The Cowboy Of Generic Drugs

A review of Yossi Goldstein's "Eli Hurvitz and the Creation of Teva Pharmaceuticals"

The other customers at SuperPharm were beginning to stare.

During my recent stay in Israel, I developed what can only be described as the world's most boring obsession: methodically photographing medicine shelves at SuperPharm (think Israeli CVS, but with more arguing about prices). I had been photographing medicine boxes for the better part of half an hour, picking up each package, examining it for a particular logo, then carefully documenting the label while maintaining what I hoped was the casual demeanor of someone who definitely wasn't conducting industrial espionage.

I was hunting for a drug called "Optalgin" - the ubiquitous Israeli painkiller - because I'd just finished reading about a man who turned dishwashing into a generic drugs giant, and I wanted to see if his products were still on the shelves. This is the kind of thing that happens when you read business biographies for fun—you develop weird obsessions and convince yourself that hunting for fifty-year-old aspirin brands constitutes legitimate research.

Yossi Goldstein’s "Eli Hurvitz and the Creation of Teva Pharmaceuticals" is ostensibly the story of how a kibbutznik-turned-dishwasher built one of the world's largest generic drug companies. But it's really a case study in something more interesting: what happens when someone has an unusually high tolerance for acting on incomplete information.

Most business biographies follow a familiar template: visionary sees opportunity, overcomes obstacles, builds empire, retires wealthy. Hurvitz's story fits this pattern superficially, but the details are weird enough to make you wonder whether successful entrepreneurship is less about having good ideas and more about having a fundamentally different relationship with uncertainty.

How Growing Up During National Formation Calibrates Your Risk Tolerance Differently Than Normal

The book's account of Hurvitz's upbringing reads like someone took every possible Israeli founding myth and decided to see if they could all happen to the same guy.

His parents met in what may be the most Israeli way possible: his father caught malaria while draining swamps in the Hula Valley. The fever was so severe that, as the biography delicately puts it, "one day, feverish and disoriented, Zvi scrambled up a tall eucalyptus tree and refused to come down." One of the spectators watching this fever-induced tree climbing was Zippora, who "quickly fell in love with the sick young man."

This is apparently how pharmaceutical dynasties begin.

By the time young Eli reached adolescence, Israel was fighting for independence and he was running clandestine radio operations from his bathroom, where Haganah radio equipment was "constantly being shuttled from place to place" to avoid detection. At 16, he lied about his age to join the Haganah because he wanted to fight alongside his classmates—a decision that would prove formative in ways that extend far beyond youthful patriotism.

Later, he helped found Kibbutz Tel Katzir near the Galilee, which involved farming next to the Syrian border where snipers would take potshots at agricultural workers. Hurvitz's solution to being shot at while plowing was characteristically cavalier: jump off the moving tractor and run alongside it, steering with one hand while using the tractor as a shield.

"If your steering was off," he later recalled, "you had no choice but to jump back onto the tractor. This was an uncomfortable situation, as changing directions in the unwieldy vehicle required stopping, and it was clear that the Syrians would fire on you in the process. But what else could you do? You couldn't leave the tractor there."

Reading this, you start to understand how someone might develop an unusual relationship with risk assessment. If you've spent your teenage years dodging sniper fire while steering farm equipment, conventional business risks probably seem manageable by comparison.

But by the early 1950s, kibbutz idealism was wearing thin. Friends were leaving for the city, collectivist economics were proving frustrating, and his wife Dalia's heart condition provided the excuse they needed to escape to the capitalist world. When Hurvitz approached his father-in-law for a job at Assia Laboratories, he was offered a comfortable administrative position—the kind of role befitting an economics graduate and family member.

His response was to politely decline and ask if he could wash dishes instead.

When Choosing Information Access Over Status Signals Turns Out to Be Surprisingly Effective

This seems insane until you understand the reasoning. Hurvitz had correctly intuited that washing laboratory glassware would give him access to every aspect of the company's operations in a way that a desk job never could. While handling the equipment, he could observe production processes, understand material flows, and discover inefficiencies that management couldn't see from their offices.

