V-ECON Audit: Teva Pharmaceuticals

V-ECON Domain Audit: Teva Pharmaceutical Industries Ltd

Audit Scope

This audit examines the economic relationships and market activities of Teva Pharmaceutical Industries Ltd., an Israeli-domiciled pharmaceutical company, within the context of the V-ECON framework.

Supply Chain & Sourcing Relationships

Teva operates as a vertically integrated pharmaceutical manufacturer with global supply chain operations spanning approximately 60 countries. As an Israeli-incorporated entity serving as the global parent company, Teva does not require a separate importer-of-record structure for its own products entering foreign markets, as the Israeli parent entity functions as the originating manufacturer ¹. The company’s supply chain encompasses active pharmaceutical ingredient (API) manufacturing, finished dosage form production, and distribution networks across multiple jurisdictions.

Salomon, Levin & Elstein Ltd. (SLE), a wholly-owned Teva subsidiary, operates as a distribution entity throughout Israel and the Occupied Palestinian Territory ²¹. SLE is listed in the Who Profits database for “Economic Exploitation” and “Palestinian Captive Market,” indicating commercial activity within markets of concern ². This subsidiary represents the primary distribution channel for Teva products within the Israeli domestic market and adjacent territories.

Teva’s manufacturing supply chain includes API production facilities, with the Ramat Hovav facility located in the Negev region serving as a key active pharmaceutical ingredient manufacturing site ³⁴. The company sources raw materials through international procurement networks typical of global pharmaceutical manufacturers, though specific supplier identities and geographic sourcing patterns for agricultural inputs are not applicable given the pharmaceutical manufacturing focus ¹.

Product Origin, Labeling & Regulatory Compliance

Teva’s principal manufacturing sites are located within Israel’s pre-1967 borders, including facilities in Kfar Saba (oral solid dosage), Netanya (R&D and specialty), Petah Tikva, and Ramat Hovav (API manufacturing) ⁵⁴³. No confirmed evidence was found of Teva manufacturing plants located within the West Bank, Jordan Valley, or Golan Heights ¹.

Pharmaceutical products are subject to distinct regulatory frameworks compared to agricultural goods. Pharmaceutical labeling requirements focus on manufacturer site identification and GMP (Good Manufacturing Practice) regulatory registration rather than agricultural country-of-origin rules applicable to produce ¹. No public evidence identified of regulatory enforcement actions against Teva under settlement-origin labeling rules such as EU Interpretative Notice 2015/C 375/05 ¹.

Teva’s corporate labeling and sourcing policies regarding goods from occupied or contested territories were examined. No public evidence identified of a published Teva corporate policy specifically addressing the sourcing or labeling of goods from occupied or contested territories ⁶. The company’s sustainability reporting, including the Healthy Future Report, focuses on environmental impact, access to medicine, and corporate governance rather than territory-specific sourcing disclosures ⁶.

Investment, Capital & Financial Exposure

Teva’s status on the UN OHCHR Settlement Database was examined. Teva is NOT on the current UN OHCHR settlement database, which contained 158 companies in the 2023/2024 update ⁷. A KPMG report confirms Teva “was reportedly included in discussions surrounding a UN blacklist” in 2016 but was not ultimately included on the database ⁷.

The company’s capital structure reflects significant institutional investment. BlackRock holds approximately 5.59% (65M shares) of Teva; Harel Insurance holds 5.34% (62M shares); Phoenix Holdings holds 5.34% ⁸. BlackRock and Fidelity also hold major positions in Elbit Systems, Israel’s largest non-government defense contractor, indicating portfolio-level investment overlap across Israeli corporations ⁹.

Norway’s Government Pension Fund Global (NBIM) maintains investment in Teva. As of June 2025, NBIM remained invested in 44 Israeli companies including Teva; the fund divested from 11 other Israeli companies in August 2025 but Teva was not among the divested entities ¹⁰¹¹.

Ireland’s Strategic Investment Fund has divested from certain Israeli companies with settlement activities (2024), though Teva’s specific inclusion or exclusion status was not explicitly confirmed in available sources ¹². At least one Danish pension fund has excluded Teva due to affiliation with Israel’s military ¹³.

