A year ago at the J.P. Morgan Healthcare Conference, new Teva CEO Kåre Schultz detailed his plan to get the struggling drugmaker back on track. In 2019, he reported that things were playing out as planned—partly thanks to a factor he "couldn’t predict" last year.

That would be the return of some stability in the U.S. generics market, which had been in what Schultz called "a classical negative death spiral of pricing." According to Schultz, "we no longer have this death spiral."

So what happened to turn the tide? Teva "took very precise action," Schultz said, vowing to no longer supply "products below manufacturing costs, products that don’t contribute to our profitability." The Israeli drugmaker also "took a constructive dialogue" with distributors about the "roughly 10% of our portfolio where prices had gone below the reasonable profitability level."

But the company can’t take full credit for the turnaround. "The whole pricing dynamic in the U.S. changed, maybe as a factor of what we did, maybe due to other circumstances. Maybe there was just a new balance," Schultz said.

Either way, Teva is relishing it—and its generics peers are, too. "We’re seeing stability in the generic environment," Endo CEO Paul Campanelli said in his own presentation, pointing to "little movement within the consortiums," which represents "a good thing in particular" for Endo subsidiary Par.

Schultz doesn’t want investors getting too carried away, though. The new normal in the generics world "does not mean that we get back to where we were" before pricing pressure ravaged the industry, he noted: "It just means that this constant reduction of the marketplace has stopped, and that’s of course very important for us."

Meanwhile, the specialty side of Teva’s business will be critical to keeping the company’s revenues on track, too, and on that front Schultz acknowledged that the pharma has faced some skepticism. But "I think we’ve proven that we can do that," he said, pointing to new migraine drug Ajovy—which is capturing 30% of new-to-brand prescriptions—and CNS drug Austedo, which still has plenty of room to grow and is going for a third indication in Tourette syndrome.