The Commonwealth of Puerto Rico has long been a stronghold for manufacturing of medical devices. Its location makes it ideal for shipping both to the United States and to Europe. In addition, the government of Puerto Rico has instituted tax breaks and other incentives to lure high-level manufacturing to the territory with significant success. The number of medical device firms with a presence in Puerto Rico is impressive, as are the names (BD, Baxter, Roche, Fenwal, Medtronic, to name a few).

Heather Thompson

December 15, 2010

2 Min Read
Looking for a Competitive Advantage in Puerto Rico

According to the Puerto Rico Industrial Development Company (PRIDCO), 50% of all pacemakers and defibrillators used in the United States are manufactured in Puerto Rico.

The firms that have manufacturing plants in PR take building and maintaining a strong reputation for quality very seriously. “We know that to continue to compete in manufacturing, we have to invest in engineering and move our technology forward to stay competitive,” explains Erick Santiago, global manufacturing comptroller at Fenwal International., which makes blood therapy devices. To that end, the Fenwal facility has built its own e-beam sterilization room, and is in the process of reorganizing its cleanrooms and packaging systems to make better use of the space.

Medtronic has redesigned its facility in Humacao (the firm has 2 other facilities in PR, each focusing on neurostimulation products, diabetes management devices, orthopedics products, and cardiovascular treatment devices) to bring quality of all medical devices under one leadership group. It is introducing 6 lean manufacturing lines for implantable cardioverter-defibrillator and microstimulation products. “Our goal is to see a 70% increase in volume,” says David Olivera, manufacturing director at Medtronic Puerto Rico Operations Company.

Companies in Puerto Rico are also beginning to introduce systems that encourage innovation, both in engineering and in product development. The Roche Diagnostics facility in Ponce, Puerto Rico manufactures diabetes test strips, but general manager Miguel Centeno wants to do more. Roche has introduced incentives for its employees to think about improvements. “We offer a 10% bonus for ideas that lead to cost containment.”

In addition to offering employee incentives, many facilities are working to take advantage of incentives offered by the Puerto Rican government. For example, to encourage research and development activities on the island, companies are offered a 50% tax credit on operational costs for R&D efforts. Cash grants are based on increasing corporate R&D spending or collaboration with academic researchers.

Such incentives are helping device companies with operations in Puerto Rico change and develop the systems they needs to stay competitive in a global market.

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