An Incredible success Story – Ireland’s pharma sector

An Incredible success Story – Ireland’s pharma sector


Initially, the pharma industry in Ireland was largely involved in producing active ingredients in bulk for export to other countries to be processed into finished products (tablets, capsules etc.).  During the 1960s there were only a handful of indigenous companies. The main players were involved in the formulation of over-the-counter (OTC) drug products. During the 1970s and the first half of the 1980s, five companies started producing veterinary pharmaceuticals while a few additional companies started formulating OTC drug products. Only one of these companies employed more than 50 staff. (Source: NIRSA working Paper Series- )
With the inflow of Foreign Direct Investment (FDI) during 1960, Ireland saw the beginning of a new era in the pharma sector. FDI brought some of the world’s largest pharma and top Medical Technology companies to Ireland. The reconstituted IDA (Industrial Development Authority) in 1970, set out to seek foreign investments in growing sectors with well planned marketing strategies. The IDA’s mission successfully paid off.  Its effort led to the arrival of some of the largest global pharma companies in Ireland.
The initial entrants were pharma giants like Glaxo Smith Kline, Merck, Pfizer, Genzyme for carrying out their activities in Research and Development, Manufacturing, Business services with their headquarters in Ireland. Subsequently plants were set up for the production of finished products.
The arrival of these companies created large number of employment opportunities as well.
This was followed by more companies that came and set up research centres and were involved in joint research projects with Irish Universities.
Here’s taking a look at the factors that attracted foreign companies:

  • Highly educated and resourceful workforce
  • Regulatory agencies lending full support during start-up
  • Favourable Government policies pertaining to foreign investors
  • Grants from IDA (Industrial Development Agency, Ireland) for capital, employment, research and development, and training programs.
  • And last but the least- lowest corporation tax, the lowest in Europe which is 12.5%.

Very soon, the pharmaceutical sector made an enormous contribution to the generation of wealth in the Irish economy and experienced significant growth in the following years. The pharma sector, alone accounted for nearly fifty per cent of the country’s total economic growth.
The Irish economy was seen as the most successful in the world. 1990 – 2007 was the Celtic Tiger era.

2008-Irish Financial Crisis – A year of agony and anxiety The year of global recession- global economy was almost in shambles. And Ireland was one of the nations to have suffered the most. The country that was once referred to as ‘Celtic Tiger’ went through disastrous phase – bank scandals, strikes, rise in unemployment, and severe slump in property market and above all emigration. Central Statistical Office, Ireland reported that 35,000 people left the country. This situation continued almost till the middle of 2009.
Ireland’s economic downfall made headlines and many experts in the economical field wondered if the country could ever recover the financial damage it had suffered.
But interestingly, the Pharma sector along with a couple of other industries were not affected because the companies focused primarily on manufacturing for overseas market.  The exports helped the companies sustain and also helped the overall country’s economy from further crisis.
That year, the pharmaceutical net exports exceeded €14 billion making Ireland the second largest net exporter of pharmaceuticals in the world. Using the broader pharmaceutical measure, exports exceeded €44 billion, or over 50% of all exports from the country.

2009 – Crisis continues, but pharma sector moves on.
EEN-Ireland (Enterprise Europe Network) factsheet report of April 2009 mentioned- “The Irish pharmaceutical sector is continuing to grow strongly and has added significantly to the country’s strong economic performance in recent years.
This was one of the trends in the Pharmaceutical Sector last years, but a change has come since the economic recession. 2009 won’t be a very successful year and it is necessary to make sure that your company survives. It isn’t known yet, how the result will look for the Pharmaceutical Sector, bur expectations are that pharmaceutical companies in Ireland are continuing to grow, although the profit margin will be lower in 2009.”
2010 Scenario
Life Sciences exports reached €56.8 billion, 8.5% of Global Life Sciences sales

Base to 15 of the top 20 medical technology companies in the world
9 out of 10 global pharma companies, producing 7 out of 10 global popular products

In 2011 the Irish pharmaceutical and chemical sector exported products to the value of € 56.1 bn, up by 5.4% from € 53.2 bn. In 2010
Ireland’s pharmaceutical exports are the 7th largest in the world.
Ireland is the largest net exporter of Pharmaceuticals in the world.
25300 people are employed in the Irish pharma and chemical sector.
46% of which are third-level graduates
25% of all PhD researchers in Irish industry are employed in the sector

  • (Source: PharmaChemical Ireland)

