<SEC-DOCUMENT>0001193125-20-173767.txt : 20200812
<SEC-HEADER>0001193125-20-173767.hdr.sgml : 20200812
<ACCEPTANCE-DATETIME>20200619132932
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-20-173767
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20200619

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TEVA PHARMACEUTICAL INDUSTRIES LTD
		CENTRAL INDEX KEY:			0000818686
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			L3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		5 BAZEL ST
		STREET 2:		P O B 3190
		CITY:			PETACH TIKVA
		STATE:			L3
		ZIP:			49131
		BUSINESS PHONE:		9729267267

	MAIL ADDRESS:	
		STREET 1:		TEVA PHARMACEUTICAL INDUSTRIES LIMITED
		STREET 2:		5 BAZEL ST PO B 3190
		CITY:			PETACH TIKVA
		STATE:			L3
		ZIP:			49131
</SEC-HEADER>
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<TYPE>CORRESP
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">June&nbsp;19, 2020 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Attn: Division of Corporation Finance,
Office of Life Sciences </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Ibolya Ignat&nbsp;&amp; Mr.&nbsp;Franklin Wyman </P>
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<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top" ALIGN="center"><B>Re:</B></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Teva Pharmaceutical Industries Limited</B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2019</B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>filed February&nbsp;21, 2020 (the &#147;<U>2019 Form <FONT STYLE="white-space:nowrap">10-K</FONT></U>&#148;)</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman"><B><U>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-16174</FONT></U></B></P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms.&nbsp;Ignat&nbsp;&amp; Mr.&nbsp;Wyman: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:9%; font-size:10pt; font-family:Times New Roman">On behalf of Teva Pharmaceutical Industries Limited (&#147;Teva&#148; or the &#147;Company&#148;), set forth below is Teva&#146;s response to
the comment of the staff (the &#147;Staff&#148;) of the Securities and Exchange Commission (&#147;SEC&#148;) contained in your letter dated March&nbsp;31, 2020 to Eli Kalif, Teva&#146;s Chief Financial Officer, which response documents the outcome
of discussions between the Staff and the Company on May&nbsp;26, 2020 and June&nbsp;16, 2020 regarding such comment letter and the Company&#146;s initial response letter dated April&nbsp;17, 2020. We appreciate the Staff&#146;s discussions with the
Company, which assisted the Company to better understand the Staff&#146;s position. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:9%; font-size:10pt; font-family:Times New Roman">For your ease of reference, we have set forth below
the Staff&#146;s comment in italics, followed by Teva&#146;s response thereto. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal
Year Ended December&nbsp;31, 2019 </I></B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><I><U>Consolidated Financial Statements </U></I></B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Note 11 &#150; Legal settlements and loss contingencies, page 145: </U></I></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>1.</I></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><I>During 2019, you recorded an expense of $1,178&nbsp;million in legal settlement and loss contingencies
&#147;mainly related to an estimated settlement provision recorded in connection with the remaining opioid cases,&#148; of which $646&nbsp;million was recorded in the second quarter and $468&nbsp;million was recorded in the third quarter. Please
describe for us the methods and key assumptions used to calculate these loss provisions, particularly the factors that you considered in distinguishing between opioid cases deemed to be probable or not probable. In addition, provide us the following
information in your response. </I></P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>For the $646</I><I></I><I>&nbsp;million loss provision, quantify the specific amounts associated with the
Oklahoma litigation, as well as the general loss provision for &#147;a portion of opioid related</I><I> cases as probable&#148; based on this settlement.</I> </P></TD></TR></TABLE>
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<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>For the $468</I><I></I><I>&nbsp;million loss provision, quantify the specific amounts associated with the
settlement with &#147;two plaintiffs in the MDL Opioid Proceeding&#148; and the agreement in principle with North Carolina, Pennsylvania, Tennessee and Texas, as well as the general loss provision for &#147;more likely&#148; opioid-related cases
based on these settlements.</I> </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>&#149;</I></TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>Explain the factors considered in determining the timing for recognition of these two opioid loss provisions.
