---
title: "To Do: Restore the Biopharma Production Credit in U.S. Territories"
summary: |-
  Congress should restore the tax credit for biopharma production in Puerto Rico and other U.S. territories.
date: "2020-06-15"
issues: ["Taxes and Budget", "Manufacturing", "Biopharmaceutical Innovation"]
content_type: "Knowledge Base Articles"
canonical_url: "https://itif.org/publications/2020/06/15/to-do-restore-the-biopharma-production-credit-in-us-territories/"
---

# To Do: Restore the Biopharma Production Credit in U.S. Territories

# Recommendation

Congress should restore the tax credit for biopharmaceutical production in Puerto Rico and other U.S. territories.

# Details

Section 936, which released pharmaceutical manufacturers from taxes on profits made in Puerto Rico and other U.S. territories, contributed to making Puerto Rico a pharmaceutical manufacturing powerhouse, but the phase-out of the provision from 2006 to 2016 contributed to a shrinking of the sector, not to mention a 40 percent reduction in the territory’s manufacturing jobs base. This in part explains why the territory’s economy has shrunk nearly every year since phase-out of the provision began in 2006.

**Learn more:**

- Stephen Ezell, “Faulty Prescription: Why a “Buy American” Approach for Drugs and Medical Products Is the Wrong Solution” (ITIF, June 2020), [https://itif.org/publications/2020/06/15/faulty-prescription-why-buy-american-approach-drugs-and-medical-products/](https://itif.org/publications/2020/06/15/faulty-prescription-why-buy-american-approach-drugs-and-medical-products/).

---
*Source: Information Technology & Innovation Foundation (ITIF)*
*URL: https://itif.org/publications/2020/06/15/to-do-restore-the-biopharma-production-credit-in-us-territories/*