2012 – Golden beginning
The year began with announcements of further investments in the Life Science sector in Ireland. Some of the major industry players announced about their projects that will be adding more feathers on the cap of Irish economy in days to come.
In the very first month (January),  Allergan Pharmaceuticals Ireland announced that it will invest $350mn. for its expansion program in its Westport operations for its development and manufacturing facilities. This is expected to create 200 new job opportunity.
Abbott plans to announce € 85 mn in its pharmaceutical manufacturing operations for expansion of its facility creating about 175 skilled jobs opportunity.
Eli Lilly & Co, a global major in biopharmaceuticals is to invest € 330 mn for a brand new facility, which will also involve expansion of its existing activities in the Kinsale site to establish world class manufacturing facility. This is expected to provide around 200 highly skilled jobs.
Mylan Inc.’s announced an annual investment up to €76 mn($100 million) over the next five years, including funding for expanded research and development (R&D) capabilities, and support from the Irish government through IDA.  Mylan will add more than 500 new positions to its Ireland-based workforce by 2016.
Diaceutics to establish development and commercialisation facility in Dundalk
Amgen’s $200m. plus investment will be for  the construction of an approximately 11,700 square metres building extension, new production plant, expanded warehouse and the major refurbishment of the existing buildings.
ResMed , a global leader in development, manufacturing and marketing of medical products for diagnosis, treatment and management of respiratory disorders is expanding its Research Development and Innovation (RD&I) facility in Dublin over the next three years, with the creation of up to 50 new RD&I positions.
Aspen, a leading generic pharmaceutical company is planning to expand its mandate making Dublin its centre of excellence for a variety of Global and EMEA activities
The above mentioned companies and their agenda look promising for Ireland, the ‘Celtic Tiger’. But the same shall also put forth certain challenges:

  • Impending expiration of many patents; this will lead to a significant fall in revenue.
  • Lack of drugs in R & D stage ready to replace drugs whose patents are about to expire.
  • Rising costs of R & D due to increasing legislative requirements and growing technological sophistication.  As a result, pharmaceutical firms are adopting cost saving strategies such as job shedding in order to remain competitive.
  • Increasing competition from new low-cost, overseas locations.
  • Global Consolidation.
  • The green agenda and the international drive to curb carbon emissions mean even tougher regulations and additional taxes on water and energy.
  • Demands for regulatory data have almost doubled in the last 2 years thus increasing the time to get a product to market.
  • Loss of talent/skills through emigration

The government is fully aware of these problems and it is committed to overcome these areas.

Minister for Small Business, John Peryy, T.D., during his address at the Irish Pharmaceutical Healthcare Association (IPHA) Breakfast Seminar in February this year said,

“The Government is committed to supporting the industry in meeting and overcoming these challenges. Our Jobs Action Plan has identified a number of key actions to be undertaken during 2012 in respect of the Health/Lifesciences Sector. These include:

Delivering a Health Innovation Hub to drive collaboration between the health system and commercial enterprises leading to the development and commercialisation of new healthcare technologies, products, services and start-ups emerging from within the health system and/or firms;
Enacting a Health Information Bill to support conducive environment for health research in Ireland. This will streamline the ethics approval process for health research not governed by statutory regulation and EU law. The Bill will also provide a legal framework for the introduction of an individual patient identifier;

Supporting the development of Ireland as a Global Centre of Excellence for the Medical Device industry by providing a local high-quality, wide-scope, responsive CE mark certification service.

I can assure you that the Government is committed to delivering on its commitments in the Plan.

I have no doubt that the pharma and life sciences sectors will be key to Ireland’s economic recovery and job creation efforts, offering high value-added employment opportunities.”

 Today, there are one hundred and twenty companies having plants, which include 13 of the 15 largest global pharmaceutical companies thereby making Ireland the world’s largest player in pharma production.

Highly advanced in technology, state of the art equipment and stringent measures taken in quality control procedures are the key aspects in offering wide range of products and services, right from research and development for new medicines to manufacturing and marketing of new medicines.

Some Words of encouragement
“Now is the time to invest in Ireland where property is relatively a steal. You have the best educated workforce in the world…You’d have to be nuts not to take advantage of the unique investment opportunity presented by one of the most business friendly countries in the world, with the youngest, best-educated workforce in Europe.
(Source: Bill Clinton – 9 February 2012 New York Invest in Ireland Summit)

  • “Today, I want to say to our friends in the multinational sector who continue to invest so strongly in Ireland & Europe, there will be no change to Ireland’s 12.5% Corporation Tax rate.”
  • (Source: Financial statement of the Minister for Finance, Budget 2012)

“Abbott has had a presence in Ireland for more than 65 years and began manufacturing in the country in 1974. Sligo is an important part of Abbott’s pharmaceutical manufacturing network and we are pleased to expand it to support future production needs. The success of our Sligo facility is due to the dedication of its staff and management “

(Dr. Azita Saleki-Gerhardt, President, Global Pharmaceutical Operations, Abbott).

“This investment is an endorsement of the Lilly Kinsale site’s success in developing a biopharmaceutical business in recent years and demonstrates our ability to rise to that challenge. This is in no small part due to the site’s excellent performance record, the talent of the workforce, and the support from IDA Ireland,”

(Ed Canary, general manager of Eli Lilly’s Kinsale site.)

“Ireland…has proven to be a valuable location for Mylan, providing the company with access to a skilled and highly educated workforce that shares our strong work ethic and commitment to excellence.