</I></P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>Quantify for us your range reasonably possible losses related to your opioid exposure, and explain why you did
not disclose such range pursuant to ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">450-20-50-4.</FONT></FONT></FONT> </I> </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><I>&#149;</I></TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>Explain the terms, obligations and rights associated with the nationwide settlement framework and how you
expect this arrangement to operate in future periods, particularly the expected timing for recognition of costs associated with your provision of up to $23&nbsp;billion of sublingual tablets and up to $250&nbsp;million of cash payments over a <FONT
STYLE="white-space:nowrap">ten-year</FONT> period. </I></P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt"><I>Describe your expected accounting treatment for each element of this nationwide settlement framework. Refer us
to the applicable authoritative accounting guidance.</I> </P></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I>Response: </I>The range of reasonably possible losses referenced in Note 11
to the Consolidated Financial Statements in the Company&#146;s 2019 Form <FONT STYLE="white-space:nowrap">10-K</FONT> referenced in the comment above only covers a situation in which a settlement framework was achieved. An upper end of the range
could not be established if the settlement framework agreement is not completed in its current form for the entirety of the State Attorney General litigation with respect to such matters.</P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Following the filing of the Company&#146;s 2019 Form <FONT STYLE="white-space:nowrap">10-K,</FONT> this range of outcomes has materially narrowed and now
represents the Company&#146;s most reasonable estimate. Assuming no significant changes in facts and circumstances, the Company will modify its disclosure in future filings to further clarify incorporating the changes set forth in Exhibit A hereto
in the Company&#146;s contingencies disclosure. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">* * * * * * </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Should any member of the Staff have any questions or comments concerning this letter, please do not hesitate
to call me. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Very Truly Yours, </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Eli Kalif</P></TD></TR>
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<TD VALIGN="top">Eli Kalif</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Executive Vice President, Chief Financial Officer</TD></TR>
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<TD VALIGN="top">Teva Pharmaceutical Industries Limited</TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">cc: </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Mr.&nbsp;David Stark,
Executive Vice President, Chief Legal Officer, Teva </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Deborah Griffin, Senior Vice President, Chief Accounting Officer, Teva </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Mr.&nbsp;Ross&nbsp;M. Leff, Esq., Kirkland&nbsp;&amp; Ellis LLP </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right"><B>Exhibit A </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Proposed Revision to Commitments and contingencies note </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Since May 2014, more than 2,900 complaints have been filed with respect to opioid sales and distribution against various Teva affiliates, along with several
other pharmaceutical companies, by a number of cities, counties, states, other governmental agencies, tribes and private plaintiffs (including various putative class actions of individuals) in both state and federal courts. Most of the federal cases
have been consolidated into a multidistrict litigation in the Northern District of Ohio (&#147;MDL Opioid Proceeding&#148;) and many of the cases filed in state court have been removed to federal court and consolidated into the MDL Opioid
Proceeding. Other cases remain pending in various states. In some jurisdictions, such as Illinois, New York, Pennsylvania, South Carolina, Texas, Utah and West Virginia, certain state court cases have been transferred to a single court within their
respective state court systems for coordinated pretrial proceedings. Complaints asserting claims under similar provisions of different state law, generally contend that the defendants allegedly engaged in improper marketing and distribution of
opioids, including ACTIQ<SUP STYLE="font-size:85%; vertical-align:top">&reg;</SUP> and FENTORA<SUP STYLE="font-size:85%; vertical-align:top">&reg;</SUP>. The complaints also assert claims related to Teva&#146;s generic opioid products. In addition,
personal injury plaintiffs, including various putative class actions of individuals, have asserted personal injury and wrongful death claims. Furthermore, approximately 600 complaints have named Anda, Inc. (and other distributors and manufacturers)
alleging that Anda failed to develop and implement systems sufficient to identify suspicious orders of opioid products and prevent the abuse and diversion of such products to individuals who used them for other than legitimate medical purposes.
