TEVA Pharmaceuticals Decides Against a Two-Sided Market Strategy

Last week I visited ‘TEVA Israel,’ the Israeli affiliate of TEVA Pharmaceuticals.  Teva is the largest generic drug manufacturer in the world and one of the world’s largest pharmaceutical companies.  They are responsible for 17% of medical scripts written in the US, and its drug Copaxone is the #1 MS drug in the world at $4b in sales/year.  TEVA Israel wants to be the innovation hub for TEVA Global.  As Dr. Roni Sholih put it, “TEVA Israel is an incubator for all of TEVA for finding ways to grow beyond just selling drugs.  If one of our companies grows big enough, then maybe corporate will want to take it to TEVA Global.”

Dr. Shiloh is the head of DDI+ at Teva, which stands for Drug-Drug Interactions Plus. It is a web based solution system for advising physicians how to treat patients consuming multiple medications. Drug-Drug interactions are one of the leading causes of death in the United States, and Teva’s current strategy for DDI+ is for it to be a valuable module within an electric medical record (EMR) system.

As currently positioned, DDI+ will be a one-sided market with TEVA providing doctors with information and doctors sending nothing back to them.  As I listened to Dr. Shiloh speak about the product, I wondered why they weren’t pursuing it as a two-sided market.  As more doctors adopt DDI+, Teva can receive valuable data about when and why doctors still prescribe a medication even when they are advised against mixing it with another drug their patient is taking.  Teva could sell that data to other pharma companies that want to better understand how doctors treat patients. Pharma companies could also use it to improve their ability to recommend drugs based on analyzing the data from DDI+.   With the likelihood of new blockbuster drugs becoming rare, these insights could be more valuable than ever to Pharma companies.  As currently positioned, DDI+ will not capture any of this data.

I assumed that a barrier to positioning DDI+ as a two-sided market was HIPAA regulations.  However, the problem here is not necessary with HIPAA since it would be possible to aggregate the data by removing a patients name, address, patient #, etc.  The concern is that this platform is built to integrate seamlessly into existing EMR systems and EMR systems by their nature are meant to track individual patients.  But wouldn’t existing EMR’s still want to know when and why a doctor who was alerted to a contra-indicated mix of drugs decided to prescribe them anyway?  DDI+ could make this type of reporting a default setting, thereby incentivizing doctors to record and share this data.

Doctors typically have only have 8 minutes to see each patient, leaving little time to research potential undesired consequences related to drug-drug interactions. With its improved user interface and more relevant and personalized data, DDI+ has the potential to both prevent doctors from prescribing contra-indicated drugs and to capture insights about when and why it happens any way.  However, TEVA seems content using it simply as a tool to help them promote their generic drugs.  At least as a one-sided market, DDI+ still has the potential to be an important tool to help doctors keep their patients safe.

Dan Steinberg

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