(Mylan CEO Heather Bresch)

“We are very pleased to expand our investment in Ireland, We applaud the Irish Government and IDA Ireland for its vision in promoting innovation and science, which align with Amgen’s commitment to innovation and investing in scientific programs that make a difference for patients.”

(Martin VanTrieste, senior vice president of Quality at Amgen)

FDI reaped fruits because IDA (Industrial Development Agency, Ireland) played a key role by facilitating conducive infrastructure.
IDA Ireland – The driving force for FDI
IDA Ireland is one of the main government agencies formed as part of the Department of Industry & Commerce to develop trade and business by bringing in foreign investors to Ireland. (History of IDA Ireland: )
With its well researched and well planned marketing strategies, IDA Ireland, set out to explore major growing sectors looking for industrial developments – by focusing exclusively on the promotion and development of high-quality foreign direct investment (FDI) in Ireland, in the manufacturing and international services sectors.
Their efforts have paid off. IDA Ireland is responsible in a major way for the growth of Irish economy. It plays a key role in getting FDIs in the life science field, mainly the pharma sector.
With its 13 offices in different countries, IDA has enabled easy access to its customers.
Ireland-India partnership
In June this year, Ireland  India Institute was established at Dublin City University (DCU)  which is aimed at supporting  collaboration in education, research and knowledge exchange between Ireland and contemporary India. Its mission is to support, facilitate and promote vibrant intellectual engagement and mutual understanding between the two countries.
DCU is engaged in research partnerships with Indian Institute of Science, Bangalore (IISc), Indian Institute of Technology Delhi (IITD), Indian Institute of Technology Madras (Chennai) (IITM), National Physics Laboratory,National Institute of Technology Karnataka (NIT) and Vellore Institute of Technology (VIT).( )
In the same month, Ireland Ambassador to India, Mr. Feilim McLaughlin, led an official delegation to Kerala, India, with a mission to enhance the awareness of Ireland as a destination for Indian investment.
Patrick O’Riordan, commercial counsellor, Embassy of Ireland, New Delhi, who was part of the delegation, said that the medical devices and precision engineering industries could open up opportunities for collaboration.
(See report in The Hindu:
LifeScienceWorld acquires further information on IDA Ireland’s mission on Ireland-India business partnership

In an exclusive report sought by  Sankar Iyer of  LifeScienceWorld, Ms. Minakshi Batra, Director, IDA Ireland, India informs about the current programs and future plans. (See Box below)

Minakshi Batra Director, IDA Ireland, India

LSW:  2012 began on a bright note for Ireland’s economy with number of announcements made by global pharma companies confirming their activities in the country. IDA Ireland, India  has already started working on consolidating Ireland-India partnership programs, the visit to Kerala in June this year by the Ireland delegation led by Ireland Ambassador to India that included your participation, seemed very fruitful. Few words on the outcome of this visit:

 Minakshi Batra:  The outcome of our trip to Trivandrum has been successful as we have achieved what we set out to do. We addressed a series of Technology companies under the aegis of the Group of Technology Companies who organized the event for us and are following up with them for their future investment in Ireland.

LSW:  On the Indian Life Science sector, particularly, the pharma and biotech areas has IDA Ireland met any of the Indian pharma, biotech companies. If so, tell us something about the outcome.

Minakshi Batra:  IDA Ireland has been in touch with all the leading Pharma and biotech firms in India. The appetite in Indian companies is for acquisitions, marketing collaborations and authorizations. This is a work-in-progress. Wockhardt, Ranbaxy and Reliance Life Sciences have made investments in Ireland.
LSW:  Objectives of the collaboration between Network of Excellence for Functional Biomaterials (NFB)  and  four of India’s  leading institutions – Indian Institute of Science (Bangalore), Indian Institute of Technology (Kanpur and Delhi) and the Sree Chitra Tirunal Institute of Medical Science and Technology in Trivandrum. 
Minakshi Batra:  I would not be able to comment in this as there is no involvement from our side. It seems a good initiative.
LSW:  2012 is coming to an end. Is there any deal closing this year.
Minakshi Batra:  We have already had five Indian companies that have entered Ireland with significant operations. Most are in the ICT space.
LSW:  You must be having a target list of Indian pharmaceutical and biotech companies, who you feel is your prospective customer. Your forecast for 2013 on such companies  and your proposed meetings with them.
Minakshi Batra:  We hope to get Pharma/Biotech companies from India to enter Ireland and we hope that 2013 will be a year when our engagement with these companies fructifies.
LSW:  On the marketing strategies that IDA Ireland has worked out for approaching the Indian investors.
Minakshi Batra:  We shall continue to do roadshows across different cities in India and spreading our message through various events and marketing trips from experts in Ireland across different sectors.
LSW:  Any new activity or program devised for Indian customers
Minakshi Batra:  We hope to have more delegations from Ireland and also to take Indian corporate there for them to see what all Ireland has to offer.