Puerto Rico: Poised to End America’s Foreign Drug Dependence

By Samuel A. Delgado

The coronavirus pandemic exposes a surprising fact: Ninety percent of all antibiotics, common cold and flu, and pain-relief medications found in America’s medicine cabinets are made in China, not the United States.

America’s largest pharmaceutical companies now outsource to China the manufacture of 90 percent of brand name and generic antibiotics, aspirin, and ibuprofen sold in the United States. Chinese workers also makes 80-percent of all Vitamin C tablets sold here, plus a host of our other vitamin supplements.

The current shutdown of Chinese drug-making factories to slow the spread of coronavirus is likely to disrupt our domestic pharmaceutical supplies.

Outsourcing drug manufacturing to the Chinese labor market is much cheaper for Big Pharma. But it puts America’s health in jeopardy, and it makes our national security vulnerable to the uncertainty of international relations.

It is time for American pharmaceutical companies to bring drug manufacturing home. They must swiftly ensure that our stockpile of reliable medicinal supplies can meet the COVID-19 pandemic or any future health emergencies.

Fortunately, America has a reliable partner for the domestic manufacture of its pharmaceuticals: Puerto Rico. The commonwealth already has the infrastructure and a skilled workforce prepared to quickly accomplish this switch.

The Tax Reform Act of 1976 and IRS Code 936 – which gave corporations a tax exemption for manufacturing in U.S. territories like Puerto Rico – made the commonwealth a key player in the manufacture of prescription drugs for the U.S. and world markets.

But, in 1996, President Clinton began a 10-year phase out of IRS Code 936. By 2006, Puerto Rico suffered a crippling number of plant closures and sustained a 40-percent loss of manufacturing jobs. Losing pharmaceutical industry jobs helped crash Puerto Rico’s economy.

Today, Puerto Rico’s government is $74 billion in debt. Other factors contributed to the commonwealth’s debt crisis, but the most significant factor was Big Pharma fleeing the island, causing tax shortfalls and deficits.

America now has a golden opportunity to help Puerto Rico recover and a chance to reduce our drug dependency on China and other foreign manufacturers.

The Puerto Rican community in New Jersey, and across the mainland, must now raise its collective voice to insist that our Congressional delegates swiftly restore vital tax exemptions.

This would allow Puerto Rico to match the discount cost of pharmaceutical manufacturing in China or elsewhere in the world. It would offer Puerto Rico a bright chance for economic recovery. More importantly, it would return jobs and restore dignity to Puerto Rican workers and their families.

Samuel A. Delgado, a Perth Amboy resident, is the retired vice president of external affairs for Verizon New Jersey and former Chairman of the Newark Regional Business Partnership.