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Friday, Feb 3, 2023
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Puerto Rico’s Governor to Visit Drug Firms

Puerto Rico Gov. An & #237;bal Acevedo-Vil & #225; plans to visit leaders of the life sciences industry Feb. 19 and 20 in an effort to forge bonds with local leaders while attracting potential firms to what he calls “Bio Island.”

The governor’s visit will include tours of Arena Pharmaceuticals, Biogen Idec and Gen-Probe and meetings with leaders at Connect and Biocom.

He is expected to sign a partnership agreement with Biocom, a regional life sciences association, aimed at increasing the sharing of best practices with the possibility that a delegation of Biocom representatives would one day visit the island.

A similar agreement signed last year between Puerto Rico and BayBio, Northern California’s life sciences trade group, formed the basis of a 2008 legislative recommendation to form a government-industry-academic partnership organization modeled on the Puerto Rico Science, Technology and Research Trust, a nonprofit entity capable of making grants, loans and other investments in research and infrastructure projects related to life sciences and health care.

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“San Diego is an important area in terms of bioscience and biotechnologies,” Acevedo-Vil & #225; said during a phone interview last week. “I want to establish a close relationship and partnership and I want to learn from the best experience over there.”

He says relationship building is the main reason for his visit, although he will also use the visit to highlight Puerto Rico’s recent life sciences initiatives.

“Every opportunity I will attempt to attract more investment in Puerto Rico,” he said.

Joe Panetta, president and chief executive of Biocom, says he first met with Puerto Rican officials on a trip there with other industry leaders about a year and a half ago.

That, he says, formed the basis of his organization’s relationship with the country.

The governor, a member of the Popular Democratic Party of Puerto Rico who narrowly defeated his opponent in the 2004 general election, comes to the United States during an election year at a time when the island is undergoing criticism concerning quality control measures at its many drug manufacturing plants. An investigation by The Associated Press into FDA reports revealed dozens of lapses in quality control at the island’s plants during a period of four years.


Closures, Consolidations

Puerto Rico, long a manufacturing hub for U.S. drug makers, is struggling to hold onto jobs as high-profile pharmaceutical firms close plants there and consolidate their operations.

Among those that have closed or plan to close facilities on the Caribbean island are Teva Pharmaceutical Industries Ltd., GlaxoSmithKline, Schering-Plough Corp., Watson Pharmaceuticals Inc. and Bristol-Myers Squibb Co. Many cited declining drug sales and increasing competition from generic drug makers.

Puerto Rico makes 13 of the 20 best-selling drugs in the United States, but industry analysts say the island is in danger of losing its clout unless it changes its focus from pharmaceutical manufacturing to research and development.

The island’s pharmaceutical industry accounts for roughly a quarter of its gross domestic product, about $36.5 billion in annual exports, according to the AP.

“We, for years, were very good at manufacturing pills,” said Deepak Lamba-Nieves, research director for a San Juan-based nonpartisan think tank, the Center for the New Economy. “The question is now ‘Can we be as competitive or even better at producing vaccines and other products biotech requires or delivery systems that biotech requires?’ ”

Acevedo-Vil & #225; says he will look to learn from biopharmaceutical manufacturers, none of which have facilities on the island.

“We’re definitely a San Diego company and plan to stay a San Diego company, but we’re willing to hear the incentives they’re providing,” said Jori Tulkki, associate director of government and corporate affairs at Gen-Probe.

Acevedo-Vil & #225; says he made life sciences initiatives the cornerstone of his campaign for governor. He points to the development of a so-called “knowledge corridor,” a former prison site on 80 acres that connects the University of Puerto Rico, the Puerto Rico Cancer Center, a molecular sciences building and other research and development infrastructure.


Venture Dollars

The governor has also pledged to make the availability of venture capital dollars a top priority for businesses looking to establish themselves on the island.

Since the expiration of wage credits under Section 936 of the Internal Revenue Service code two years ago, companies have reaped the benefits of local tax structures by declaring their operations as foreign corporations, according to Acevedo-Vil & #225;.

But Lamba-Nieves says the real need for companies looking to locate on the island is low-cost energy and access to pure water.

“I think Puerto Rico will need to get real and adapt to all the new changes,” Lamba-Nieves said. “We can’t control the decisions made by Pfizer; we can control the incentives, in a sense.”

Acevedo-Vil & #225; says he’s pushed incentives to make it easier for biotech manufacturers to locate to Puerto Rico.

“We know that the old way of making drugs is changing so, precisely, this is important for Puerto Rico,” he said.

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