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

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 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 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 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

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