Puerto Rico’s single largest and most important export isn’t rum or sugar cane. It’s pharmaceuticals— the prescription drugs we all count on being there when we need them.
Spurred by a favorable U.S. tax code provision, the 1970s witnessed nearly all of America’s largest pharmaceutical companies investing billions of dollars in drug manufacturing facilities in Puerto Rico. And while that tax break expired in 2006, pharmaceutical manufacturing remains big business on the island. How big? To be precise, the pharmaceutical manufacturing sector accounts for 25% of PR’s entire GDP, and the island is the point of origin of about 25% of America’s pharmaceutical exports to the rest of the world.
Or, rather, it was big — before Hurricane Maria devastated the island.
At this moment we don’t know much about the fates of those manufacturing facilities. Some pharmaceutical companies, such as the American biotechnology giant, Amgen (which describes its Puerto Rico facility as its “flagship manufacturing site”), have issued rosy assessments — but ones that are freighted enough with waffle-words to suggest considerable uncertainty:
"The Company's preliminary assessment is that the critical manufacturing areas in our facility in Juncos, Puerto Rico, have not been significantly impacted by this storm," said Esteban Santos, executive vice president of Operations at Amgen. "We expect to maintain our long-term track record of reliably supplying our patients with the medicines they need."
Having completed an initial review of the storm's impact, the Company reaffirms its 2017 guidance. No product nor in-process inventory has been lost, and consistent with the Company's long-standing practices, the inventory maintained by the Company and its global distribution network is sufficient to meet patient demand. Amgen has back-up generators powering the site and is working diligently with hundreds of its staff onsite to return its operations in Puerto Rico to normal as quickly as possible. In addition, the Company has manufacturing capacity at other sites around the world.
Amgen is one of the world’s most successful biotech companies, and is the sole source of important drugs that help cancer patients recover from the rigors of chemotherapy — drugs like Aranesp, Neupogen, Neulasta, and Epogen. So far, financial markets seem to be buying its assurances: the company’s stock price has not tanked. But personally I’m skeptical, given what we know about the scope of the destruction across Puerto Rico.
Other companies, such as Baxter International, seem to be preparing their customers for bad news. Baxter is one of the world’s leading producers of IV transfusion fluids such as saline and dextrose solutions — drugs that were already in short supply before Maria hit:
Drug and hospital-product manufacturer Baxter International Inc. says it has lost "multiple production days" in hurricane-wracked Puerto Rico that will delay its ability to restore shipments of two products that were already in short supply on the U.S. mainland.
The products -- dextrose and sodium chloride, also known as saline -- are intravenous fluids given to hospital patients. The company disclosed the delays in a Sept. 22 letter to U.S. hospitals and other customers, saying Baxter was still assessing hurricane-related damage to its facilities.
U.S. hospitals already have been grappling with shortages of the drugs due to manufacturing problems and other issues unrelated to the hurricanes.
In May, Baxter said the Justice Department's antitrust division was investigating shortages of IV solutions including saline, as well as manufacturing, selling and pricing of the products. Baxter said at the time it was cooperating with the investigation, and that it responsibly priced the products and was making efforts to help ensure the continuity of supply.
Still other companies, like Astrazeneca, appear to have some serious exposure here (its leading cholesterol-lowering drug, Crestor, is manufactured exclusively in Puerto Rico). The company doesn’t sound like it knows much more than you or I do at present:
At this point, it’s still early to understand the full impact to our site, but we have started the process to assess our facility. The site does have backup power capabilities and we have a storm crew in limited operation right now until employees are able to safely return to work. In advance of the storm, the facility took appropriate precautions and we have business continuity plans in place to ensure our medicines continue in production. We do not anticipate interruption in supply at this time.
The U.S. Food and Drug Administration is busy making equally reassuring content-free noises. Quoth FDA Commissioner Scott Gottlieb:
News coverage has touched on an issue about which we at FDA are very concerned and we are working around the clock to address – the potential for shortages of critical life-saving and life-sustaining drugs needed by patients on and off the island
[blah blah blah]
In the face of a natural disaster of this proportion, it is an evolving landscape and so we will continue to stay on top of the situation. We are aware of several other instances where we may soon face critical shortages if we don’t find a path for removal or ways to get production back up and running. That is why I have directed FDA staff to create a hurricane shortages task force that will identify potential issues and creative solutions.
