Download PDF

Register to download the report. Already a member?

 
 
Sign Up

Or

67053 1513184208HCLSReviewBulgariaDecember2017.pdf
Energy Boardroom

Type your email in the box below to read this content NOW:

Ireland: Punching above its weight

ireland

“The elements that have made Ireland attractive for decades are still here. The big difference since 2007, however, is the cost base. If you are building a pharma plant in Ireland today, it will cost 35 to 40 percent less than it did six years ago,” says Barry O’Leary, head of the IDA, Ireland’s inward investment agency, who then reels off a long list of investments into the country.

Lilly, he says, committed $420 million (€320 million) to its second Irish biotech facility. Allergan announced a $250 million (€190 million) investment in biologics in the west of Ireland. Amgen initiated a $200 million (€150 million) expansion in Dublin. Mylan declared plans to split $500 million (€385 million) between production sites in Dublin and Galway. Abbott is making a $110 mil-lion (€85 million) investment in small molecule, high potency production. Lilly, Merck, and Gilead established financial shared services centers.

O’Leary notes that these announcements came in the first six months of the 2012 fiscal year alone.

According to a report by the Irish Times, 2012 was Ireland’s best year for foreign direct investment in more than a decade. It seems that Ireland—the country that Prime Minister Enda Kenny promises will be the best small country to do business in by 2016—has become more attractive for foreign direct investment (FDI) in the wake of an economic crisis that has ravaged its domestic economy.

Not only has the cost of doing business been reduced by 10-15 percent since the onset of the recession (Ernst & Young), but Ireland has also adopted what Matt Smith, VP and head of the global pharma business for engineering giant CH2M Hill, calls a “laser-clear” focus on the customer.

From what he has seen along his globetrotting route, Smith believes, “Ireland has never been more competitive around the world. The Irish have a clear vision of who they are: their brand, their identity, and their fit in the value chain. I am confident that any manager in the country will have roughly the same impression of what Ireland can offer their business; in other markets, you will find that opinions differ on the country’s positioning in the chain. Some of the emerging markets, in particular, don’t really know who they are yet—and if you are competing without a clear vision of your value, you will get beat by a country like Ireland any day of the week.”

Ireland has been a pharma industry darling since the 1960s, when a then-newly established IDA targeted the sector as a strategic area for development. Today, the numbers are eye-catching. As reported by the IDA, nine out of the top ten—and 13 out of the top 15—pharma companies in the world have substantial manufacturing operations in Ireland. The industry has invested over $7 billion (€5.4 billion) in the market over the last decade. Ireland has become the largest net exporter of medicines in the world and the eighth-largest producer in absolute terms, with pharmachem shipments worth €55.1 billion ($71.63 billion) (2011) accounting for nearly half of Irish exports.

As Colin Kavanagh, Partner and Head of Life Sciences at local law firm Arthur Cox, puts it, if a company is a player of scale in this industry, then they have likely already invested in Ireland—“and if they haven’t, they’re thinking about it, or they have a good reason not to.” Many of those that have already invested are now diversifying their operations away from what has classically been a pure manufacturing base to include more complex value-added activities like product and process development.

The concentration of FDI has also had a strong hand in the rise of a growing indigenous life science sector, often led by Irish entrepreneurs who have either learned the ropes by working for a multinational, or built their businesses upon a foundation of collaborating with multinationals from Ireland.

Yet as multinational investment in infrastructure reaches new heights and indigenous players ramp up overseas expansion, some industry actors face a more uncertain scenario. On the local market, innovator sales operations have been challenged by recession-driven austerity. A new price-cutting agreement has report sent a clear message that the government will increasingly delink its approach between courting investment from the industry and supporting an unsustainable drugs bill. For generics marketers, long-expected regulations should open up new possibilities—but the full ramifications of prospective legislation are as yet unclear. According to Anne Nolan, head of the local innovator group Irish Pharmaceutical Healthcare Association (IPHA), companies looking to reach the 4.5 million-patient Irish market must contend with a health system that has changed as much in the last four-five years as the UK’s National Health Service (NHS) has changed in the last 40.

To read more articles and interviews about Ireland, and to download the latest report on the country, click here.

LATEST ISSUE

DOWNLOAD

Most Read

X
Download PDF

First Name:

Last Name:

Company:

Position:

Country:

Email: