trending Market Intelligence /marketintelligence/en/news-insights/trending/wkHot4C8DX9sILGwFrDTww2 content esgSubNav
In This List

US faces dire drug shortages if Puerto Rico plants not restored, FDA chief warns


Insight Weekly: Energy crisis cripples Europe; i-bank incomes rise; US holiday sales outlook


Japan M&A By the Numbers: Q3 2022


Insight Weekly: Reviving nuclear power; 2023 outlook for US financials; PE funds fuel EV sector


Insight Weekly: Energy reforms after midterms; Crisis ends 'age of gas'; bank deposits fall

US faces dire drug shortages if Puerto Rico plants not restored, FDA chief warns

If biopharmaceutical and medical device manufacturing facilities in hurricane-stricken Puerto Rico are not restored to their full capacity soon, the U.S. could face shortages of critical therapies to treat diseases such as cancer and HIV/AIDS, the head of the U.S. Food and Drug Administration warned lawmakers.

"The loss of access to these drugs and devices could have significant public health consequences," FDA Commissioner Scott Gottlieb told the House Energy Subcommittee on Health on Oct. 3.

Puerto Rico, which was struck by Hurricane Maria as a Category 4 storm on Sept. 20 — decimating the entire U.S. island territory — houses manufacturing sites for some of the largest medical product makers.

"I've never seen something on this scale where we've had a region with so much important concentrated manufacturing impacted in such a profound way," Gottlieb said. "This is an existential risk that we face as a nation if these facilities are permanently impacted."

Drugmakers including Amgen Inc., AstraZeneca PLC, Bristol-Myers Squibb Co., Eli Lilly and Co., GlaxoSmithKline plc, Johnson & Johnson, Merck & Co. Inc., Novartis AG and Pfizer Inc. all have plants in Puerto Rico.

There are at least 40 medicines from about 10 companies made in Puerto Rico for which the FDA is particularly concerned about disruptions in access and availability, said Gottlieb, who visited Puerto Rico on Sept. 29 as part of a delegation led by Elaine Duke, the acting secretary for the U.S. Department of Homeland Security.

Even a short-term interruption in manufacturing of those 40 products could lead to shortages, Gottlieb said.

Thirteen of those medicines are so-called "sole source" drugs, meaning only one company is making the approved product for the U.S. market, Gottlieb said, adding: "These are important medicines. These are HIV medicines, chemotherapeutics and injectable drugs that are hard to manufacture."

He noted some "very sophisticated medical devices" also are made in Puerto Rico and are the only sources of those products for the entire U.S. market.

Economic impact

Getting the facilities up and running also is a priority for Puerto Rico's recovery and economy, Gottlieb said.

"These sites directly employ about 90,000 residents of Puerto Rico and represent about 30% of the island's GDP."

In 2016, pharmaceutical and medicine manufacturing was the largest export for Puerto Rico, comprising 72.4% of total exports, valued at $14.5 billion, according to a July 2017 report from the U.S. Bureau of Labor Statistics.

"If we don't get these facilities back online in a timely way or they decide to relocate after this disaster, it would jeopardize the island's economic future," Gottlieb said.

Doing it for themselves

The medical product companies' facilities are intact for the most part, Gottlieb told the subcommittee. But manufacturers are dealing with logistical issues in maintaining operations and getting their employees to their workplaces.

The biggest issue has been the lack of gasoline and basic sustenance for pharmaceutical and medical device company employees so they can return to work, he said.

"A highly skilled, highly dedicated, highly productive Puerto Rican workforce enables the success of this industry," Gottlieb said. "But people are living in difficult circumstances."

So the biopharmaceutical and medical device companies have stepped up and provided direct assistance to their employees, he said.

"They are opening their cafeterias, offering three meals a day and providing gasoline to their employees."


Since Maria hit Puerto Rico, the FDA has been working with the biopharmaceutical and medical device manufacturers to troubleshoot problems with their facilities, the commissioner told lawmakers.

Gottlieb said his greatest long-term concerns are the current lack of sustained electricity at the medical product plants in Puerto Rico, whose power grid was crippled by the hurricane, and the status of companies in the secondary drug supply chain — those that make active pharmaceutical ingredients.

"They need stable power and dual feeds because of the equipment they use," Gottlieb said.

Currently, the companies are relying on fuel-run generators, some of them with 800,000 kilowatts or more capacity, he said.

"But those generators are not meant to operate for months and months on end."

The concern with the secondary suppliers is that many may not be regulated by the FDA, Gottlieb said.

"We are not necessarily monitoring those closely."

So there is uncertainty whether those companies will be able to get consistent and adequate supplies to drug manufacturers, he said.

For now, Gottlieb said he is spending a lot of time on the phone with medical product maker CEOs to help them get their facilities back online.

"It is a public health priority."