More importantly, he understood something about organizational dynamics that most people miss: authority flows to whoever understands the system best, not whoever has the fanciest title. By positioning himself at the center of laboratory operations, he could learn everything while appearing non-threatening to existing power structures.

The strategy worked spectacularly. Within months, Hurvitz had identified that Assia was profitable despite having no clear understanding of what anything cost to produce. Management was running a pharmaceutical company on pure intuition, like a restaurant that never checks food costs.

When they asked him to develop a pricing methodology, his response revealed the mindset that would define his career: "I would sit down, take everything I learned about pricing, and try to construct a method capable of accurately computing the cost." Notice the confidence embedded in that statement—not "I'll try to figure this out" but "I'll construct a method." The assumption that complex problems have solutions if you're willing to build them from scratch.

This pattern—accepting short-term disadvantage for long-term positioning—shows up repeatedly throughout his career:

ELI: Hey, why aren't we doing [insert audacious business scheme]?

MANAGEMENT: That sounds risky/impossible/insane...

ELI: Too bad. I already started doing it

MANAGEMENT: Aw man! Aw shucks! Ya got us again, Eli!

His philosophy was simple: "Authority is not given, authority is taken... Responsibility is not divided. There is no such thing as: 'I'll share the responsibility with you.' That's just nonsense. Either I take responsibility, or you do."

That Time Eli Solved Currency Devaluation by Trading Pharmaceuticals for Nuts (And Other Shenanagins)

Eli's first glimpse of what we might now call "thinking outside the box" came when Turkish currency devaluation made pharmaceutical exports unprofitable. Management wanted to abandon the market entirely. Hurvitz had a different idea: if Turkish money was worthless, why get paid in Turkish money?

He engineered an elaborate three-country barter scheme that reads like something from a different era of international commerce: Assia would trade pharmaceuticals to Turkey for nuts, then sell the nuts to America through a Greek middleman who happened to be pro-Israel (because the Middle East in the 1950s was small enough that everyone knew everyone's political affiliations).

The insight was elegant: "I was convinced that we could not continue exporting on such terms. I proposed a barter transaction that enabled us to use the system's folly to our advantage." Instead of accepting the system's constraints, he found a way to profit from its inefficiencies.

The nut arbitrage generated more profit than a straightforward sale would have, becoming "the most profitable deal in the company's history at the time." But the real value wasn't the immediate profit—it was proving that supposedly intractable problems often have creative solutions if you're willing to ignore conventional wisdom about how business "should" work.

Another wild scheme of Eli’s that Goldstein highlights is his adventures of selling drugs in post-colonial Africa. When Hurvitz, at the tender age of twenty four, proposed to Assia’s board about developing pharmaceutical sales in Africa in the 1960s, the objections were entirely reasonable. African countries had limited purchasing power, nightmarish logistics, and uncertain regulatory environments. Management's skepticism made perfect sense.

Hurvitz's response was to book a flight to Nigeria before getting final approval.

What makes it instructive is what happened once he arrived. Instead of working through established British distributors who had been operating there for decades, Hurvitz rented vans and drove into remote areas to sell medicines directly to local pharmacists.

This revealed something remarkable: British companies were taking a year to deliver what Assia could deliver in a week. When Hurvitz's colleague promised one-week delivery, the local pharmacist's reaction was "You are like God!"

The success came from discovering that established companies were providing spectacularly poor service despite having every conceivable advantage. Within a few years, Assia controlled over 50% of Nigeria's pharmaceutical market through mobile pharmacy vans—a distribution model that nobody else had thought to try.

The broader insight: if your competitors take a year to deliver what you can deliver in a week, you will win. The fact that established British companies had somehow missed this basic principle suggests either spectacular incompetence or that colonial business practices weren't optimized for customer satisfaction.

How to Execute Israel's First Hostile Takeover When Your Collateral Is a Two-Room Apartment

By age 27, Hurvitz had become Assia's most important executive despite holding no official title. And despite his early successes in his first years at Assia, Israel's tiny domestic market was rapidly becoming a constraint. Pharmaceutical companies had to expand aggressively through acquisitions and exports, or risk being acquired themselves.

