Exports from Ireland’s pharmaceutical sector are now valued at €55bn and account for 50pc of total exports from the country. The sector faces some challenges, however, such as the skills gap, high costs and global over capacity.
The Minister of State for Small Business John Perry revealed the latest findings about Ireland’s pharma sector this morning at a seminar held by the Irish Pharmaceutical Healthcare Association.
The industry itself contributes total tax receipts of €3bn annually to Irish economy.
Right now, nine of the world’s top 10 pharmaceutical firms and 15 of the top 25 medical technology companies have significant operations in Ireland, Perry said.
He said that the Research Prioritisation Report will now define a future pathway for Government spending in research, development and innovation in Ireland.
As well as attracting some of the world’s leading pharmaceutical companies to set up shop here, Perry spoke about how the country has now positioned itself as a "global hub" for life sciences. He pointed to the presence of companies such as Abbott, Amgen, Bristol-Myers-Squibb, Eli Lilly, GlaxoSmithKline, and Johnson & Johnson that have set up subsidiaries in Ireland.
But what are the challenges for the pharma industry in Ireland now? Obstacles facing the sector include the impending expiry of patents, global over capacity, significant R&D costs, as well as a low pipeline for new products, said Perry.
He also spoke about downward pricing pressures from healthcare consumers, governments and insurers as having an impact on the industry.
As for Ireland’s particular challenges, Perry indicated that costs have to decline, especially around labour and energy charges. He said the skills gap has to be tackled.
As well as this, Perry said the Government has to address the "fragmentation" in Ireland’s supporting infrastructures for clinical R&D and innovation.
On the Irish side, he said the country needs to tackle the lack of engagement by the healthcare system with industry, especially in relation to research and clinical trials.
Health Innovation Hub
Regarding the Government’s Action Plan for Jobs, Perry spoke about key action areas for the health and life sciences sectors in 2012.
This includes the setting up of a ‘Health Innovation Hub’. Such a hub would "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," he said.
Health Information Bill
Another Government action will be to enact a Health Information Bill. Its aim would be to support a conducive environment for health research in Ireland, said Perry.
He also spoke about how the Government would be focusing on making Ireland a global hub for the medical devices industry.
As for IDA Ireland’s role over the past 30 years in attracting such pharma and life sciences players to Ireland, he said the Government would continue to focus on ensuing a highly skilled workforce to meet the needs of such multinationals. Industry-academia collaboration would also continue to be a priority, he said, as well as maintaining Ireland’s 12.5pc corporate tax rate and a 25pc R&D tax credit.
Perry also pointed to how there is no stamp duty on intellectual property transfer in Ireland.
Our indigenous competence
But as well as the multinationals in Ireland, he also spoke about Ireland’s "thriving indigenous sector".
"Irish companies are competing successfully in international markets throughout the world. This sector has been growing at an average of 13pc per annum over the last four years with employment growing by 7pc last year."
He said Ireland has shown its competence to develop, manufacture, distribute and service patient-centric solutions, ranging from devices to drugs, from managing information and controlling process quality to managing global supply chains.
"We can be proud of the fact that the Wyeth development in Grangecastle, Dublin, which is part of the Pfizer Group, is one of the largest integrated biopharmaceutical campuses in the world and is the only facility in Europe to manufacture biopharmaceuticals, pharmaceuticals and vaccines in the same facility," Perry said.