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March 26, 2020

Puerto Rico Oversight Board wants the Commonwealth to become manufacturing center of US products

The Financial Oversight and Management Board for Puerto Rico (Oversight Board) sent a letter to United States (US) President Trump asking for Puerto Rico to play “a leading role” in the increased manufacture of American pharmaceuticals. The Oversight Board’s message was prompted by public dialogue about potential policy changes that would redirect the manufacturing of pharmaceutical and medical products to the United States.

According to the Oversight Board, Puerto Rico is a major center for pharmaceutical and medical device manufacturing, as “8% of pharmaceutical expenditures by Americans are for products manufactured in Puerto Rico.” The Oversight Board said the Puerto Rico pharmaceutical manufacturing sector has highly skilled employees, as well as the benefits of Puerto Rico being fully within the US customs territory and having its manufacturing subject to FDA and other federal agency oversight.


The Oversight Board’s missive comes as the effects of COVID-19 are being felt around the world and various media outlets have been reporting on the notion that Puerto Rico could be a destination for the relocation of manufacturing activity to the United States. The letter calls for proactive dialogue between the Government of Puerto Rico and federal policy makers to find mutually acceptable solutions. At this stage, it is too early to tell what effect, if any, the Oversight Board’s position will have on policy changes that may come about in this space. In any event, policy discussions around this area need to be closely monitored by all stakeholders.

For additional information with respect to this Alert, please contact the following:

Ernst & Young Puerto Rico LLC, State and Local Taxation Group, San Juan



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