The obvious target was Teva Pharmaceutical Industries, which had better products than Assia, and this drove Hurvitz quietly crazy.

Teva had been founded in the 1930s by Gunther Friedlander and his aunt Elsa Kuver, German-Jewish refugees who'd built it into one of Israel's more successful pharmaceutical companies despite what would become obvious management problems. Although they had superior products and better market positioning than Assia, Teva's profits were less than one-tenth of Assia's. The company hadn't paid dividends in years, employees weren't always paid on time, and the Jerusalem plant was deteriorating.

Yet Friedlander refused all merger discussions because he viewed Teva not as "a tradable pharmaceutical company that may or may not be profitable" but as "an idea, a dream, and a vision."

Hurvitz's solution was to engineer one of Israel's first major hostile corporate takeovers, which required navigating complex political and financial relationships in a country where everyone knew everyone else's business. The book's account of this process reads like a comedy of errors that somehow worked.

The breakthrough came when Hurvitz convinced Alfred Feuchtwanger, Friedlander's banker relative, to sell his one-third stake for above-market prices. But Hurvitz still needed a bank guarantee for one million Israeli pounds by end of day, or political pressure would kill the deal.

When Bank Leumi refused to help, Hurvitz noticed something useful about Israeli business geography: the Industrial Development Bank was just two floors above the Export Bank in the same building. Rather than travel across town to find financing, he simply went downstairs.

"Zalman," he told Export Bank's Zalman Shoval, "I have a one of a kind story to tell you. If you join me, I'll build a small business and you'll be able to claim a great deal of credit. If you don't, we'll try elsewhere."

Shoval's decision to provide the guarantee despite Hurvitz's net worth consisting entirely of a two-room apartment reveals something fascinating about 1960s Israeli banking: major financial decisions were made based on character assessment rather than sophisticated risk analysis. The entire acquisition hinged on one young banker's gut feeling about whether Hurvitz seemed trustworthy.

Acquiring Teva meant dealing with 220 striking employees who were convinced that Tel Aviv-based Assia would shut down their Jerusalem facility. When advisors warned Hurvitz not to face the striking workers gathered outside the bank, he wilfully ignored their pleas: "Tomorrow they will be working for me. I'm walking out the front door."

What followed was probably the most Israeli corporate negotiation in history: Hurvitz standing on a Jerusalem street, surrounded by dozens of worried employees, calmly fielding questions about job security while passersby wondered what was happening.

When one employee was particularly confrontational, Hurvitz's response was resolute: "Don't tell me your name. I don't want to remember it. Remember one thing: you will never be my boss, but it is 100% certain that I will be your boss, so behave accordingly."

"They looked as if they were going to faint when I said that," he later recalled.

The workers asked practical questions. Would he promise not to fire anyone? No, but he'd work with their committee to identify necessary changes and provide generous severance. Would he open a company preschool?

"You don't have a preschool today, so why are you asking me for one? You can ask me if I would be willing to consider the needs of the employees and open a preschool. We'll look into the matter and we'll open a preschool if possible. If it is the right thing for us to do, we'll open one. It depends on how many hours you work."

When the meeting ended, the workers had signed an agreement to return to work. Hurvitz had executed a hostile takeover simply by being more reasonable and practical than anyone expected.

How the Arab Economic Boycott Accidentally Created the World's Best Generic Drug Company

With Teva acquired, Hurvitz controlled the foundation of what would become a sophisticated operation built around exploiting intellectual property loopholes.

The Arab world’s boycott of Israel since its independence had created an unintended consequence: Western pharmaceutical companies often didn't bother patenting their drugs in Israel to avoid complicating relationships with Arab customers. This meant Israeli companies could legally manufacture "generic" versions of drugs still under patent everywhere else in the world.

The Nitrovin case illustrates how this worked. When Assia started manufacturing the drug because of "improper patent registration," American Cyanamid's Israeli attorney called Hurvitz at midnight in a panic. Instead of apologizing, Hurvitz proposed that American Cyanamid make Assia their global supplier since Assia could manufacture the drug more cheaply than the original developer.

