Medical device makers see little impact from Fiona on Puerto Rico operations

Becton Dickinson and Co

23/09/2022 12:00

By Leroy  Leo and Khushi Mandowara
       Sept 23 (Reuters) - Medical device companies and some
drugmakers with manufacturing operations in Puerto Rico said
they do not expect meaningful disruption from Hurricane Fiona,
which knocked out power for over 3 million people and caused
flooding and landslides on the island.
    The U.S. Food and Drug Administration, which worked with
companies to prevent shortages of drugs and medical devices
after Hurricane Maria battered the medical manufacturing hub in
2017, said it is in discussion with companies it regulates there
regarding any impact on supplies.
    Most companies Reuters spoke to, including Baxter
International  BAX.N , said they had initially either
temporarily halted operations or were running their plants on
generators since Fiona struck on Sunday. 
    None said they expected supplies to the United States to be
significantly disrupted by the storm, in part due to
infrastructure changes, such as building up their generator
power, following Hurricane Maria.
    The electricity grid on the island is owned by bankrupt
state-run Puerto Rico Electric Power Authority (PREPA) and is
now operated by LUMA Energy, a private joint venture of Canadian
energy firm ATCO Ltd  ATCx.TO  and U.S. energy contractor Quanta
Services  PWR.N . 
    While the pace of power restoration has been much faster
than following the devastation of Maria, an estimated 1 million
homes and businesses remain without power. 
    Baxter, which makes small bags for intravenous medication,
clinical nutrition products and inhaled anesthetics in Puerto
Rico, said its facilities have "sustained little to no damage"
from the storm. 
    By Thursday, Baxter had restarted operations and was running
at normal, pre-hurricane levels, spokesperson Lauren Russ said. 
    The company took a $70 million revenue hit after Hurricane
Maria in 2017, spurring it to diversify manufacturing of key
products.
    Ahead of hurricane season, the company now builds up
supplies of some products and stores much of it on the U.S. 
mainland, Russ said, adding that Baxter had good inventory
levels for most products produced in Puerto Rico and the
Dominican Republic for U.S. customers.
    Integra Lifesciences  IART.O  and Abbott Laboratories
 ABT.N  also upgraded back-up generators and communication
capabilities and shored up infrastructure at plants such as
improvements to roofs and pipes, their spokespeople said.
    "Most MedTech companies are more prepared with greater
redundancy" than when Maria hit, J.P Morgan analyst Robbie
Marcus in a research note. 
    Spokespeople for other medical equipment companies including
Becton Dickinson  BDX.N , Medtronic  MDT.N , Edwards
Lifesciences  EW.N  and Stryker  SYK.N  also said they were not
seeing a major impact to operations from Hurricane Fiona due to 
measures undertaken following Maria.
    Drugmakers with plants in Puerto Rico said they have been
able to keep up production and supplies as well.
    Johnson & Johnson  JNJ.N  said operations were restored at
all its sites in Puerto Rico by Wednesday.
    AbbVie's  ABBV.N  facilities are intact and operational and
unlikely to see any patient impact or product shortages due to
Fiona, according to a person familiar with the company's
operations who asked not to be named.
    Eli Lilly and Co  LLY.N  has not experienced any disruptions
to its site or supply, spokesperson Molly McCully said.
 (Reporting by Leroy Leo and Khushi Mandowara in Bengaluru;
additional reporting by Michael Erman; editing by Caroline Humer
and Bill Berkrot)
 ((Leroy.Dsouza@thomsonreuters.com ; Twitter: https://twitter.com/LeroyLeo7;))