One Aspiration Is Not Enough

Lisa Graver’s deft decision-making is helping Alvogen succeed on multiple fronts

Lisa Graver had worked as in-house legal counsel on pharmaceutical intellectual property (IP) matters for nearly a decade by 2010. She had developed tremendous expertise in the field, but she was driven to find an environment where she could assume a broader role, contribute more directly to developing strategy, and have more extensive ownership of overall business results.

Alvogen—the generic pharmaceutical developer, manufacturer, and distributor—provided her with the perfect opportunity. She joined the company as vice president, IP, and has risen to president with overall responsibility for its US business. She has worked with founder Robert Wessman to build the team, grow the company, and diversify its portfolio. What began as a team of one hundred, including manufacturing staff, has grown to about 2,800 worldwide, with 480 employees in the United States.

Lisa Graver, Alvogen

Alvogen’s growth has occurred in spite of extensive consolidation throughout the generic drug manufacturing sector and distribution channel. This consolidation has resulted in downward pricing and profitability pressures at the manufacturer level. The same dynamics have also impacted the wholesale level, even with roughly 90 percent of the wholesale channel being controlled by only three major players.

“Most companies did not foresee the full impact of the drug channel consolidation dynamics that came into play when we began,” Graver says. “But the majority of our growth has been organic and driven by first-to-market opportunities. So, we’ve been relatively insulated from price deflation compared to others that have been extensively involved in M&A activity.”

Graver’s steadfast leadership in uncertain times has been noticed by her industry peers and business partners. “Lisa has a brilliant legal mind and has no equal when it comes to patent and regulatory analysis,” says Jim Veltrop, managing partner of Axinn, Veltrop & Harkrider LLP. “But what really sets her apart is her ability to cut through all that and to visualize, adopt, execute, and stand behind a business strategy that makes the most sense for her company.”

The company’s effective growth strategy was developed by inviting input from all functional areas within the company. These contributions help to build comprehensive models that test assumptions and justify either moving forward with or walking away from a given opportunity.

“We don’t consider ourselves smarter than anyone else, but we are disciplined and creative in our approach,” Graver says. “Even when the results look good on paper, we still develop a risk-weighted process that takes the management team’s collective experience into account. With so much input to draw from to challenge our intentions, we’ve been successful at developing relatively accurate models that tell the real story. That doesn’t mean we don’t take chances, but that the risks we take are very calculated.” That approach has resulted in several notable successes. Specifically, Alvogen recognized the opportunity for litigation that led to a precedent-setting decision in the Federal Circuit court, the highest level for IP cases. By successfully challenging the IP protection of Tamiflu before its patent expired, the company was able to commercialize oseltamivir phosphate, the first Tamiflu generic equivalent. This enabled the company to have the only generic product in the leading prescription flu treatment market for most of the 2016/2017 flu season.

“We’re always looking for unique ways to identify products that will be profitable and sustainable,” Graver says. “With oseltamivir phosphate, we knew we had a unique strategy that would be breaking new ground.”

The search for new products and channels comes at a time when FDA processes and roles in the generic market are changing. Recent adjustments that are seen favorably by the industry were made to the Generic Drug User Fee Act (GDUFA), which was established in 2012 to make safe and effective generic drugs available to the public more quickly.

GDUFA was intended to make the timelines for reviewing generic drug applications more consistent and predictable. Previously, it was not uncommon for some applications to still be pending after more than five years of review. The time frame, in most cases, has now been reduced to a range of about 15–24 months, depending on the quality of the application and whether patent litigation may be involved.

As part of the changing regulatory environment, Graver is adapting how Alvogen presents applications for product approval.

“Beyond the data, we have to be sure we’re really educating regulators and telling the best possible story as to why our product should be approved,” she says. “Doing that successfully is a factor of both language and science, especially in areas where no other generics have yet to be approved.”

She believes this is particularly important in categories involving highly complex and unique molecules, such as biosimilars—generic versions of biologic medications.

This type of highly evolved science and business strategy is exactly what Graver envisioned when she joined Alvogen. She describes the company’s early days as an entrepreneurial adventure that involved a small but highly motivated, dedicated, and passionate seed team.

“We all shared the goal of wanting to start something from the ground up and to work with Robert, who had a track record of building successful pharmaceutical companies very quickly,” Graver says. “I thrive on uncertainty, so it was very exciting to be persevering together as a team while we waited for approvals and to have that first product in the market we could put our name on.”

As Graver continues to focus on diversification, Alvogen is one of the few pharmaceutical companies that continues to add staff to its workforce. That is largely due to her determination to bring in expertise that will help differentiate its lines of business and enable the company to leverage sectors that go beyond its traditional focus.

“My goal is always to be driving for the next thing that will contribute to making the Alvogen name grow,” she says. “After all, one aspiration is great, but it’s not enough.”

The Drug Price Challenge

A report by QuintilesIMS, an industry research firm, found that in 2016, after accounting for discounts and rebates paid by manufacturers, drug spending increased by nearly 5 percent. Generic drugs accounted for about 89 percent of prescriptions dispensed that year but were responsible for only about 26 percent of the costs.

The challenge for Alvogen, as with other generic companies, is how to continue to satisfy the demand for low-cost, critical medicines while maintaining a sustainable business model. Lisa Graver believes that the company’s tradition of creativity, discipline, and ability to manage uncertainty will position it well to seize the opportunity.