• The Star Staff

Report: While pharma firms benefit from island tax breaks, the COVID-19 tests they produce have gone

By John McPhaul


A recently published report reveals that the pharmaceutical companies Abbott and Roche, responsible for manufacturing molecular tests for COVID-19 in Puerto Rico, have benefited from large tax exemptions on the island despite the fact that the tests have allegedly been notably absent here.

Abbott and Roche are noted for large-scale distribution of COVID-19 tests in the United States. However, the report suggests, the paucity of the tests on the island has raised doubts about the role that the two companies are alleged to be playing in the coronavirus crisis in Puerto Rico.

The report, published by the social activism organization Hedge Clippers, indicates that in 2019, exports from the pharmaceutical and medical products industries totaled $47 billion, or 74 percent of Puerto Rico’s exports. Pharmaceutical products represented 36 percent of the value of all products manufactured in Puerto Rico.

In 2019, Abbott reported net earnings of more than $3.6 billion. A significant portion of those profits were reported from Puerto Rico, where Abbott has been operating since 1943.

Since the United States began to be affected by the pandemic, Abbott has been launching products to treat COVID-19, primarily tests to identify the virus. On March 18, three days after the curfew began and companies closed in Puerto Rico, Abbott announced that it received authorization from the FDA to distribute its molecular test.

The success of these tests was such that on April 25, Abbott announced that it had sent more than a million molecular tests to all 50 states. However, according to data from a report published in May by the Center for Investigative Journalism, none of these tests had reached Puerto Rico.

Meanwhile, Roche, a Swiss multinational company that has been in Puerto Rico since 1976, reported 2019 earnings of up to $14.5 billion.

On March 12, three days before the economy closed in Puerto Rico, Roche received authorization from the FDA to distribute its molecular test. Four days later, Roche announced the start of its distribution in the United States with the shipment of 400,000 tests. As of the first week of May, allegedly none of those tests had arrived in Puerto Rico.

The pharmaceutical companies are part of the island’s manufacturing sector, which in 2017 alone obtained around $15.7 billion in tax exemptions. That is much more than the government’s operating budget in any fiscal year.

The Hedge Clippers report indicates that the interests of Abbott and Roche are represented through two influential business associations: the Puerto Rico Manufacturers Association and the Puerto Rico Pharmaceutical Industry Association.

According to its website, Hedge Clippers is “a national campaign focused on unmasking the dark money schemes and strategies the billionaire elite uses to expand their wealth, consolidate power and obscure accountability for their misdeeds.”

“Through hard-hitting research, war-room communications, aggressive direct action and robust digital engagement, Hedge Clippers unites working people, communities, racial justice organizations, grassroots activists, students and progressive policy leaders in a bold effort to expose and combat the greed-driven agenda that threatens basic fairness at all levels of American society,” the website says.

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