Viatris to shut or sell two plants in India as part of global restructuring exercise

Viatris, the offshoot of the merger between Pfizer’s off-patented branded drug division and generic drugmaker Mylan, will be shutting or selling two of its active pharmaceutical ingredient (API) manufacturing plants in India as part of its global restructuring of operations.

The Indian units that will be impacted by the restructuring are Unit 11 in Taloja, near Mumbai, and Unit 12 in Parawada, Visakhapatnam.

A Viatris spokesperson told Moneycontrol that the company is planning to divest Unit 11 in Taloja. “The company has initiated a search for a potential buyer,” the spokesperson said in a statement.

“Following the intended sale, the company’s remaining significant workforce in India will continue to play an important role in the manufacturing of high-quality medicines for the global markets,” the statement added.

Impact on jobs

The company didn’t disclose how many employees would be impacted by rationalisation of the manufacturing network, but said that the workforce reductions at the impacted manufacturing sites are expected to occur in phases over the next few years.

Sources told Moneycontrol that the closure or sale of two Indian plants may not impact jobs in big numbers, as Unit 12 in Visakhapatnam is already shut. The plant in Taloja has limited operations, and not more than 200 jobs will be impacted.

Mylan had acquired the Visakhapatnam plant in 2012 for $32.5 million from Hyderabad-based SMS Pharma, which had built the plant to make products for cancer treatment. Before its closure the plant employed about 250 people.

Overseas closures

Along with the two India plants, Viatris is also selling or shutting down its oral solid dose manufacturing facilities in Morgantown, West Virginia; Baldoyle, Ireland, and Caguas, Puerto Rico.

The restructuring is likely to impact 20 percent (9,000 jobs) of its global workforce of approximately 45,000, Viatris said.

Most of the job losses will be from Morgantown, West Virginia, which is Mylan’s largest manufacturing site. The site has a USFDA warning letter.

While Pfizer’s Upjohn, the off-patent branded drug division, has limited operations in India, Mylan has large manufacturing operations in the country with 21 facilities and 15,000 employees.

India: Mylan’s supply chain backbone

Out of 44 Mylan plants globally, 21 are located in India, making it the backbone of the supply chain.

“Wherever feasible, Viatris will seek to find potential buyers for its facilities in order to preserve as many jobs as possible and will work with impacted communities to identify appropriate potential alternatives,” the company said.

“Any workforce actions the company takes as part of this restructuring initiative will be implemented in a way that is consistent with its long-standing commitment to treating employees fairly and with respect. Viatris is exceptionally grateful for the consistent dedication of its employees around the globe,” the company added.

The company is also committed to ensuring supply continuity so that patients’ needs for critical medicines are met. Supply continuity will be achieved, in some cases, within the company’s network.

Viatris said the restructuring is intended to reduce the company’s cost base by at least $1 billion by the end of 2024 or sooner, with a significant portion of the reduction expected to be achieved within the first two years.

Viatris, in which Pfizer has a 57 percent controlling stake, with Mylan holding the rest, earlier said it would retain the Canonsburg facility in Pennsylvania as one of its three global centres, with the other two in Shanghai and Hyderabad.