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PRMA Backs House Bill To Incentivize Pharmaceutical Drugs’ Clinical Trials

Industry Invests Up To $30 Billion In Research & Development Worldwide


June 19, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

The Puerto Rico Manufacturers Association (PRMA) gave its support to House Bill No. 3695, which proposes a special tax deduction for exempt companies conducting research & development (R&D) in Puerto Rico, particularly those performing clinical trials for pharmaceutical drugs, which could attract more manufacturing activity to the island.

Industry sources say the pharmaceutical industry invests up to $30 billion in R&D annually, a 200% increase compared with the $10 billion spent 10 years ago.

House Bill No. 3695 would provide exempt companies and their subsidiaries a special tax deduction equal to the funds they invest in researching, investigating, developing, or manufacturing new products; new uses for or improvements to products; and pharmaceutical drugs’ medical or clinical trials.

"This idea, part of my working plan when I was at the Puerto Rico Industrial Development Co. [Pridco], is the basis for the future establishment in Puerto Rico of a Research & Development Center of Latin America," said PRMA Executive Vice President William Riefkohl, the first Pridco executive director named during this administration. Current Pridco Executive Director Hector Jimenez Juarbe, who substituted Riefkohl, resigned in May and will leave at the end of June. No one has been announced to occupy the position.

"The bill needed to be written with the help of the pharmaceutical industry because of its tax complexities," said Riefkohl. "To attract companies that conduct clinical trials to the island, several members of the Pharmaceutical Industry Association of Puerto Rico, such as Carlos Bonilla [Eli Lilly’s tax adviser], gave us their input on how to create new tax-exemptions for an industry that is mostly tax-exempt."

According to Riefkohl, although clinical trials are a small part of the drug-manufacturing process, pharmaceutical companies make large investments to prove that a product is clinically safe for its intended users. In addition to integrating other local medical institutions such as hospitals and laboratories into the process, clinical trials ensure better care for people with special medical needs and strengthen pharmaceutical companies’ presence on the island.

This Caribbean Business article appears courtesy of Casiano Communications.
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