The clock is ticking for a Teva plant in Israel that will be closed as part of the drugmakers massive cost-cutting plan. The 175 jobs that will be lost at the plant are a fraction of the 14,000 workers Teva is letting go worldwide.
Teva has struck a 10-year outsourcing deal with Israeli CDMO Rekah Pharmaceutical Industry to produce products now being manufactured at a plant in Ashdod, Rekah Pharmaceutical Industry announced Monday, according to CTech.
Teva declined to comment today.
Teva in April acknowledged that the plant with 175 workers was among those that would be closed in its home country. The facility, which primarily makes IV bags, is slated for closure in the first quarter of 2019 after Teva was unable to find a buyer for it.
Workers protested last year when Teva indicated it would make cuts in the country but the walkouts were unable to save the Ashdod plant or two others in Jerusalem that the company has indicated are not cost-effective. About 1,700 Teva employees in Israel are expected to lose their jobs as part of the reorganization.
Those plants are among about 25 Teva has said it will close this year and 40 that will be closed long term as the generics drugmaker moves forward with a $3 billion cost-cutting plan laid out last year by CEO Kåre Schultz not long after he took over.
Teva has been hit hard by the pricing conundrum in the U.S. generics market, particularly after its $40.5 billion buyout of Allergan’s generics business in 2015. But Schultz assured investors that Teva’s restructuring is “slightly ahead of schedule,” during its second-quarter earnings call this month. The company saw a “significant spend base reduction of over $1 billion” between the first half of this year and last.