Puerto Rico Has a Big-Pharma Problem

Puerto Rico Has a Big-Pharma Problem

The US territory gives pharmaceutical companies big tax breaks that could otherwise be invested in its communities, where the revenue is deeply needed.


In Puerto Rico, our elected officials have told us for decades that a job in the pharmaceutical industry can be a source of stability and decent wages. But for many Puerto Ricans working for Big Pharma, that’s a fantasy.

The pharmaceutical industry is one of the largest sectors of Puerto Rico’s economy, and that’s not by chance. The Puerto Rican government gives pharmaceutical companies major tax breaks to keep them on the archipelago, arguing that the pharmaceutical companies will create jobs and enrich communities.

But the tax breaks come at a big cost to Puerto Rico. Between 2017 and 2023, Puerto Rico’s government is set to have given its manufacturing sector, of which the pharmaceutical industry is a major player, $100.5 billion in tax breaks. Added to this is the estimated $140 billion that nine of the top pharmaceutical companies skirted by using offshore tax havens.

That’s a lot of tax revenue that could otherwise be invested in Puerto Rico communities, where it’s deeply needed—over 43 percent of the population lives in poverty and one-third are food insecure. As an example, as I write this, many schools in the public education system are unable to open because of lack of resources and staff. Many of those schools serve the children of these workers.

While those tax breaks have succeeded in attracting pharmaceutical manufacturers to Puerto Rico, they’ve failed to produce an equivalent number of job opportunities and benefits for residents. The tax breaks directly and indirectly generated only an estimated 7,000 jobs in a territory with over 3.3 million people. Many of the pharma jobs on the island pay low wages and provide no stability.

A new report based on dozens of interviews and over 100 informal conversations with cleaning and security staff at pharmaceutical plants in Puerto Rico concludes that workers face low wages, inadequate benefits, and poor workplace safety. People who’ve worked at the same pharmaceutical sites for nearly 30 years are still making minimum wage, and for many, benefits remain nonexistent. For some workers, their paychecks aren’t enough to cover living expenses, with their rent and commute costs totaling more than their paychecks.

The exploitation of workers is even starker when compared to the booming profits of companies like J&J, Roche, Pfizer, Novartis, and Merck, and the pay of their CEOs, who on average make $20 million each year. This is 1,131 times what their lowest-earning workers in Puerto Rico make. It’s clear that the tax breaks the pharmaceutical industry has received are doing little more than fattening corporate profits that never make their way to the majority of workers in Puerto Rico.

One of the workers we interviewed for this report, Kamila (a pseudonym), is a working mother of three who has been a cleaner for a pharmaceutical company in Puerto Rico for the past five years. Starting at 5 am each day, she’s responsible for cleaning a full building that includes three labs, conference areas, bathrooms, and offices. She made $7.25 an hour until this year when Puerto Rico’s new $8.50 minimum-wage law went into effect. Following that small increase, her hours were cut to 30 hours a week—like many other workers whose companies slashed hours in response to the wage increase. The roughly $900 a month she takes home is not enough to cover her living expenses. Rent alone is $600 and the rising cost of gas means she has to pay $400 a month to commute the 45 minutes to the factory.

The profits these pharmaceutical companies make show that not only are the cut hours unnecessary but also that wages for Kamila and other workers like her can and should be much higher. It’s corporate greed that leads to these unethical practices and treatment of employees—workers who are helping provide our communities with life-saving medications and supplies in the midst of a global pandemic. The fact that pharma profits egregiously from these workers while asking for giveaways from the Puerto Rican government is a result of deeply racist policies that go back to the days of so-called banana republics.

It’s time for pharmaceutical companies, which have for too long viewed Puerto Rico as a place where they can get cheap labor and deep tax cuts, to treat the workers producing the vital medicines and medical supplies for the world with the dignity they deserve.

And it’s time for the Puerto Rican government to listen to worker stories and honor their demands for dignity, safety, and fair wages.

Puerto Rican leadership must ensure that these companies pay their fair share of taxes by ending their corporate giveaways and tax incentives and instead redirecting that money toward needed community investments in education, public health, and livable neighborhoods. The government must also ensure that pharmaceutical companies pay their workers living wages and provide benefits, job security, and safety protections. As a first step, my colleagues and I at the Center for Popular Democracy believe that the Puerto Rico legislature needs to investigate these practices to ensure that tax breaks are in fact generating the good jobs we have been promised for decades.

Puerto Ricans can’t wait for these companies to do the right things, because they’ve shown us they won’t. Workers have organized, and the research providing the evidence and roadmap for a change are readily available. The jig is up. Big Pharma has failed Puerto Ricans, and they must be held accountable.

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