Puerto Rico Manufacturing Capacity and the Automated Actuator Active Bag Ventilator (A3B Vent.) Project

Introduction

My name is Yoel F. Rivera Santos, President of Ultimate Solutions Corp., a Puerto Rican company with offices in Caguas, United States and Spain that is dedicated to offering a wide range of services-Validations, Automation, Serialization, Packaging, among others- to the Living Sciences Industry.

This Case Study has the purpose of exposing the trajectory that we have traveled with the manufacture in Puerto Rico of an emergency ventilator – Automated Actuator Active Bag Ventilator (A3B Vent.) – during this COVID-19 pandemic. As an entrepreneur for almost 15 years, I want to show with a specific project the capacity that the Island has to manufacture medical devices and encourage others to contribute with their projects for the development and progress of our country.

Background

A week after the curfew began in Puerto Rico because of COVID-19, on March 16, 2020, my partner Ignacio Muñoz (owner of AutoPak Engineering Corporation) called me, with the interest of manufacturing an emergency resuscitator “Emergency Use Resuscitator System (EURS)”or commonly known as mechanical ventilator. There was a genuine concern that the hospitals were not supplied and there were shortages of ventilators in Puerto Rico, just as it happened in other countries.

At the time, I considered the idea to be outside of our technical capabilities because our experience is manufacturing and validating packaging equipment for the Life Science Industry and not medical devices. I decided not to be part of the project because I was focused on looking for options to support the work of our 145 employees in Puerto Rico, the United States and Spain.

Several weeks later, Gilberto Alvarez, Sales Manager at AutoPak Engineering, approached me again to develop the ventilator website¹. (Rivera, 2020). This time, I accepted and became involved in the project.

An unprecedented coalition of diverse professionals had been formed. They gave shape and structure to that titanic task of research, conceptualization and defining a medical device with the capacity to save lives.

The group was made up of representatives of the government of Puerto Rico (Induniv, PR DDEC), professors from the University College of Mayagüez and representatives of different private entities such as: Pharmalex, Hewlett Packard, Engiworks, Rockwell Automation, Ciracet, Hospital Damas de Ponce, LGP Law, Techno Plastic, Viant, R&H Product, SJT Manufacturing, Centro Neumológico del Oeste, CINCO Engineering; a team of professionals and experts with the capacity, knowledge and experience necessary to make this task a reality.

During the journey, some entities understood that the project did not align with their long-term strategies and there were two vacancies that we could fill with the technical capabilities of our company:

1. Design the ventilator controls and programming
2. Develop the strategy, regulatory documentation, and validation to submit the ventilator for approval by the Federal Drugs Administration (FDA).

I understood that my contribution could go beyond the development of its website. On April 21, 2020, Ultimate Solutions Corp. joined the project and with a team of highly trained resources, we began to work in a formal and committed manner.

Automated Actuator Active Bag Ventilator (A³B Vent.)

Design

The design of our ventilator follows the model developed by the MIT university in its project: “MIT Emergency Ventilator Project²” (MIT – Massachusetts Institute of Technology, 2020).

MIT’s objective was to provide on a web page the best and largest amount of information possible focused on the safety and automation of a manual resuscitator (Ambu Bag). MIT’s design has been very successful and was adopted by companies such as Spirowave³ (Steve Lohr, 2020) and Fitbit⁴ (fitbit, 2020). In Cuba they also used the information and design of MIT as a reference for the development of their own emergency resuscitators. For us, using this model was a great success, since the website is frequently updated with technical information.

However, our team modified the MIT model mechanically and electrically, integrating components commonly used in the machines we manufacture for the Living Sciences Industry.

A³B Vent. FDA Review Process Under EUA

• Monday, June 29, 2020 – After nine weeks of work, we sent the necessary documentation to the FDA for review and approval of our A³B Vent.
• Wednesday, July 1, 2020 – We received the Pre-Authorization number (PEUA 201460) to begin the review and evaluation of our ventilator.
• Sunday, July 12, 2020 – The FDA assigned a person to review our documentation and design.
• Monday, July 13, 2020 – We received the first comments and requests from the FDA reviewer.

Finances and Implementation Time

The chart below shows the current and total estimated investment of Ultimate Solutions Corp. in this project. We share this information with the purpose of fostering the interest of potential investors and the commitment to develop similar projects in Puerto Rico.

• The estimated investment of the total project implementation is $ 250,000; this without including the final investment of the “Contract Manufacturing Organization” (CMO) in compliance with the “International Organization for Standardization” (ISO) 13485 required to manufacture the medical device.
• Final investment estimate including CMO is $ 350,000.
• This cost estimate is to meet the minimum requirements for a temporary approval “Emergency Use Authorization” (USA) issued by the Department of Health and Human Services (HHS) on February 4, 2020⁵ (US Food and Drug Administration (FDA), 2020.
• Implementation time for the A³B Vent. project is 3 to 4 months.

