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Rethinking the Biotech Manufacturing Supply Chain

In the News

SupplyChainBrain – by George Litos, Aaron Attermann and Ankur Rathi

Rethinking the Biotech Manufacturing Supply Chain

Once a perennial global leader in drug discovery and development, the United States is no longer at the forefront of drug manufacturing. Over the past few decades, active pharmaceutical ingredients (APIs) manufacturing — the drugs formulated into tablets, capsules and injections — has steadily shifted away from the U.S.

As recently as 2019, a mere 28% of API manufacturers for the U.S. market were domestically located, while the remaining 72% were overseas, including 13% in China. This trend exposes the pharmaceutical industry to significant risks, including potential supply chain disruptions and sizable financial losses. As the industry continues its post-pandemic rebound, geopolitical factors and legal and regulatory changes — plus the rapid adoption of AI technologies and evolving business — indicate a growing need to bring biotech manufacturing onshore.

Perfectly Puerto Rico

The prevailing sentiment among D.C. policymakers is that the U.S. must seek to manufacture its most critical products domestically to prevent significant disruptions. Puerto Rico is one example of an already-established pharma manufacturing hub within U.S. jurisdiction. Nicknamed “the Medicine Cabinet of the U.S.A.,” Puerto Rico offers a favorable business climate. The island is an ideal destination for the bioscience industry because of its highly skilled workforce proficient in Spanish and English and attractive tax incentives. Many high-profile companies have already made the move — including AbbVie, AstraZeneca and Bristol-Myers Squibb — and as of 2020, more than half of the world’s 20 top-grossing pharma companies have set up operations in Puerto Rico.

Additionally, its status as a U.S. territory means operations are under the U.S. legal framework and regulated by the federal government. With the same FDA coverage protection as their mainland counterparts, biotech companies are also at a competitive advantage with Puerto Rico’s strategic location, government support and deep-rooted infrastructure.

U.S. Government Response 

As part of President Biden’s National Biotechnology and Biomanufacturing Initiative, the federal government seeks to leverage the biotech industry to strengthen supply chains…

Read the full article here.

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