Puerto Rico touts advantages for med devices

San Juan, Puerto Rico -- A group of reporters descended upon Puerto Rico last week to tour the facilities of some of the medical device companies there. As we reported in FiercePharmaManufacturing, some Puerto Rican pharma sites belonging to Bristol-Myers Squibb, Eli Lilly and--perhaps most conspicuously--Johnson & Johnson's McNeil unit, have received warning letters over the past year. And some device makers over the years have received similar FDA missives. But the four device companies we visited wanted to show their sites' capabilities and emphasis on quality.

According to the Puerto Rico Industrial Development Company, 13 of the world's top 15 medical device companies have invested $600 million in Puerto Rico in the past three years. There are 38,000 direct jobs in the life sciences industry, as well as roughly 100,000 indirect jobs serving the industry (e.g., in construction, financial and legal services). The island has been called the gateway to the Americas with a number of international companies making a mark, including Medtronic, Abbott, Stryker, Baxter and St. Jude Medical. Another company with a presence there is Fenwal, which used to be part of Baxter and has a plant in San German, outside  of San Juan.

Company representative Frank Cosmo said it's important for device companies like Fenwal to look into emerging markets as pharma titans Pfizer and GlaxoSmithKline have done. He emphasized the company's commitment to quality at a time when the FDA has promised to be more stringent. He added it is important to have documentation and be responsive to FDA requests.

Fenwal exec Erick Santiago briefly addressed the offshore tax, which passed in October. Manufacturers headquartered off the island face a four percent tax--something that has drawn the ire of some in the med device industry. Santiago said the company is handling it, although there are certain elements that the company won't be able to enjoy. However, all players, including the government, have been "very open, honest, receptive and willing to hear our voice." It remains a sensitive situation, however.

Moving on to Ponce, the group visited a Roche facility that focuses on diabetes. The facility will celebrate its 40th anniversary next year, and company officials touted its excellent results from FDA audits in 2001, 2004, 2008 and 2010. The group also visited facilities of French ophthalmic company Essilor and Medtronic's Juncos facility. At all facilities, company representatives proudly showed their employees hard at work and emphasized how they had a firm commitment to quality and safety. Indeed, the employees did seem happy to be there and diligent in their work. Representatives from the Department of Economic Development and Commerce Workforce pointed out that the employees have significant expertise in cGMPs, process development, automation, quality control/assurance, FDA and EMEA regulatory compliance, packaging and warehousing. In addition, the island lowest labor costs of any region under U.S. jurisdiction--hourly earnings in manufacturing averaging 65 to 80 percent of the U.S. average. - Liz Jones-Hollis (email | twitter)