Pharmaceutical Product Global Manufacturing Vulnerability

Since the 1990s and due to various factors, the United States and other world powers have acquired in China the active ingredient in the medicines they manufacture6. (Gibson & Singh, 2018). The COVID-19 has exposed the risk and vulnerability of these countries due to this dependency. The following infographic from Invest Puerto Rico shows the most dependent active ingredients in China for some of the medicines commonly used in our homes and hospitals in the United States7 (Invest Puerto Rico, 2020).

There is genuine concern on the part of various world powers that China largely dominates the pharmaceutical active ingredient market and undermines the stability and security of the health systems of all these countries. Today, the United States Congress and a bipartisan group see Puerto Rico as an option to mitigate this risk⁸ (Roy, 2020) due to its manufacturing capacity.

Puerto Rico and United States Economy Impact

For the past 60 years, Puerto Rico has been one of the leading manufacturers of medicines, medical devices, and biotechnology globally. Despite the economic recession and the elimination of section 936 of the Internal Revenue Code in 1996, the manufacture of medicines and medical devices is still the economic engine of our Country. The non-profit entity “Invest Puerto Rico”, created to promote the Island as a competitive investment jurisdiction to attract new businesses and capital investments, has several infographics that summarize the relevance of our manufacturing. Here, some data provided on your website: https://www.investpr.org/biosciences-sector-profile

Public Policy and Economy of Puerto Rico

There are two projects submitted to the United States Congress by the Resident Commissioner in Washington, Jeniffer González, to attract the manufacturing industry to Puerto Rico. The projects are:

• Project HR 6443 that “proposes credits based on economic activity generated by investments in depressed areas of the United States and its territories” ⁹. (Feliciano, 2020)
• Project HR 6648 that “proposes to exempt the profits of companies established in the United States territories from the GILTI tax, a federal tax that applies to all companies established outside the United States and therefore do not contribute based on the corporate tax return of the Internal Revenue Bureau ”¹⁰. (Feliciano, 2020)

In turn, the President of the Senate of Puerto Rico, Thomas Rivera Schatz issued a concurrent resolution R. Conc. Of S. 99, to “request the Congress of the United States of America, equal treatment to Puerto Rico in all legislation, policy or economic, contributory and response program to COVID-19, as a permanent part of the United States¹¹… ”(Schatz, 2020).

However, González and Schatz do not carry the same message to Congress. González’s projects seek options to bring manufacturing, while Schatz’s resolution stipulates that turning Puerto Rico into the 51^st State takes precedence over retaking manufacturing that is imported from China today.

Currently, Puerto Rico has a debt of $ 73,000MM and our economy continues in recession since the close of section 936. The following graph published on March 16, 2020 in Forbes magazine, shows the impact on the Gross Domestic Product (GDP) of Puerto Rico before and after the removal of section 936 in 2006⁸. (Roy, 2020)

Conclusion

In our effort to create in Puerto Rico, and by Puerto Rican hands, this emergency ventilator we have learned the following:

• There is an imminent danger that puts the health and safety of all citizens at risk. We must look for options to minimize the total percentage of active ingredient that the United States buys from China to manufacture our medicines and medical devices.
• Puerto Rico continues to be relevant in the global manufacturing of medicines and medical devices. We are the largest exporting state for pharmaceuticals in the United States.
• Our A³B Vent. project demonstrate the capacity and technical depth to develop drugs and medical devices in Puerto Rico.
• There is a will to attract the biopharmaceutical manufacturing industry to Puerto Rico. We lack unity to nurture and promote our competitive advantages. At the same time, we need to execute a strategy to mitigate the impact of decisions made in the past, such as the tax imposed on the “Foreign” industry under Law 154 of 2010¹¹ (Department of the Treasury, Puerto Rico, 2010). This law imposes a 4% tax on “foreign” calls. Projects like this have lacerated the trust of these multinationals and potential investors who recognize our experience and technical capacity in this industry.
• Far from the political issue and territorial status of Puerto Rico, there is great enthusiasm for the possibility of retaking our global place as manufacturers of medicines and medical devices for the Life Sciences Industry. However, we are challenged that the message and desire must come from all sectors in Puerto Rico.
• Despite our specific regulatory knowledge of validating equipment and computer systems, we need more regulatory experts to submit a medical device like the A³B Vent. to FDA approval. We must change our mindset from manufacturers to designers. The design gives us complete visibility and experience of the process necessary to create value.
• We have not developed a business model or strategy to monetize our A³B Ven. Now, we do not see the need for ventilators in Puerto Rico and hope that they will never be necessary. However, when we evaluate the cost of current investment vs. the opportunity to export to markets such as the United States, Europe and some countries in South America, projects like this one become attractive for local and foreign investors.
• We have many opportunities to minimize the current cost of our ventilator and to improve the manufacturability and assembly process to increase profits.

