Domenic Della Penna began his career as a chartered accountant, but after four years of number crunching with Arthur Andersen, he came to the conclusion that it simply wasn’t for him. He wanted to contribute to a business in a more significant way, but how exactly to do so eluded him—at least for a little while.
It wasn’t until he began pursuing his MBA at York University’s Schulich School of Business that Della Penna uncovered his passion: strategy. In class, he learned about strategic business approaches for helping struggling business environments, and he was hooked. He would go on to pursue his newfound passion in high-ranking positions at iconic, international food and beverage companies, including Cadbury Schweppes, Nestle, and Diageo.
More recently, Della Penna has again found himself in an entirely new business environment: pharmaceuticals. In late 2010, he accepted a position as CFO and vice president of finance for Teva Canada Limited, a subsidiary of Teva Pharmaceuticals—the largest manufacturer of generic drugs in the world. He was willing to make the jump into an unfamiliar market because Teva offered something traditional CFO roles don’t have access to: a business-development team that would report directly to Della Penna. He has been working across the business to vigilantly pursue opportunities and manage costs and risk for the company in its highly regulated industry.
By the Numbers
Prescriptions filled by Teva Canada in 2012
Prescription products offered by Teva Canada
New products launched by Teva Canada in the past 3 years
Pills manufactured/packaged by Teva Canada in 2012
Average percentage reduction in price for generic drugs
“It’s important to me to be an active part of the business, not relegated to just the financial side, and that was something Teva was willing to offer,” Della Penna says. “The pharmaceutical industry is an entirely different animal, and I knew very little about it, but what I did know was business, and I knew I could apply my knowledge wherever I went, no matter the industry. The challenge of jumping into something so unfamiliar didn’t scare me. I rather enjoy learning something different.”
Della Penna’s time with Teva has been challenging because the latest government health-care reforms have reduced reimbursement prices of generic drugs by more than 50 percent over the past few years. Teva’s top line of products has taken a hit while demand—and thus production—continues to grow. To “plug the gap,” as Della Penna puts it, he and his team have divested redundant manufacturing assets and put cost-containment measures in place. He also got Teva to take more steps to ensure the quality of its medicines is never compromised.
Every day that Della Penna enters the office, his mind eventually focuses on one thing: risk management. Generic drugs are highly regulated and are the same as branded drugs in just about every way—except for price. The risks are many and stem from supply-chain interruptions, health inspections, adverse reactions, product recalls, and more. Consumers, inundated by negative press, now tend to assume that pricier brand-name drugs are somehow better or more trustworthy than generic ones, but Della Penna would like to change that assumption.
“Generic drugs are regulated by the same bodies that branded drugs are, and not only that, but the drugs are composed of the same active ingredients and undergo the same manufacturing rules and processes,” he says. “In technical terms, the generic drug must be bioequivalent to the branded drug as determined by Health Canada. The end result is the average price for a generic prescription being $23 and the average price for a branded prescription being $76. It’s important to me that people understand there is virtually no difference between generic and branded drugs. Health Canada mandates that the active ingredient be the same and that it work the same way in the body as the branded drug. People are willing to pay more for their health care because, well, it’s their health—and that’s understandable. But they also have the right to know all of the information so they can make informed decisions for the sake of their health and their pocketbook.”
It still gives Della Penna a chuckle to think about how he spent a bulk of his career at large, branded companies, only to end up at a primarily generic company. (Approximately 20 percent of Teva’s sales in Canada are actually branded.) Despite being so new to the industry, though, the vice president and CFO has made major strides, incorporating four business imperatives that have helped steer the company and that act as a compass for his staff: driving business performance, creating and sustaining an energized culture, using technology as an enabler, and embracing process and organizational effectiveness.
“We were too busy looking at tasks and not meaningful outcomes,” Della Penna says. “We were inwardly focused and not acting as business partners. Now we have a strategic blueprint that our team can reevaluate each year. We’ve made huge strides, but there’s still a lot of work to be done, and I’m committed to continuing this four-pillar journey.”