American Cyanamid agreed, provided Assia could deliver 50 kilograms within two months as proof of concept. This was ambitious since Assia had never produced even one kilogram commercially, but they delivered on schedule.

Then there's the Penbritin story, which demonstrates the hilarious complexity of Israeli patent law. When British pharmaceutical giant Beecham refused to market their leading antibiotic in Israel (to avoid Arab boycott complications), Hurvitz sued them for a "compulsory license."

Israeli law allowed companies to manufacture patented drugs if they could prove the patent holder was refusing to serve Israeli markets for non-commercial reasons. If you possessed knowledge to manufacture a life-saving drug, but refused to make it available in Israel for political reasons, courts could compel licensing in exchange for reasonable royalties.

Assia won. Hurvitz's post-victory negotiation with Beecham reveals his approach to these situations: "Your packaging has a reputation in Israel. We won't change the packaging, but we will change the name a bit. Your product is called Penibrin. We'll call ours Penbritin so that the public understands that it is the same medication."

This pattern—finding legal ways to manufacture drugs unavailable in Israel due to boycott politics—became Teva's core competency. For decades, while competitors focused on traditional R&D, Teva accumulated reverse-engineering expertise that nobody else thought was valuable - until American drug policy changed everything.

The payoff came with the Hatch-Waxman Act of 1984, which streamlined generic drug approvals in America. Suddenly, Teva was perfectly positioned. While other companies waited for patents to expire then scrambled to develop generic formulations from scratch, Teva already had decades of chemistry knowledge. They'd been legally copying drugs since the 1960s and had mastered the synthesis processes.

More importantly, they'd learned to challenge patents systematically. In the nabumetone case, Teva's researchers discovered that GlaxoSmithKline's patent was invalid because the active ingredient had been discovered in 1973, almost a decade before GSK filed their patent. Teva developed a generic, won FDA approval, received six months of market exclusivity, and when GSK sued, won in appeals court.

The deeper insight: generic manufacturing wasn't actually a commodity business—it was a scale business disguised as a commodity business. Each individual generic drug was commoditized, but managing portfolios of hundreds of generic products across multiple regulatory environments required operational sophistication that most companies couldn't replicate.

The Arab boycott meant to strangle Israeli companies had accidentally created the world's most sophisticated generic drug manufacturer.

The Multiple Sclerosis Drug That Nobody Could Draw the Chemical Structure Of (And How It Got FDA Approval Anyway)

The deal that truly transformed Teva came from scientists who were trying to give laboratory animals multiple sclerosis and accidentally discovered a treatment instead.

In the 1960s, researchers at the Weizmann Institute led by Michael Sela were studying multiple sclerosis by creating MS-like conditions in lab animals using a synthetic polymer called "Cop-1." The idea was straightforward: if you could reliably cause MS symptoms in healthy animals, you could study the disease mechanism and test potential treatments.

Instead, to their complete bewilderment, Cop-1 prevented MS symptoms entirely.

This was pharmaceutical serendipity of the highest order—they were trying to cause a disease and accidentally discovered a breakthrough treatment of it. The mainstream research approach focused on stopping immune systems from attacking myelin sheaths around nerve cells. Sela's team had a different idea that was "so simplistic in concept that the entire establishment ridiculed it": create a "decoy target" that would distract immune cells from attacking real nerve tissue.

After 16 years of animal testing, they had proof that Cop-1 could delay and sometimes suppress MS symptoms. Even more mysteriously, the drug seemed to provide transferable immunity—treated animals could somehow pass protection to untreated animals, which nobody could explain.

The clinical trial results were remarkable. In the double-blind study of 48 MS patients, 56% of those receiving Cop-1 experienced no attacks over two years, compared to only 26% in the placebo group. The drug was effective and had essentially zero side effects—which is almost unheard of in pharmaceutical development.

