Pharma Deja Vu: Amgen’s Puerto Rico Bet Has Failed Before
Pharma is making the same bet on Puerto Rico that collapsed once before. Amgen announced this week it will invest an additional $300 million in its Juncos biologics facility, bringing its total US manufacturing investment to nearly $2 billion over the past year, according to an Amgen press release. The same week, Novartis said it would close its Wehr, Germany plant, cutting 220 jobs from a site that manufactures tablets and capsules and is, in the companys words, no longer competitive, Reuters reported. The pairing is a coincidence. Taken together, they tell the same story the industry has told before: Puerto Rico is back.
The island generated more than $50 billion in annual pharmaceutical exports for three decades, built on a 1976 federal tax incentive called Section 936, STAT News noted. When Congress phased that credit out over 1996 to 2006, factories closed, jobs vanished, and Puerto Ricos economy entered a prolonged recession, the St. Croix Times reported. Amgen opened its Juncos facility in 1992 and has operated it continuously since, Bio.news recorded. The companys medicines reach patients in more than 60 countries, according to Amgen's own press release. But the structural conditions that made the island attractive in the first place are substantially unchanged: skilled bilingual workforce, US territory status, FDA regulatory proximity, and now, apparently, renewed geopolitical pressure to nearshore production. The tax incentive that originally built the hub is gone. What replaced it is not obviously more durable.
Novartis is closing older oral solid facilities in Germany and Switzerland while simultaneously building a seventh US site under a $23 billion investment plan, SWI swissinfo.ch reported. The company says the moves are unrelated to tariff pressure or German healthcare policy. That may be true as a legal matter. The capital, nonetheless, is flowing toward the US and away from high-cost European manufacturing. Amgen is doing the same thing on a different trajectory: expanding biologics capacity in Puerto Rico rather than the US mainland, betting the island can sustain an industrial base that Congress once decided to eliminate.
The question nobody in these announcements is asking is whether the bet has been derisked. Puerto Rico is still a US territory with unresolved political status. It has survived a debt crisis, multiple hurricanes, and the collapse of the very incentive structure that made it a pharmaceutical powerhouse. The current investment surge has no equivalent tax subsidy. What it has is a cluster of experienced workforce, established FDA-validated facilities, and a logistics chain that took thirty years to build. That is real. It is also the same real asset that existed the last time Congress decided the island was a line item to cut.