Israel's Teva Sees Eastern Europe Benefits

Israeli generics major Teva is to invest US$100mn on a new manufacturing unit in northeastern Hungary, which is expected to manufacture active ingredients and employ about 100 staff. Meanwhile, the company is studying expanding its relationship with an unnamed local partner. Teva has been present on the Hungarian market since 1993, and purchased local drugmaker Biogal Rt in 1995. The Israeli firm's Hungarian operations posted revenue of US$760mn in 2004, compared to annual turnover of roughly US$150mn at the start of the decade.

The success of Teva's activities in Eastern Europe is somewhat ironic, in view of recent complaints from the Israeli drug industry that multinational sector threats to relocate research efforts to the region owed more to its cost advantages than disagreements over Israel's patent regime. Nevertheless, the firm has clearly been a beneficiary of Hungary's positive operating environment for generics, which is characterised by a strong local manufacturing sector, ready supplies of expertise and the Hungarian government's amenable attitude towards industry interests.