Puerto Rico Poised to Rekindle Its Pharmaceutical Industry Dominance
Puerto Rico is on the verge of revitalizing its pharmaceutical industry, aiming to reclaim its historical position as a global leader. The island once thrived as a manufacturing hub, supported by a skilled bilingual workforce and strategic U.S. legal protections. However, these advantages diminished when Section 936 of the U.S. tax code was phased out.
The Rise and Decline of Puerto Rico’s Pharmaceutical Sector
For many years, Puerto Rico’s pharmaceutical landscape flourished. The tax incentives allowed American firms to operate tax-free, leading to job creation and economic prosperity. Unfortunately, the repeal of these incentives caused factory closures and significant job losses. This shift has had lasting impacts on Puerto Rico’s economy, leaving it more vulnerable to external supply chain disruptions, particularly in light of recent global challenges.
Advantages of Reviving the Industry
- Bilingual and educated workforce
- Proximity to U.S. mainland markets
- Operational stability under U.S. law
Reinstating tax incentives could stimulate investment from pharmaceutical companies looking to establish or expand manufacturing facilities on the island. Each new factory could create hundreds of high-paying jobs, positively impacting various sectors, including services and construction.
Strengthening Economic Resilience
Revitalizing Puerto Rico’s pharmaceutical sector would enhance the island’s strategic resilience against global supply chain disruptions. Recent events, such as the pandemic, highlighted the risks of relying on foreign suppliers for critical medications. By incentivizing production within U.S. borders, Puerto Rico could ensure better quality control and reduce dependency on international markets.
Broader Economic Impact
The benefits of restoring Puerto Rico’s pharmaceutical industry extend beyond direct job creation. A strong manufacturing base would lead to improvements in infrastructure, including reliable energy and modern transportation networks. It could also broaden the island’s tax base, enabling enhancements to education, healthcare, and public services. Furthermore, providing substantial job opportunities could significantly reduce the outmigration of young Puerto Ricans seeking better prospects on the mainland.
Conclusion: A Call to Action
Critics may argue that tax incentives constitute corporate welfare, but the reality is that pro-growth policy is crucial for fostering an environment where all stakeholders prosper. Investment leads to higher wages, thriving communities, and increased government revenues. Importantly, reviving Puerto Rico’s pharmaceutical dominance would serve as a valuable asset for U.S. economic security.
To reignite Puerto Rico’s status as a pharmaceutical powerhouse, Washington must act swiftly. The lessons from past successes are clear: using constructive incentives is far more effective than punitive measures. It’s time to restore the policies that once made Puerto Rico an economic success story, beneficial for the island and the nation.
