Global Life Sciences Cluster Report 2011 - Jones Lang LaSalle

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Puerto Rico infrastructure at UPR’s Rio Piedras Campus, Medical Sciences campus and the future UPR/MD Anderson Comprehensive Cancer Center and Molecular Sciences Complex, in addition to 11 area hospitals. Also working in close collaboration with the Science, Technology and Research Trust is the Puerto Rico Industrial Development Company (PRIDCO) and the Pharmaceutical Industry Association of Puerto Rico (PIA PR). Fiscal & political resources Puerto Rico’s life sciences industry began as a destination of choice for offshore manufacturing due to low local corporate income taxes (no higher than seven percent) and no U.S. federal income tax. Other financial incentives include a 200 percent tax credit for R&D and job training costs, accelerated depreciation for investment in buildings, machinery and equipment and tax credits and deductions applicable for 10 to 25 years, depending on eligibility. Puerto Rico also boasts a foreign trade zone status, which means raw materials, components and finished goods may be stored and transported tax free, U.S. duties are deferred and no U.S. duties and Puerto Rico excise tax payments on products exported to foreign markets. In October 2010, a four percent tax was introduced under Law 154, impacting all offshore companies with manufacturing operations in Puerto Rico. Although the measure received heavy criticism from the industry at the outset, the new law seems to be benefiting U.S. pharma companies In March 2011, the Internal Revenue Service announced that U.S.-based parent companies with Puerto Rican manufacturing operating that are subject to Law 154 may claim a federal tax credit against the levy. The lack of industry involvement during the legislative process has been called into question and such lack of transparency may discourage drug makers from expanding operations on the island. 68 Americas | Jones Lang LaSalle As a United States territory, Puerto Rico benefits from national funding programs and grants. In 2010, the National Institutes of Health granted $59 million to the Commonwealth of Puerto Rico. Although this amount was well below other emerging life science markets in the United States, it does represent an important funding source for the island and its research institutions. Additionally, its territory status means operations on the island benefit from the same intellectual property protection and FDA rules as on the mainland. Outlook In recent years, the local government has become more interested in life sciences innovation and R&D. However, Puerto Rico faces an uphill battle. The advantage once held by lower-cost operations is being challenged by developing countries throughout Asia and other parts of Latin America, while on the R&D front it competes with other emerging markets in the United States. The island is not as well positioned for successful innovation as most U.S. markets. Despite Puerto Rico’s line-up of top industry names, facilities on the island receive a disproportionate amount of warnings and citations from the FDA when compared to other facilities in the United States. A University of Ohio report in September 2011 found that quality issues are more likely to occur at offshore sites, citing challenges in the transfer of knowledge and language and cultural barriers as the reasons. The Commonwealth of Puerto Rico has deep-seated roots in pharmaceutical and medical device manufacturing. Tof C
France, Germany, Switzerland and United Kingdom EMEA In this section we review established clusters in Europe that are home to a range of pharmaceutical, biotechnology and medical device companies. Established clusters Emerging clusters 69 EMEA | Jones Lang LaSalle A rich mixture of factors, including high-quality infrastructure, stability, a history of innovation, ease of doing business and some of the world’s best educational establishments, continue to attract investment in the region. Like the United States and other mature life science markets, Europe is increasingly facing challenges to its primacy from emerging markets across the globe. But despite the challenges and changing geographic scope of global life science companies, major established European clusters are sure to remain critical for the industry going forward. Established France Germany Switzerland United Kingdom Tof C
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Life sciences cluster report Global
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Introduction A message from Bill Ba
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Revenue growth To increase revenue,
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= $15 billion 7 The drug and pharma
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Manufacturing Office R&D HQ Support
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India ranked third for inward direc
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Conclusion As we emerge from a peri
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United States, Canada, Brazil and P
Page 17 and 18: 4th 13.5% 8th % life science employ
Page 19 and 20: Bay Area Innovation capital For mor
Page 21 and 22: Boston Others, however, choose to k
Page 23 and 24: 13th 11.6% 8th % life science emplo
Page 25 and 26: Los Angeles Innovation capital The
Page 27 and 28: New York / New Jersey in excess of
Page 29 and 30: 2nd 14.8% 6th % life science employ
Page 31 and 32: Philadelphia Innovation capital Wit
Page 33 and 34: Raleigh Durham The Raleigh-Durham l
Page 37 and 38: San Diego Innovation capital The Sc
Page 39 and 40: Seattle Typically, life sciences te
Page 41 and 42: 12th 11.7% 3rd % life science emplo
Page 43 and 44: Washington DC / Suburban Maryland F
Page 45 and 46: Atlanta In a 2009 study by Georgia
Page 47 and 48: 9th 12.3% 5th % life science employ
Page 51 and 52: 10th 12.1% % life science employmen
Page 53 and 54: Florida Industry framework Intellec
Page 55 and 56: Houston Industry framework Intellec
Page 57 and 58: 6th 13.0% % life science employment
Page 59 and 60: Indianapolis In addition, several i
Page 61 and 62: Minneapolis historically have worke
Page 63 and 64: Canada Industry framework Intellect
Page 65 and 66: 1.1% R&D expenditure (% of GDP, 200
Page 67: Emerging cluster Puerto Rico Over t
Page 71 and 72: France Pharmaceutical production is
Page 79 and 80: United Kingdom Industry framework T
Page 83 and 84: China ■ Zhongguancun (ZGC) Life S
Page 85 and 86: India The life sciences industry is
Page 87 and 88: India To support the distribution c
Page 89 and 90: Indonesia About 35 companies are fo
Page 93 and 94: Singapore Fiscal & political resour
Page 95 and 96: Emerging cluster governments in Asi
Page 97: www.joneslanglasalle.com ©2011 Jon
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