The House Ways and Means Committee held a hearing on trade policy in which Puerto Rico was mentioned.
What is the Ways and Means Committee?
The House Ways and Means Committee is the oldest committee in the House of Representatives, dating from 1789. It is in charge of taxes, tariffs, Social Security, trade agreements, some aspects of foster care of children, Medicare, unemployment insurance, and much more. Members of this committee cannot serve on any other committee at the same time.
This committee is considered one of the most important committees in the House.
Puerto Rico comes up
Rep. Greg Murphy brought Puerto Rico up in the hearing, saying, “I was in Puerto Rico this last week. And there’s so much of an opportunity to go there and onshore in an American territory, to bring back American pharmaceutical industries, so many other industries that help us with our national security. And at the bottom line. This is what we’re talking about. We’re talking about national security.”
Murphy had shown a slide depicting the drop in U.S. manufacturing. He spoke passionately about the problem of losing manufacturing capacity and what he considered a resultant trade deficit. He spoke about several issues, including the health care supply chain including pharmaceuticals and medical devices, before approaching the question of Puerto Rico directly.
Puerto Rico is the largest exporter of pharmaceuticals in the United States. 20 of the most popular medications in the world are produced in Puerto Rico. Rep. Nicole Malliotakis made this point again later in the hearing, saying. “I actually have legislation to do just that: to incentivize our sensitive supply chain, particularly pharmaceuticals back here. And also to utilize Puerto Rico, which has had historically the infrastructure to do it and agree with my friend, Dr. Murphy, who pointed that out earlier, and I have two pieces of legislation, I hope the Committee will take up or perhaps we’ll put a piece in the tax package…We also have to redo some of the regulatory framework and some of the permitting process that takes too long, but we can get there, but we need to make sure we don’t hurt ourselves in the interim.”
What is Puerto Rico’s place in the healthcare supply chain?
The United States relies heavily on foreign nations to supply pharmaceuticals. Approximately 80% of the pharmaceuticals used in the United States are manufactured overseas, including both active pharmaceutical ingredients (APIs) and finished dosage forms. This reliance on foreign production has raised concerns about drug shortages and national security. India and China are the most important suppliers not only for finished drugs but also for ingredients.
Generic medications, in particular, are sourced from other countries. U.S. manufacturers generally find that producing generic drugs is not profitable, but 90% of the medications prescribed in the United States are generics.
The federal government has been saying since the pandemic that it is important to bring pharmaceutical production back to the United States. Malliotakis stated that it takes seven years to get a new manufacturing plant up and running. But there are already 49 FDA-approved pharmaceuticals factories in Puerto Rico, as well as a skilled workforce. The territory can be ready for increased production quickly.
Puerto Rico has some challenges in manufacturing, including the stability of the electric grid and logistics for bringing products to market. But with attention to infrastructure, Puerto Rico can continue to be an essential part of the U.S. healthcare supply chain, reducing reliance on foreign suppliers. Some experts point to progress that has already begin in healthcare logistics. There are also bills in Congress proposing tax incentives for pharmaceutical manufacturers and for logistics development.
Puerto Rico has opportunities in the current economic climate — and offers opportunities to the United States as a whole.
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