Is Puerto Rico the solution to reshoring pharmaceutical and medical equipment manufacturing stateside?
As a territory that has prevailed through natural disasters and uncertainty, Puerto Rico’s resiliency has it positioned to fill the nation’s medical supply chain gaps. The island has long been a leader in the Biosciences sector, 60 years running, and currently leads the nation with the largest amount of pharmaceutical exports by a wide margin nationwide.
President Trump recently issued an executive order directing federal agencies to consider U.S. suppliers for sourcing and ensuring essential medicines are produced domestically, in addition to another order earlier this year to enact the Defense Production Act to promote domestic-specific financing opportunities through the Development Financing Corporation. I join other industry stakeholders on the island in declaring that Puerto Rico, already one of those leading domestic producers, is the solution to reshoring pharmaceutical and medical equipment manufacturing stateside. More than 90 percent of the key ingredients used in generic drugs are made overseas, particularly in China and India.
Bringing pharma and medical device manufacturing jobs back to the U.S. could generate an additional 804,000 jobs and $200 billion in the first year. Prospective companies considering reshoring opportunities are looking for the right facilities, cost-competitive wages, attractive tax incentives packages and the infrastructure necessary for their business to flourish.
Puerto Rico’s unmatched capabilities to address those needs lie in its raw assets, an eager supplier base of Puerto Rican-owned businesses at the ready and a pipeline of talent and experts in STEM fields. The island is also better positioned to get prospects placed faster than any other area in the U.S. More than 50 greenfield, existing and repurposed facilities are actively being shown to interested parties, with fast-tracked FDA approval on standby for pharmaceutical and medical device manufacturing companies. The Puerto Rico Incentives Code (Act 60) also offers attractive incentives such as no federal corporate income tax, flat on-island income tax rates, property and municipality tax exemptions, among other exemptions as it relates to specific investments and activities.
Puerto Rico’s geographic advantage in the heart of the Caribbean is another one of its strengths, able to supply to the U.S in addition to other Latin American and European markets. The air transshipment hub waiver awarded by the federal Department of Transportation in May will allow for ease of transfer for passenger and cargo service, the only area nationwide to achieve this designation. Along with the waiver, Puerto Rico’s Foreign Trade Zones (FTZ) allow manufacturers to ship and import materials directly around the world without added tariffs, taxes or going through the U.S. mainland first, creating more revenue opportunities for businesses. All these offerings are organized and facilitated through Invest Puerto Rico , an economic development and investment promotion entity committed to attracting new business and development to the island, which serves as a business connector and matchmaker for prospects and the public and private sectors. Renewable and sustainable energy partners have been shoring up gaps in the energy production, storage, distribution post Hurricane Maria.
LUMA Energy was just awarded the management of the island’s transmission and distribution assets and solar, wind, biodigestion, hydroelectric and geothermal consultants, contractors and providers are creating microgrids and the power resiliency and redundancy systems companies need. Invest Puerto Rico recently hosted government officials representing the Department of Defense, Environmental Protection Agency, Economic Development Administration and the Development Finance Corporation, among others, to witness firsthand the island’s strengths, talent, and capacity to serve as that national supply chain solution. Holding roundtables, conducting tours of existing and available sites, and providing a space for capital and companies to work together on business partnerships made all it a productive visit.
While these talks will continue, guests left the island with confidence in the case that Puerto Rico is the ideal place to reshore life-critical manufacturing. As we look to the future of Puerto Rico, a shining beacon of opportunity, and the demonstrated excellence in pharma manufacturing and medical device manufacturing, we strive for continued innovation, job creation and accelerated economic growth, and the deserved place to take over the Biosciences world stage.