Storm Impact on Drug Supply

The extensive volume of pharmaceutical manufacturing in Puerto Rico is driving FDA efforts to quickly assess facility damage and logistical problems to ensure continued supply of critical medicines. More than 20 companies, including Pfizer, Eli Lilly, Johnson & Johnson, and Amgen, operate more than 100 medical product facilities in Puerto Rico, according to FDA. As the hurricane loomed, FDA identified more than 40 high-priority essential drugs made in Puerto Rico where short-term disruptions could lead to shortages of certain treatments for cancer and immunosuppressants for transplant patients. About a dozen of those critical products are made only in Puerto Rico, aggravating potential supply issues.

FDA commissioner Scott Gottlieb provided an update on agency efforts to deal with the devastation caused by Hurricane Maria at a hearing before the House Energy & Commerce Health subcommittee this week. Before beginning his scheduled testimony on FDA policies to expand patient access to investigational drugs, Gottlieb described how dozens of staffers in FDA’s district office in San Juan are working to assess damage to producers of regulated products. A related challenge is to ensure that Puerto Rican residents have access to needed medical products and to a safe blood supply. While most pharma facilities have continued to operate with generators following the loss of power across the island, concerns remain about the potential for continued production of important therapies. Getting Puerto Rico’s large drug manufacturing capacity back online “is a public health priority,” he stated.

Although most drug manufacturing facilities were not badly damaged, many employees could not get to work due to impassable roads and water and food shortages. To deal with the situation, FDA staff worked with other federal and local agencies to clear debris blocking facilities, assess manufacturer fuel needs for generators, and secure permissions for planes to land and transport critical products to the mainland. The agency reported last week that it was working with five companies to coordinate priority drug transport off the island.

An FDA hurricane shortages task force is helping to speed regulatory decisions needed to avoid problems and to get production up and running. Gottlieb noted at the hearing that the situation in Puerto Rico was improving, as pharma companies are able to help staff come to work. But he expressed concerns about company supply chains that could require fast FDA regulatory approvals, as with company decisions to shift some production to mainland facilities.

And even though manufacturers have powerful generators and sufficient fuel to handle operations for the short term, these emergency systems are not designed to run for months, Gottlieb noted, which may be necessary if the local power grid remains unstable over a long period. These are strong facilities with large generators, Gottlieb told the House panel, “but no one expected an impact of this scale.”

Puerto Rico emerged as a leading producer of US pharmaceuticals in the 1960s because of tax policies that allowed US-based companies to transmit profits made on the island to headquarters without paying federal taxes. This tax advantage was phased out by 2005, but the island continues to offer highly attractive tax rates for manufacturers, and important R&D incentives have brought in more biotech firms and medical device makers.

That could change if extensive hurricane damage and poor emergency response spurs company departures. The pharmaceutical industry in Puerto Rico is responsible for nearly 90,000 jobs, and medical products and drugs account for more than half of the island’s exports. Decisions by manufacturers to relocate following this disaster, Gottlieb observed, would “jeopardize the island’s economy.”