UPDATED: Teva reneges on its proposal to build a $141M API plant in India

The plan by Teva Pharmaceutical Industries ($TEVA) to cut $2 billion-plus in costs leans heavily on making its manufacturing and supply chain more efficient. That restructuring has led it to back out on a new active pharmaceutical ingredient (API) facility it was going to build in India.

Last year, the company put a $6.5 million deposit down for a site in the special economic zone (SEZ) in Pithampur near Indore, according to Pharmaceutical and Medical Packaging News. It intended to invest 872.5 crore ($141 million) on a facility that eventually would have employed 560. But Manish Singh, an official with the company developing the SEZ, told PMPNews.com that Teva has asked for its money back. He said Teva will have to forfeit some of the deposit to cover costs already incurred, an amount that is still being calculated.

In a statement emailed to FiercePharmaManufacturing, spokeswoman Denise Bradley said, "Given recent changes in market conditions and after a careful review of its long-term plans, Teva has decided that it will not need additional capacity represented by this site and will therefore not develop the Pithampur site further."

The company announced in October it would lay off about 5,000 employees, 10% of its workforce, by the end of next year and bank $2 billion in savings before the end of 2017. The cuts were announced shortly before CEO Jeremy Levin moved on after disagreements with the board, but the company has said it is generally following the Levin blueprint. Teva faces the expiration next May of the patent on its foundational product, multiple sclerosis drug Copaxone.

When the restructuring was initially laid out last year, Levin tasked Carlo De Notaristefani, president of global operations, with finding $1 billion in "efficiencies" in sourcing and manufacturing, in part by making the manufacturing and procurement of APIs more efficient. The company, which now buys from thousands of suppliers, will partner with some and eliminate others to drive a harder bargain and lower its costs of goods. It also said it expected to move its manufacturing network to lower-cost countries.

The India project is not the only one underway that Teva has abandoned because of the cost-cutting. The company last year halted a $300 million warehouse and IT center it had announced for the Philadelphia area.

- read the PMPNews.com story