Pharma’s Role in Puerto Rico’s Future

Pharmaceutical manufacturing has long played a major role in the economy of Puerto Rico, representing 72.4% of its total exports in 2016, according to the US Bureau of Labor Statistics (1). In 2016, Puerto Rico-based facilities exported $14.5 billion in drug products, 25.5% of the US total and more than the amount of product exported by any US state.

The US territory, which has struggled for years under a heavy debt burden, took another blow on Sept. 20, 2017 when Hurricane Maria knocked out all electrical power and nearly all phone service for the 3.4 million residents. One week after the storm, the power grid, communications, and transportation systems were in ruins. Food, water, medicines, and other living essentials were in short supply. While government agencies and relief organizations initiated humanitarian efforts, pharma companies with facilities on the island assessed the damage to their facilities and contributed to relief efforts (2).

Immediate assessment

AbbVie and Amgen reported minimal damage to facilities, which were running on generators, and were working to restore normal operations. Eli Lilly and Company reported its two manufacturing sites in Puerto Rico had minimal damage, and that operations would not be hindered and there was no supply risk to patients. 

AstraZeneca reported via an emailed statement that it was receiving updates regarding the status of its plant in Canovanas and its employees, but believed that the facility fared well. Bristol-Myers Squibb said the company was evaluating the situation around its pharmaceutical operations, executing contingency plans to mitigate product supply risk, and working to bring operations back online.

As of Sept. 27, 2017, FDA identified more than 40 high-priority drugs where short-term disruptions could lead to shortages. The agency is working with at least five companies impacted by the hurricane to prevent critical shortages of medical products in Puerto Rico and across the United States, including coordinating transport of critical drugs from Puerto Rico.

Long-term impacts

Previously, tax laws that enabled US drug manufacturers to send profits from the island’s manufacturing facilities to parent companies on the mainland without having to pay federal taxes encouraged companies to establish operations in Puerto Rico. Those incentives expired about 10 years ago, leading to the shutdown of some facilities. Some worry that other facilities damaged by the storm may not reopen (3), hindering the island’s physical and financial recovery.

FDA Commissioner Scott Gottlieb expressed similar concerns-in addition to worries about drug shortages-in a Sept. 25, 2017 statement (4). “The island is home to a substantial base of manufacturing for critical medical products that supply the entire world. This industrial base is an important source of jobs and economic vitality for the island. It is a key to Puerto Rico’s economic recovery. The manufacturing facilities are also a pivotal source of critical medical products for the entire United States. Helping to bring these resources back in operation is an important goal of ours and of Puerto Rico’s,” the statement read.

Puerto Rico faces a long, difficult path to recovery. Will Pharma be part of the healing process?

References

1. Bureau of Labor Statistics, Puerto Rico: Price Movements of Top Exports and Other Highlights, accessed Oct. 2, 2017.
2. Pharmaceutical Technology, “Pharma Gives Update on Puerto Rico Manufacturing Operations,” Sept. 28, 2017, accessed Oct. 2, 2017.
3. M.I. Schwartz, Pharmaceutical Manufacturing in Puerto Rico after Maria- Where does it go from here? FDA Law Blog,  (Sept. 28, 2017) accessed Oct. 2, 2017.
4. FDA, Statement from FDA Commissioner Scott Gottlieb, M.D., on FDA actions to bring relief to citizens of Puerto Rico; to help the island recover its considerable and economically vital medical product manufacturing base; and to prevent critical shortages of life-saving drugs made in Puerto Rico, Sept. 25, 2017

Article Details

Pharmaceutical Technology
Vol. 41, No. 10
Page: 12

Citation

When referring to this article, please cite it as R. Peters, “Pharma’s Role in Puerto Rico’s Future," Pharmaceutical Technology 41 (10) 2017.