Plaintiffs seek a variety of remedies, including restitution, civil penalties, disgorgement of profits, treble damages, attorneys&#146; fees and injunctive relief. Certain plaintiffs assert that the measure of damages is the entirety of the costs
associated with addressing the abuse of opioids and opioid addiction and certain plaintiffs specify multiple billions of dollars in the aggregate as alleged damages. In many of these cases, plaintiffs are seeking joint and several damages among all
defendants. <STRIKE>An adverse resolution of any of these lawsuits or investigations may involve large monetary penalties, damages, and/or other forms of monetary and <FONT STYLE="white-space:nowrap">non-monetary</FONT> relief and could have a
material and adverse effect on Teva&#146;s reputation, business, results of operations and cash flows.</STRIKE> Absent resolutions, trials are expected to proceed in several states in 2020 and 2021. A court in New York had set a date, for a
liability trial only, to start in March 2020. However, that trial has been postponed due to the impact of <FONT STYLE="white-space:nowrap">COVID-19.</FONT> A new trial date has not been set. It is also anticipated that a court in California may
reset a trial date, most recently scheduled for June 2020, to the second half of 2020. It is difficult to predict when or if trials will occur in 2020 given the current impact of <FONT STYLE="white-space:nowrap">COVID-19</FONT> on the United States
and the U.S. judicial system. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In May 2019, Teva settled the Oklahoma litigation brought by the Oklahoma Attorney General (State of Oklahoma, ex. rel.
Mike Hunter, Attorney General of Oklahoma vs. Purdue Pharma L.P., et. al.) for $85&nbsp;million. The settlement did not include any admission of violation of law for any of the claims or allegations made. As the Company demonstrated a willingness to
settle part of the litigation, for accounting purposes, management considered a portion of opioid-related cases as probable and, as such, recorded an estimated provision in the second quarter of 2019. Given the relatively early stage of the cases,
management viewed no amount within the range to be the most likely outcome. Therefore, management recorded a provision for the reasonably estimable minimum amount in the assessed range for such opioid-related cases in accordance with Accounting
Standards Codification 450 &#147;Accounting for Contingencies.&#148; </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On October&nbsp;21, 2019, Teva reached a settlement with the two plaintiffs in the MDL Opioid Proceeding
that was scheduled for trial for the Track One case, Cuyahoga and Summit Counties of Ohio. Under the terms of the settlement, Teva will provide the two counties with opioid treatment medication, buprenorphine naloxone (sublingual tablets), known by
the brand name Suboxone<SUP STYLE="font-size:85%; vertical-align:top">&reg;</SUP>, with a value of $25&nbsp;million at wholesale acquisition cost and distributed over three years to help in the care and treatment of people suffering from addiction,
and a cash payment in the amount of $20&nbsp;million, to be paid in four payments over three years. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Also on October&nbsp;21, 2019, Teva and certain other
defendants reached an agreement in principle with a group of Attorneys General from North Carolina, Pennsylvania, Tennessee and Texas for a nationwide settlement framework <U>(&#147;the framework&#148;)</U>. The framework is designed to provide a
mechanism by which the Company attempts to seek resolution of remaining potential and pending opioid claims by both the U.S. states and political subdivisions (i.e., counties, tribes and other plaintiffs) thereof. Under this
<U>framework</U><STRIKE>agreement</STRIKE>, Teva would provide buprenorphine naloxone (sublingual tablets) with an estimated value of up to approximately $23&nbsp;billion at wholesale acquisition cost over a ten year period. In addition, Teva would
also provide cash payments of up to $250&nbsp;million over a ten year period. The Company cannot predict if the nationwide settlement framework will be finalized. Following these developments, the Company considered a range of potential settlement
outcomes. <FONT STYLE="font-family:Times New Roman"><U STYLE="border-bottom:1pt double; padding-bottom:1pt"></U></FONT><FONT STYLE="font-family:Times New Roman"><U>The current provision is a reasonable estimate of the ultimate costs if the
nationwide settlement framework is finalized in its current form.&nbsp;However, if not finalized in its current form for the entirety of the State AG cases, a reasonable upper end of a range of loss cannot be determined.</U> </FONT><FONT
STYLE="font-family:Times New Roman"><U STYLE="border-bottom:1pt double; padding-bottom:1pt"></U></FONT><FONT STYLE="font-family:Times New Roman"><U STYLE="border-bottom:1pt double; padding-bottom:1pt">An adverse resolution of any of these lawsuits
or investigations may involve large monetary penalties, damages, and/or other forms of monetary and non-monetary relief and could have a material and adverse effect on Teva&#146;s reputation, business, results of operations and cash flows.</U>
<STRIKE>No single outcome in the range was considered to be more likely than any other outcome; accordingly, in the third quarter of 2019, Teva accrued to the new low end of the range, resulting in an increase in
Teva</STRIKE><STRIKE>&#146;</STRIKE><STRIKE>s previously recorded estimated liability. There was no change in this estimate in the first quarter of 2020. </STRIKE> </FONT></P>
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