Puerto Rico’s pharmaceutical industry faces post-Maria uphill battle
Monday, October 02, 2017
Procter & Gamble, Johnson & Johnson, Eli Lily, Pfizer, GlaxoSmithKline, Merck, Novartis. These are just a few of the 89 approved pharmaceutical companies using Puerto Rico as a manufacturing hub.
In fact, 16 of the top 20 most popular drugs in the U.S. are manufactured in Puerto Rico. The island has a $60 billion pharmaceutical industry infrastructure with more than 50 plants operating there. In 2016, 72 percent of Puerto Rico's exports were pharmaceutical — valued at $14.5 billion.
After Hurricane Maria slammed the island, we've been left to speculate on the immediate present and future of the industry amid general infrastructure devastation and recovery efforts. It is rumored that power will not be back on until December for most of the island, creating an uphill battle for the industry overall.
What happens when such a prominent industry hub undergoes manufacturing paralysis due to unpredictable weather events? We are in the throes of learning about this now. Puerto Rico's appeal to Big Pharma has been due to original 1970s tax incentives, geographical proximity to the U.S. mainland, and a highly respected and educated workforce with an accumulated four decades of Food and Drug Administration (FDA) experience.
Recently, FDA Commissioner Scott Gottlieb visited Puerto Rico with Homeland Security officials to assess damages. The FDA then released a statement acknowledging potential critical drug shortages if recovery is slow and production is obstructed.
The FDA is monitoring 40 drugs of special concern — 13 of which are made only in Puerto Rico. Although specific drugs haven't been named, critical drugs include high cholesterol, cancer and HIV treatments, immunosuppressants and medical devices.
One possible solution is to shift production to the U.S. mainland. But given that Big Pharma provides 30 percent of the island's gross domestic product, this kind of move will have massive economic impacts for years to come.
Whether the industry can weather the storm's aftermath or even return to its former glory is inimically linked to Puerto Rico's overall positive recovery status. Due to general power shortages, USA Today has reported that most of the pharmaceutical plants operations have been idled. If plants are running, it's largely because of generators.
Some companies are directly addressing Maria's impact and the drug shortage issue in the media, while others, like Johnson & Johnson, are not answering media questions at this time.
Johnson & Johnson has seven plants operating in Puerto Rico, and its Lifescan products are manufactured at a plant in Aguadilla, which is a town that the Puerto Rico officials claim has been unreachable. The company has not return media calls regarding the status of its plants, and a perusal of its website does not reveal any hurricane references.
Other companies — Pfizer and Eli Lily — have been more forthcoming with the media and public about plants operations in Puerto Rico. AstraZeneca, maker of top-selling anti-cholesterol drug Crestor, has reasserted its commitment to doing business on the island. A company spokesperson states that the facility "fared well" given the magnitude of the hurricane, yet they are still undergoing a formal assessment of the site.
Merck reports the same status as AstraZeneca, while we can receive direct news from Amgen's website about the company's $5 million pledge to help hurricane recovery efforts. Amgen sets a good standard both for being forthcoming with information (as drug shortages can be critical health issues for many) and with its charitable contributions to recovery and long-term rebuilding efforts.
Baxter International Inc., which manufactures sodium chloride and dextrose used to mix or compound medications, has been proactive with its communications with customers — sending them a letter warning of "multiple days of production" lost.
After Hurricane Irma hit, the Pharmaceutical Industry Association of Puerto Rico reported that many companies donated money and products to hurricane victims. However, there is no similar organizational update regarding what companies are doing to address the horrific impact of Maria.
Hurricane Maria's effects are so far-reaching that it is still difficult to attain reliable information on its toll and the inevitable drug supply-side issues. Of top priority is for companies to reach 90,000 Puerto Rican Big Pharma workers to ensure their safety and whereabouts, and assess their ability to return to work.
As time goes on, more companies are releasing production information and are donating to the island's ongoing post-Maria recovery efforts. The picture is changing daily, so we will surely know more soon about critical drug shortages and public health on the island.
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