After Sela presented these results at Hurvitz's home one evening—complete with slide show over coffee—Hurvitz made the decision that would define the rest of his career. Despite "substantial opposition" from his board, who were understandably skeptical about betting the company on a drug whose molecular structure was unknown, he called it "an opportunity of a lifetime for Teva."

There was just one problem: nobody could figure out what Cop-1 actually was. Unlike every drug previously approved by the FDA, "it was impossible to draw a picture depicting the chemical structure of Cop-1." The synthetic mixture consisted of molecules of various lengths, and every attempt to identify a single molecular structure failed.

This created an unprecedented regulatory problem. The FDA's approval process depends on something called Chemical Manufacturing Controls (CMC)—basically proving you know exactly what your drug is and can manufacture it consistently. When you can't even draw your molecule, this becomes philosophically challenging. Every major pharmaceutical company that examined Cop-1 concluded it was "unmanufacturable as a drug and unapprovable by the FDA."

The FDA approval process required unprecedented creativity. Since normal quality control methods couldn't work without knowing the molecular structure, Teva had to invent entirely new approaches to manufacturing validation. They essentially had to convince the FDA to approve a drug based on its effects rather than its chemistry; which is like asking a restaurant inspector to approve a dish without being allowed to examine the recipe, ingredients, or cooking process - just the final taste. The gambit worked; and on June 19, 1996, the FDA advisory committee unanimously recommended approval.

When Copaxone launched in April 1997, Hurvitz had cautiously projected sales might reach $200 million annually. By 2009, it was generating $3 billion per year—Teva's most profitable product and the most successful drug ever developed in Israel, administered to over 200,000 MS patients worldwide.

What All This Pharmaceutical Stuff Actually Tells Us About How Things Get Built (A Meditation That Will Almost Certainly Devolve Into Inspirational Platitudes About Courage)

By the time Hurvitz stepped down as CEO in the early 2000s, Teva had become the world's largest generic drug manufacturer, with operations in 60 countries. From a small Israeli company that couldn't always pay its employees on time, he'd built a pharmaceutical giant manufacturing over 1,000 different generic drugs while simultaneously developing breakthrough treatments like Copaxone—a dual capability almost unprecedented in pharmaceuticals. When he finally retired, he'd transformed a dishwashing job into a $15 billion corporation and proven that a small country under economic boycott could build a company sophisticated enough to outmaneuver the world's largest pharmaceutical corporations.

Goldstein's account of Eli Hurvitz’s life has one particular takeaway that’s sat with me since I finished reading: exceptional business success often comes from consistently doing obvious things that other people avoid because they're difficult, uncomfortable, or uncertain. Hurvitz's achievements weren't exactly the result of secret knowledge—but instead had compounded from his consistent choosing action over analysis.

Granted, the book’s reading of Hurvitz is in a success story dialect tinged with what we might call "prophetic perfect tense"—every decision framed as obviously correct, every risk as calculated genius. Goldstein himself worried about writing "hymns of praise" for a "less flawless protagonist"—then proceeded to do exactly that, as reviewers noted. We don't hear about pharmaceutical executives who made similar bets and lost everything.

But what makes Hurvitz’s story compelling - the kind of thing that makes you put down whatever you’re reading and sit quietly for a while - starts with all our elaborate theories about entrepreneurial excellence. We’ve built mythologies around “agency” and “reality distortion fields” and “disruptive thinking,” sophisticated frameworks to explain why some people change the world and others don’t. These frameworks are really just ways of avoiding what we already know.

When you strip away all the business school analysis, what remains is profound: Eli Hurvitz was exceptionally brave. The rare kind of brave that fixes what's broken in the world, even when the work isn't sexy. A man with no technical background washed laboratory glassware until he understood how medicines were made. Washed. With his hands, in soapy water, until the knowledge soaked into him like light through glass. He drove into Nigerian villages to ask pharmacists what they actually needed. He stood before 220 frightened workers whose livelihoods hung on his words. For fifty years he chose solving problems over promoting himself, as if there were no other way to live. Reading his story reminds me that all our theories about leadership are just elaborate ways of avoiding one truth we can barely name: the world belongs to the brave.