Ultimate Solutions Corp. was involved in this project for the following reasons:

• Expand our design capabilities at the level of controls and programming more focused on the ISO Standards required to manufacture a medical device.
• Know and apply the regulation, ISO Standards and FDA requirements in a holistic way from design to final approval.
• Confirm the viability of Puerto Rico to bring manufacturing as the main economic strategy to boost the local economy.

We do not know what the FDA conclusion will be about our emergency ventilator, although we are very positive that it will be added to EUA Appendix B. The learning gained in this project for our organization is one that I could not describe. Our investment and effort are justified with all the ideas and possibilities that we have discovered along the way.

We have a unique opportunity to retake our position in the world’s Biopharmaceutical manufacturing. We have the talent and the ability to do it. Not only would we improve the local economy, but we would also actively contribute to the manufacture of the highest quality medicines and medical devices to ensure the health and safety of all citizens.

Very soon, those who, motivated by genuine concern, gave birth to this great idea, and courageously undertook the development of the A3B Vent project. They will have the opportunity to publicize the finished product in detail and every Puerto Rican will be able to see, understand, and feel proud of how much can be accomplished in Puerto Rico.

I appreciate the opportunity of knowledge and vision acquired in the process, for me and for my team Ultimate Solutions Corp.

I wish you a lot of success and I invite the private sector, Universities and the Government to unite, to believe in Puerto Rico, to launch without fear, as did this group of professionals who have earned my full respect and admiration.

The opportunity is one and we must take advantage of it.

References

1. Rivera, Y. (2020). Automated Actuator Active Bag Ventilator. Retrieved from A3B Vent: https://www.a3bvent.com/
2. MIT – Massachusetts Institute of Technology. (2020). MIT Emergency Ventilator. Obtenido de https://www.mit.edu/: https://emergency-vent.mit.edu/
3. Steve Lohr. (2020, April 20). New York Needed Ventilators. So They Developed One in a Month. Obtenido de The New York Times: https://www.nytimes.com/2020/04/20/technology/new-york-ventilators-coronavirus.html
4. fitbit. (2020, June 3). Fitbit Introduces Fitbit Flow, a Low-Cost Emergency Ventilator, to Help Address Urgent Global Needs During COVID-19 Crisis. Obtenido de fitbit: https://investor.fitbit.com/press/press-releases/press-release-details/2020/Fitbit-Introduces-Fitbit-Flow-a-Low-Cost-Emergency-Ventilator-to-Help-Address-Urgent-Global-Needs-During-COVID-19-Crisis/default.aspx
5. US Food and Drug Administration (FDA). (2020, February 4). Coronavirus Disease 2019 (COVID-19) Emergency Use Authorizations for Medical Devices. Obtenido de US Food and Drug Administration (FDA): https://www.fda.gov/medical-devices/emergency-use-authorizations-medical-devices/coronavirus-disease-2019-covid-19-emergency-use-authorizations-medical-devices
6. Gibson, R., & Singh, J. P. (2018). China RX: exposing the risk of America’s dependence on China for medicine. Amherst, New York: Prometheus Books.
7. Invest Puerto Rico. (2020). BioScience Industry in Puerto Rico. Retrieved from Invest Puerto Rico: https://www.investpr.org/biosciences-sector-profile
8. Roy, A. (2020, March 16). Puerto Rico Can Help The U.S. End Its Dependence On Chinese Pharmaceutical Ingredients. Retrieved from Forbes: https://www.forbes.com/sites/theapothecary/2020/03/16/puerto-rico-can-help-the-u-s-end-its-dependence-on-chinese-pharmaceutical-ingredients/#792cf1b02a40
9. Feliciano, V. (2020, June 10). Posible impulso federal a la manufactura de Puerto Rico. Obtenido de Punto de Vista / El Nuevo Día : https://www.elnuevodia.com/opinion/punto-de-vista/posible-impulso-federal-a-la-manufactura-de-puerto-rico/
10. Schatz, T. R. (2020, March 24). R. Conc. del S. 99. Obtenido de Senado de Puerto Rico: https://www.senado.pr.gov/Legislations/rks0099-20.pdf
11. Departamento de Hacienda, obierno de Puerto Rico. (2010, October 25). Impuesto a Corporaciones Foráneas. Retrieved from Hacienda.Gobierno.PR: http://www.hacienda.gobierno.pr/comerciantes/contribucion-sobre-ingresos/impuesto-corporaciones-foraneas

Author: Yoel F. Rivera