What we do know is that pharmaceutical manufacturing is a complex process, critically dependent on supply chains of raw materials, electricity, water, and highly skilled technicians...all of which are currently in chaos across much of the island. And unlike consumer products like tennis shoes, you can’t just move the production of drugs to another factory overnight.
Even as carefully phrased as the FDA’s discussion is, it seems clear that in the coming weeks and months we can expect to begin to see some drug shortages, and thus some skyrocketing prices. Some drugs, like Crestor, may even become unavailable. But precisely which drugs will be hit, and how hard, depends on so many factors (particularly the size of existing inventories, and the number and capacity of off-island production sites) that it is impossible to be more specific at this time.
Trying to figure out which drugs are or are not manufactured in Puerto Rico is extremely difficult, because pharmas are secretive about such things and the FDA treats their information like state secrets. But based on my sleuthing through publicly available industry publications and FDA data, the following is a list of some drugs we know are — or have been — manufactured in Puerto Rico. Please be advised that some of this information could be out of date — companies change their manufacturing sites sometimes, without public discussion. Also be advised that the absence of a drug from the list below does not necessarily mean that it is not manufactured in Puerto Rico.
Brand Name Drugs Known to be Manufactured in Puerto Rico (listed by company):
Abbvie:Humira (rheumatoid arthritis, Crohn’s disease). Humira was the world’s best-selling drug in 2014, and is still huge. And 75% of Abbvie’s Humira production capacity is said to be located in Puerto Rico.
Astrazeneca:Crestor (statin for cholesterol control). 100% of AZ’s Crestor production capacity is said to be located in Puerto Rico.
Amgen:Aranesp (anemia from kidney failure or chemotherapy), Neupogen (white cell production stimulant after chemotherapy), Neulasta (white cell production stimulant after chemotherapy), Epogen (for anemia caused by dialysis).
Janssen Ortho:Prezista (HIV infection), Xarelto (“blood thinner”), Invokana (Type 2 diabetes).
Pfizer:Celebrex (non-steroidal anti-inflammatory for pain), Lipitor (statin for cholesterol control), Inspra (diuretic for high blood pressure), Viagra (erectile dysfunction), Lyrica (nerve and muscle pain), Zyvoxid (antibiotic).
Merck:Ezetrol (cholesterol control with or without statins).
Bristol-Myers:Pravachol (statin for cholesterol control), Eliquis (anticoagulant “blood thinner”), Orencia (auto-immune diseases including rheumatoid arthritis), Opdivo (lung cancer, melanoma, Hodgkin lymphoma, other cancers), Yervoy (metastatic melanoma), Eliquis (anticoagulant “blood thinner”), Sustiva (HIV infection), Glucophage (diabetes).
But Wait — There’s More:
As if all this isn’t bad enough, some drugs that are not manufactured in Puerto Rico may also be impacted. That’s because the island is also home to several facilities that manufacture so-called APIs — active pharmaceutical ingredients. APIs are the specialty starting materials (chemicals) from which certain drugs are themselves produced. Just as without flour you can’t make bread, so too without the right APIs you can’t make the drug. I have no idea which specific APIs are nowadays manufactured on the island, but I’m concerned that this could prove to be a sleeping giant of a problem. I guess we’ll all find out soon enough.
Again: if you’re concerned that you might have a problem here, talk to your doctor.
What did I just say? That’s right: talk to your doctor.
Let’s review: talk to your doctor.
Postscript:
I’m also concerned that, further down the road, this is going to mean even more misery for Puerto Ricans themselves. I think it’s not unlikely that at least some of these pharmaceutical companies have been thinking about leaving Puerto Rico for some time now (ever since Section 936 tax provisions expired), but have been saddled with billion-dollar manufacturing facilities that no one else is interested in buying from them. If those facilities are now destroyed, some of those companies are likely to cut their losses, take the insurance money, and run to Ireland or Singapore, leaving behind a huge hole in Puerto Rico’s already groaning economy.