Ireland’s Economic Backbone: The Pharmaceutical Industry
By business e | Nov 28 2017
Abeer Shahid examines what significance the Pharmaceutical Industry has in Ireland. These days, Ireland is no stranger to multinational corporations. The bustling tech scene in Dublin is a perfect example of this, where names like Microsoft, Amazon, and Google are all present in one building or another. However, tech isn’t the only industry thriving in Ireland. The pharmaceutical industry has become one of the biggest industries in Ireland across the whole country, with manufacturing sites present in Cork, Tipperary, Dublin, and elsewhere across the country.“Nine out of the top ten largest pharmaceutical companies in the world have an Irish presence.”
Many of these companies not only produce critical products of their portfolio in Ireland but also conduct business and sales operations here, with many corporations basing these activities in Dublin. Nine out of the top ten largest pharmaceutical companies in the world have an Irish presence.As of 2014, Ireland is the 7th largest exporter of medicinal and pharmaceutical products in the world. Ireland is also the largest net exporter of pharmaceuticals in the EU, and medicines count for over 50% of all exports from the country. In 2014 this was valued at €64 billion. Approximately 120 overseas companies have plants in Ireland, and the nation continues to see investment and diversification of the industry.On top of these imposing figures, we also have the biotech industry, a more niche area that has been seeing rapid development and increase in funding in Ireland and the rest of the world. In 2016, employment totalled over 6,600 people in Ireland and, thanks to recent investments of over €3 billion from global biotech companies, Ireland is now a leading location for the development and manufacturing of biologics. Forecast figures show that the employment figure will reach over 11,000 by 2018.So where did the pharmaceutical industry in Ireland begin? It’s a relatively new industry to Ireland, with most of the companies present coming after the 1960s. The sector started by focusing on the production of the active pharmaceutical ingredient and then shipping it to other countries to be processed into the final product. Since then, plants have also been set up in Ireland to finish the product and, in more recent years, many companies have also set up research and development facilities and have conducted joint research projects with Irish Universities.In 1973, the sector employed less than 2,000 people, and exports accumulated to less than €100 million per annum. Compare this to the modern day where the industry employs over 24,500 people. Even in the face of uncertainty, caused by recent political events such as the emergence of the Trump Administration and Brexit, pharmaceuticals are seeing investment and expansion. More sites are opening, and employees are continually being hired.“These companies also like to have developed transport routes and links they can use, such as ports and well-surfaced roads, which is something many areas of Ireland require more investment in.”
So, in the long run, what does this mean precisely for Ireland and the Irish people? Economically, things seem only to be positive. It should be recognised that the low industry tax that Ireland has become known for is likely a considerable factor for this industry growth. Additionally, pharmaceutical plants typically require a lot of space, and ideally, rural locations are preferred as they can be problematic to the residents of urban areas. These companies also like to have developed transport routes and links they can use, such as ports and well-surfaced roads, which is something many areas of Ireland require more investment in.Having said this, the more investment that these companies make and the more they continue to expand, the more development Ireland can achieve, such as in infrastructure. It also helps encourage more Irish students to pursue STEM careers and subjects, which gives them plenty of job options upon graduating without having to emigrate.Higher educated immigrants are attracted to a booming pharmaceutical industry. The more Ireland becomes a pharmaceutical hub, the more talent the country can produce and acquire, and so the more it can grow.Unfortunately, there are downsides too. The pharmaceutical industry is not immune to controversy, and almost every major company in the industry has had some form of a scandal in the recent past, sometimes even in Ireland. Moreover, regulations have become stricter with time.“Bodies like the HPRA have the authority to shut down all operations of the plant if they deem it necessary.”
Plants undergo frequent audits from authorities such as the Health Products Regulatory Authority (HPRA), for Irish exports and the Food and Drug Administration (FDA), for U.S. exports. Groups also undergo internal audits to ensure that they are always compliant. Bodies like the HPRA have the authority to shut down all operations of the plant if they deem it necessary.Overall, the future is positive for the pharmaceutical industry in Ireland, and it and the biologics industry will continue to see growth and investment, so long as they avoid any controversies and see a tangible benefit to Ireland as a whole.