Tax incentive programs represent a significant dimension of Teva’s relationship with the Israeli government. Teva historically received benefits under Israel’s “Approved Enterprise” and “Preferred Enterprise” programs under the Law for the Encouragement of Capital Investments ¹⁴. The 2024 tax settlement with the Israel Tax Authority involved “trapped earnings” from historical tax-exempt status under these regimes, covering taxable years 2008-2020 ¹⁵¹⁶¹⁷. The settlement amount of $750 million is payable in installments during 2024-2029, with additional 5-7% tax on future dividends up to $500 million ¹⁵¹⁶. Teva previously settled an earlier “trapped profits” dispute with the Israel Tax Authority in 2012, involving approximately $718 million ¹⁸.

Operational Presence & Market Activity

Teva’s global corporate headquarters is located in Tel Aviv/Petah Tikva, Israel, with the company’s legal domicile in the State of Israel ⁴. Teva maintains operational manufacturing facilities at 64 Hashikma, Kfar Saba 4450029, Israel, and 5 Base Street, Petah Tikva 49131, Israel ⁵⁴.

The company’s global workforce numbers approximately 37,000-40,000 employees, with the Kfar Saba facility employing approximately 1,200 workers ¹⁹. A labor dispute was declared by Histadrut (Israeli labor union) at the Kfar Saba factory, indicating ongoing employment-related dynamics at this manufacturing location ¹⁹.

Teva’s revenue from Israel is estimated at approximately 2% of global total, representing low hundreds of millions USD annually, reported within the “International Markets” segment ¹. In 20-F filings, Teva describes Israel as its “country of incorporation and principal place of business” ¹.

The company’s relationship with the Israeli Defense Forces has been documented. Teva was recognized by the IDF in 2009 as having an “exemplary” relationship with reservist employees ²⁰²¹. CEO Richard Francis made public statements supporting Israel during the 2023-24 conflict ²⁰²¹.

Corporate Structure & Foundational Ties

Teva traces its origins to 1901, established in Jerusalem as Salomon, Levin, and Elstein Ltd. (wholesale drug distributor) ¹. The “Teva” trademark (Hebrew for “nature”) was adopted in 1935, establishing the brand identity that would eventually become synonymous with Israeli pharmaceutical manufacturing ¹.

The company is incorporated under the laws of the State of Israel and has been continuously Israeli-domiciled throughout its 120+ year history ¹. Ordinary shares trade on the Tel Aviv Stock Exchange (TASE: TEVA); American Depositary Shares trade on the New York Stock Exchange (TEVA) ¹.

Board composition includes 11 directors, all independent except CEO Richard Francis, with 36% female representation ²². Amir Elstein serves as an Independent Director at Teva; he previously served as Chairman of Israel Corporation (2010-2013) ²³. Professor Isaac Ben-Israel served on Teva’s R&D Advisory Board from 2003-2007; he served as Head of Military R&D at the Israel Defense Forces and Ministry of Defense from 1991-1997 and currently heads Tel Aviv University’s Blavatnik Interdisciplinary Cyber Research Center ²⁴.

Government procurement eligibility has been affected by legal proceedings. Canadian government procurement records show Teva USA was added to the Government of Canada Integrity Regime’s ineligible suppliers list in October 2023 due to US DOJ charges, resulting in an 18-month suspension from Canadian federal procurement ²⁵.

Profit Repatriation & Economic Contribution

As an Israeli-domiciled parent entity, Teva’s consolidated global profits accrue to the Israeli parent ¹. Profits generated by foreign subsidiaries in North America, Europe, and other regions consolidate upward to the Israeli parent entity, representing the inverse of foreign-parented companies where profits flow outward from Israeli operations ¹.

The 2024 $750 million tax settlement with the Israel Tax Authority confirms real and material economic flows inward to Israel from global operations ¹⁵¹⁶. The prior 2012 settlement involving approximately $718 million further demonstrates the historical economic relationship between Teva’s global operations and Israeli tax authorities ¹⁸. These settlements relate to “trapped earnings” from historical tax incentive programs, indicating significant accumulated profits that have been repatriated or recognized for Israeli tax purposes ¹⁴.

Teva is recognized as Israel’s largest pharmaceutical company and one of the country’s largest private-sector employers ¹. The company is a constituent of the TA-35 Index on the Tel Aviv Stock Exchange, making it a core component of Israeli equity markets and a significant entity in the country’s financial infrastructure ¹.

The company’s financial capacity has been impacted by major legal liabilities. Teva reached a $4.25 billion settlement of US opioid litigation in 2022, representing one of the largest legal liabilities in its history and affecting the financial capacity of the consolidated Israeli parent entity ¹.

No public evidence identified.

End Notes