The Israeli government is not considering taking punitive measures against the indebted Teva Pharmaceutical Industries Ltd. for its plan to lay off a quarter of its Israeli workforce, according to an official close to Prime Minister Benjamin Netanyahu.
Instead, he will work with the company to reduce the number of layoffs by offering government assistance whenever possible, said the official, who spoke on condition of anonymity because he was not authorized to comment in the registry. He gave no details of possible government assistance, citing a planned meeting between Netanyahu and other senior Israeli officials with Teva CEO Kare Schultz this week.
Some Israeli critics of Teva's cost reduction plan have asked the government to rescind the tax it gives the Israeli-based company Petach Tikva to encourage investment. The pharmaceutical company has received 22 billion shekels ($ 6.3 billion) in tax exemptions since 2006, according to Avi Nissenkorn, the president of the national union of Israel, which leads the fight against local layoffs.
Teva did not immediately respond to a request for comment. The plan to eliminate 1,700 jobs in Israel is part of a broader restructuring program that includes laying off 14,000 employees worldwide and cutting costs by $ 3,000 million over the next two years.
Teva, the world's largest generic manufacturer, struggles to pay $ 35 was supposed to cover the loss of revenue after competitors began selling cheaper copies of Copaxone, the injection of multiple sclerosis that generated a fifth of the company's sales last year. . In contrast, profit margins continue to fall for generic drug makers in the United States, the world's largest market, and Teva cut its profit forecast for the third time in November, pointing to the new competition for Copaxone.
While investors and analysts welcomed the restructuring plan presented by Schultz, the political setback in Israel could undermine the company's efforts. The official said the government understands the company's situation and pointed out that Netanyahu has a free-market approach.