After suffering in the wake of expired tax incentives for pharmas, the island is trying to take advantage of geopolitics to grow its drug manufacturing sector.
Amgen and Eli Lilly recommitted to Puerto Rico in 2025, pumping money into facilities to expand their longstanding presences on the island. Yet 20 years on from Puerto Rico’s tax-advantaged heyday, it‘s not yet clear whether the unincorporated U.S. territory can capitalize on the Trump administration’s reshoring drive to regain momentum.
In September, Amgen committed $650 million to boost production at its biologics manufacturing facility in Juncos, Puerto Rico, predicting the investment will create nearly 750 jobs across construction and drug production. The next month, Lilly vowed to spend more than $1.2 billion to expand and modernize its Lilly del Caribe manufacturing site in Carolina, Puerto Rico. Lilly’s investment will equip its plant to make orforglipron, the oral small molecule GLP-1 drug that is central to its growth plans.
Boom and Bust
Amgen’s and Lilly’s investments marked a show of confidence in an island that has faced challenges in recent decades. Pharmaceutical manufacturing employment on Puerto Rico peaked in 2004, the year before the end of a 10-year phaseout of tax incentives that helped attract companies to the island. After employing more than 29,000 people at its peak, pharma manufacturing’s headcount on the island was below 14,000 every year from 2020 to 2024.
“It’s the perfect case study for what happens when the tax picture changes,” Didi Caldwell, CEO of site selection specialist Global Location Strategies, told BioSpace. “It’s honestly a little bit of a sad picture for me. The U.S. government—I don’t know that they realized how changing [taxes] was going to create such a vacuum there, where companies started leaving or at least started pursuing other locations.”
When pursuing new locations, many companies looked beyond the U.S. Ireland was a beneficiary of this shift, according to both Caldwell and congressional testimony by King & Spalding trade partner Jamieson Greer. Ireland grew its pharma industry through tax incentives. Now, with the Trump administration pushing to reshore pharma manufacturing, Puerto Rico is trying to recapture some of the ground it lost to other locations.
John Bozek, chief strategy and research officer at InvestPR, told BioSpace that the island is trying to take advantage of the global geopolitical situation as best it can to grow its pharma manufacturing sector. The pitch is that Puerto Rico offers the institutional stability of being an unincorporated U.S. territory, access to a skilled, relatively low-cost workforce, local tax incentives and logistics routes to global markets.
Managing Challenges
There is mixed evidence of Puerto Rico’s progress. The value of pharma exports from the island increased through 2024 before slipping over the first 10 months of 2025, raising questions about the impact of the reshoring agenda. While employment stayed flat as exports rose, Bozek said plants are now more automated than in the island’s boom years. Automation could keep workforces smaller than in the past but create a higher proportion of well-paying jobs and improve productivity, Bozek said.
Yet Caldwell has worries about workforce skills, believing that they “are starting to atrophy over time” as employees from the boom times retire or move into other industries. Bozek said Puerto Rico has a “highly developed, highly skilled workforce” and the highest concentration of pharma and medical device manufacturing roles in the U.S.
Caldwell also flagged infrastructure as a challenge for Puerto Rico. The electricity grid was affected by hurricanes Irma and Maria in 2017 and other natural disasters over the following years. U.S. federal agencies allocated more than $17 billion to address the near- and long-term challenges, but the Financial Oversight and Management Board for Puerto Rico (FOMB) said in 2024 that the grid had yet to recover from the 2017 hurricanes. In 2025, FOMB said the Puerto Rico Electric Power Authority provides “the least reliable service for one of the highest electricity rates in the U.S.”
Amgen discussed the implications of that unreliable service in the risk section of its 2024 annual report. The report described a series of natural disasters and power outages that forced Amgen sites to operate on backup generators in recent years. None of the events had a direct material effect on Amgen, but they disrupted its third-party suppliers on the island.
Bozek said manufacturers raise the electricity grid in talks about investing on the island, but insisted “it’s not really a difficult conversation to have.” As a tropical island cut off from any large continental grid, Puerto Rico has faced electricity supply challenges that have necessitated contingency plans for decades, Bozek said.
That experience has provided a framework for mitigating risks. By bringing providers of backup energy sources and the Puerto Rican government, which can provide incentives, into talks with drug companies, Bozek believes the island can offer reassurance that energy supply is a manageable challenge.
“It’s not a perfect place—no place is—and it is an issue that we have to address when we talk to these companies. But it’s something that is definitely doable,” Bozek said. “I think the evidence of all the companies that have been here for a long time shows that it is something that can be taken care of.”
