Unknown to the vast majority of mainland US citizens, a nightmare scenario stemming from “supply chain instability” is unfolding right now in Puerto Rico. Brought to light by digging deeper into the gut-wrenching humanitarian crisis, David Daven at the American Prospect writes that it’s also mauled one of the island’s few bright spots amid a decade of disaster: its vigorous medical manufacturing industry.
The future of those plants is uncertain, so the problems related to a single storm’s devastation could spread all across America, causing severe prescription drug and medical supply shortages. Puerto Rico’s economic crisis, in other words, could mushroom into a full-blown national public health crisis.
There are several reasons for this, but the biggest is that the US doesn’t build into national supply chains the kind of redundancy that would prevent this type of exposure. The twin problems of market concentration and relentless demand for exploitable labor have created needless risk, Daven argues.
Perhaps the Puerto Rican disaster will provide a wake-up call.
Puerto Rico’s manufacturing sector used to be far more expansive. Section 396 of the Internal Revenue Code shielded income originating in Puerto Rico from taxation, and pharmaceutical companies in particular took advantage. When President Clinton initiated a ten-year phase-out of Section 936 in 1996, PhRMA, the industry trade lobby, was the first to speak out in opposition.
With no economic stimulus replacing IRC 936, Puerto Rico has experienced negative growth virtually every year since the phase-out ended in 2006. Yet many pharmaceutical companies remained. The supply lines were already in place, and local incentives along with low labor costs still made Puerto Rico attractive.
Pfizer, Amgen, Eli Lilly, Johnson & Johnson, and AstraZeneca are among major manufacturers on the island, employing around 90,000 Puerto Ricans in a $15 billion industry. Nearly three-quarters of all Puerto Rican exports are pharmaceuticals and medical supplies.
Hurricane Maria brought an abrupt halt to production at 50 pharmaceutical factories. While most plants were not actually badly damaged, the destruction of the electric grid meant they could not function without generators.
Getting the fuel necessary to keep the generators running has proven challenging, given the debris blocking roads. These emergency systems were not designed to supply power for months. Any break in capacity could be disastrous; no electricity means no refrigeration, which is vitally necessary for stockpiling prescription drugs.
Even if generator fuel gets to the factories, workers themselves often cannot, preoccupied as they are with locating clean water, taking care of their families, and rebuilding their lives. Companies are having trouble even finding their workers amid a virtual telecommunications blackout; they’ve taken out radio ads asking them to call in.
Relief efforts have centered on feeding and sheltering the citizens of Puerto Rico, not getting workers back to factories.
According to the Food and Drug Administration, Puerto Rico’s factories make 13 of the world’s top-selling brand-name drugs. This includes 75% of Abbvie Inc.’s Humira, the world’s top-selling drug, while AstraZeneca PLC’s blockbuster Crestor is made exclusively there. The devastation of infrastructure could result in dangerous shortages of some of these medicines.
Bet you didn’t know…
Drug supply to the continental US is the most threatened. About 80% of the drug products manufactured in Puerto Rico are consumed by US citizens, and pharmaceutical products manufactured on the island make up nearly 10% of all drugs consumed by Americans, according to Ingrid Torjesen at The Pharmaceutical Journal.Steve's Take: About 80% of #PuertoRico #pharmaceuticals are consumed by #Americans Click To Tweet
With extensive damage to the island’s infrastructure likely to impact the ability to manufacture and distribute products, the situation is far from resolved. FDA commissioner Scott Gottlieb said in a statement:
“Even the facilities that sustained relatively minor damage are running on generator power. They could be without commercial power for months while crews work to restore stable power to the island. The generators allowed many facilities to re-start production, but certainly not all. Moreover, most of the facilities that we know of, that have resumed production, maintain only partial operations. New shortages could result from these disruptions and shortages that existed before the storms could potentially be extended.”
Reason why this crucial drug-supply threat can hide in plain sight: The Trump factor
President Trump clearly craves approval. But, unless that approval is yanked from people in disregard for everything they have previously believed in, he’s left disappointed. Watching him toss rolls of generic paper towels to an audience of reporters and officials in Puerto Rico recently, as if shooting long baskets a la Stephen Curry (that’s another story), I was struck but just how zany our commander-in-chief is.
Case in point. Rather than try to calm the recent firestorm of NFL player-protests, the president spent days tweeting complaints about the players being unpatriotic and telling fans to boycott the games. A nonprofit group that supports Trump immediately took up the cause, buying ads accusing the NFL of “disrespecting the country” and called the protesters “hateful individuals.” Then, in a baffling act of obvious fabrication, Trump pretended that all the people who linked arms during the anthem were doing it to show solidarity with the anthem, not the protesters.
Trump personally spoke to the press and repeated his position on the linked arms three times on Sunday, September 24, 2017 in addition to the more than a dozen tweets over that weekend. He seemed incapable of addressing any other topic.
I think Heather Digby Parton at Salon has this conundrum nailed. She says it’s entirely possible that Trump didn’t even know that the people on this devastated island are Americans.
“It’s probable that if he did know that, he thinks they shouldn’t be. They are all Latinos and most of them speak Spanish, after all, which he thinks disqualifies people from American citizenship,” Digby Parton concludes. “He certainly [hasn’t given] Puerto Rico the same attention he gave to Texas and Florida when they were hit by hurricanes.”
Perhaps when the effect of Maria on the island’s pharmaceutical industry starts being felt on the mainland, Mr. Trump will pay more serious attention to the plight of the Americans who call Puerto Rico home. But I wouldn’t bet on it.