going, guys, “we've just got to make this happen.” Or if something doesn't happen: Well, was that a clear goal there?
And then the thing that I really like about Teva is we are humble. We're not big corner office people. We're not flash. And that's a really special place because I think we have an egalitarian approach here. There's an equality which you rarely see. And I want to capture that because that creates more of a team. We probably have more impact as a company than companies way bigger than us, because we're more united.
Whyte: Has your leadership style changed over the past decade? Are you different today in how you lead than where you were 10 years ago?
Francis: Yes, definitely. Absolutely. Crikey, I was thinking 10 years ago, where was I?
Whyte: How is it different? What have you learned over those years?
Francis: Well, look I mean, experience is a wonderful thing, because you just learn a lot, good and bad. And I think what I've understood is the impact you can have as a leader, both good and bad. You really can. And I think I've learned as much from… I've had some amazing leaders I've worked with, and I've had some who are great people, but just weren't amazing leaders.
And you see the impact that those two different styles and capabilities can have an organization. And so for me, I've realized the influence I can have, both good and bad, and how if you really, really focus on it and understand it, the good you can have on helping people be the best versions of themselves, making sure people are in the right roles with the right support is huge.
Whyte: This series is about change makers. And here you are changing essentially the focus of a company and how they're having this pivot to growth. So I want to end and ask kind of your reflection on what you think is that biggest challenge over the next year to this pivot to growth strategy. Because when we've been looking at change makers, this is a real change that you've created and you have to sustain.
Francis: Now you're making me nervous.
Whyte: What's that biggest challenge? And there are multiple challenges. There's changing economic environments. There's changing geopolitical landscapes. But what's that biggest challenge that Richard Francis is going to focus on over the next year to make sure you continue to be that change maker?
Francis: Wow. That's a really good question. So I think the area that we really need to focus on here — so in the 2 years, we've been driving this strategy, the change has been night and day. I mean, it's extraordinary that we're having this conversation about innovation and then generics. We're having this conversation about declining to growing. We're having this many discussions about what's happened and rating agencies. Everything's changed and—
Whyte: You're a change agent.
Francis: So that's amazing. So the one thing that I talk to the team about is we must not measure ourselves on what we've accomplished in the past because we’ve got to set our sights even higher and higher. And I think the one thing that for me is that we've got to make sure our ambition up because clearly, I think we've achieved a lot in the last 2 years.
And as I always say to my team, we need to be better in '25 than we were in '24. I need to be a better CEO in '25 than '24, and an even better one in '26. I have to constantly evolve. We as a company have to constantly evolve.
Now, the challenge of that, when we've had such a dramatic change in performance is, do we get complacent, or do we just think it's going to happen because we've got momentum? And I always say to people, your ambition will either stretch you or limit you. And I said so that we must pick our ambition very carefully where we want to be in '25, '26, and '27 because it needs to stretch us, because it could really limit us.
So I think for me, it's how do we build on the great work we've done, how do we keep aligning to the principles of transparency, putting the focus on the people, communicating what we've achieved with our pivot to growth, what we need to achieve. And how do we keep doing that with the same momentum, the same energy, knowing that it's very hard? And people do get tired and exhausted. How can we keep to that fifth leadership principle, inspire and motivate them. Now this is another year we're going to achieve something even more amazing.
To take it back to soccer or football. You don't want to be a one-season winning team. You want to do it season on, season on, season on. And I think that requires a special culture. But I do believe we're building that special culture here. It's not going to be easy. But hey, if it was, then any company would do it.
Whyte: Well, Richard, thanks for sharing your vision today.
Francis: It's been a real pleasure, John. Really, really enjoyed talking to you.
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