Global Dose: Focus on Ireland

May 25, 2020
Moving beyond its reputation for low taxes, Ireland's pharma industry aims for new frontiers in manufacturing

Every so often, one of pharma’s kookiest stories bubbles up from the quaint, coastal town of Ringaskiddy, Ireland and makes the rounds in the global press.

There’s something in the air that’s making people and animals feel frisky, locals like to tell reporters. The culprit? A Pfizer plant that has been situated in Ringaskiddy since 1969 and for decades, has been manufacturing Viagra. The belief by some is that byproducts from the blockbuster arousal medication have been making their way into the town’s water and air, and turning residents into “walking stiffs.”*

Rumors have also swirled that local tourism officials have pushed the tales from “Viagra village” as a way to drum up interest in visiting Ringaskiddy. And for a few days, the story inevitably does put Ireland’s pharma manufacturing sector on the public radar. But for those inside the industry, Ireland has a much different reputation.

With a marginal corporate tax rate at 12.5 percent (one of the lowest in the EU), major companies, including all of the top players in pharma, have long flocked to the lush hillsides of Ireland to set up shop. In recent years, however, Ireland’s business economy has evolved beyond simply being a so-called tax haven. Today, the country’s pharma industry is becoming known as a hub of cutting-edge facilities geared toward process innovation.

It’s not just luck

Ireland may be dwarfed in size and population by many of its cousins in the EU, but the country nevertheless commands a mighty manufacturing footprint.

More than 85 pharma companies (including nine of the top 10) operate over 100 facilities in Ireland. All told, the industry exports around $85 billion worth of products each year and is now one of the largest exporters of pharmaceuticals in the world.1

Investments in Ireland’s pharma manufacturing capacity have also remained steady in recent years. According to Tommy Fanning, head of Biopharmaceuticals & Food of IDA Ireland, the country’s economic development organization, the industry has been injected with an average of about $1 billion in annual capital investments over the last five years.

Some of the country’s biggest biopharma wins in recent years include a planned vaccine production facility by China’s WuXi Biologics that will be located in Dundalk and create about 200 jobs. Merck announced three investments in 2017 and 2018, including a new biologics drug substance facility in Dublin to produce its blockbuster immunotherapy drug, Keytruda. Shire, now owned by Takeda, has also announced two major investments in the last few years, including a new cell therapy facility in Dublin. And the list goes on.

Fanning says that all of this has added up to the creation of a sector with an expertise in molecule development and manufacturing.

“We’ve moved from being yes, a low tax location, to being very innovative in the context of getting the product to market and making sure that’s done efficiently with no break in the supply chain,” he says.

Although many pharma firms may have originally been wooed by Ireland’s low tax rate, Fanning says that once rooted there, companies find other reasons to stay.

“The big attractor for Ireland today is very much around the regulatory culture and skilled workforce,” he says.

Close to 25,000 people work directly in the country’s pharma industry, over half of which are third-level graduates.2 Leveraging the country’s skilled workforce remains a top-of-mind for the industry, especially as the sector positions itself to stay relevant in the next era of manufacturing.

Toward the leading edge

Small and large molecule manufacturing capabilities remain robust in Ireland. But according to Philip Hannon, the communications and public affairs manager of the Irish Pharmaceutical Healthcare Association, Ireland’s pharma industry is up against several key challenges including generic production offshoring and a potential loss of competitiveness.

“Potential benefits from next-generation therapeutics will be difficult to capture without significant investment,” Hannon says.

Now, laying the groundwork for those investments is exactly where the industry is focused.

“We’re looking at what we need to do to make sure we have the infrastructure to support investments in areas like cell and gene therapies,” Fanning says. “So we’ve upped the ante in terms of building skills.”

Investments in up-and-coming therapeutic classes, such as cell and gene therapies, are still in the early phases in Ireland. To help turn Ireland into a more attractive location for the kinds of cutting-edge facilities that will be needed for these new therapies, Fanning says that the country’s National Institute for Bioprocessing Research & Training (NIBRT) is now pivoting to cell and gene therapy training for pharma employees. The aim is to give Ireland a healthy supply of manufacturing professionals who are poised to propel the country’s pharma industry forward.

“These institutes work closely with the industry to understand the needs of the industry and provide the right skills,” Fanning says.

Companies in Ireland have also been at the forefront of digitization. Several pharma sites in Ireland are considered “lighthouse projects” in terms of “industry 4.0” adoption and are supported by Ireland’s large IT industry. Some companies, such as Novartis and Eli Lilly and Company, are using their facilities in Ireland to implement next-generation platforms and data analytics operations.

“This has led to a cross fertilization between life sciences, pharma and the IT sector,” Fanning says.

The emphasis on digitization has also helped attract a large number of clinical research companies and contract research organizations.

“The idea of digital clinical trials, for example, is going to be even more important with events such as the spread of COVID-19,” Fanning explains.

Yet, there are a few issues hanging over the region that are leaving the industry on edge.

Regulatory uncertainty

Brexit — it’s a word that elicits so much unease in the EU that Fanning refers to it as the “B word.”

Despite officially leaving the EU on Jan. 31 and promising to hammer out a deal by the end of this year, the UK has yet to formalize a plan for its departure. Talks among negotiators have been ongoing, even amidst the coronavirus lockdowns, but so far, have mostly ended in frustration on both sides. Thus, the exact terms of the UK’s departure and what it means for trade, security and regulations, is still being left to speculation.

Even without a Brexit deal, Ireland’s pharma sector has started making adjustments to prepare.

“The concern is to ensure continuity of the supply of medicines to the population,” Hannon says. “Because 70 percent of medicines coming into Ireland pass through the UK, particular attention has to be given to transport, customs and other logistics issues.”

Hannon also points out that because it’s still unclear what the new trade terms will be between the EU and UK, some pharma companies have invested in changing their supply routes to avoid the UK all together.

A “hard” Brexit could also mean that drugs manufactured in the UK or imported into the UK for distribution into the EU might have to be re-tested under the EU’s regulatory guidance. According to Fanning, some pharma companies have therefore moved regulatory licenses for drugs they were planning to launch in the UK to Ireland, which will maintain its regulatory clarity under the auspices of the European Medicines Agency.

Overall, Hannon says that the focus in Ireland is on not letting Brexit deliver a blow to the industry.

“The biopharmaceutical industry in Ireland, along with the government and other key stakeholders, has been engaged in intense work to mitigate the impact of Brexit,” Hannon says.

Multinational companies in Ireland are also now facing an evolving tax environment. Ireland has long dealt with public outrage over its various tax breaks for large corporations. Now, what’s known as the “double Irish” loophole, which has allowed companies to shift some non-U.S. profits to Ireland to avoid higher taxation, is set to be phased out this year. But Fanning says that support for the country’s low effective corporate tax rate remains steady.

“Everybody in Ireland understands the benefits we have from a lower tax rate,” he says. “It’s not going to change.”

The COVID-19 factor

Like the rest of the world, Ireland has been in the midst of a nation-wide lockdown due to the spread of the novel coronavirus. So far, this disruption has not impacted work at the country’s pharma plants or caused any shortages in the supply chain. According to Fanning, Ireland’s pharma companies have been taking proactive steps to limit the spread, such as implementing staggered shift changeovers to ensure that teams are not exposed to each other, and creating “contact diaries” so that workers can keep track of whom they have been in contact with.

Meanwhile, pharma companies in Ireland have been in talks to see how they can support the global push to manufacture a COVID-19 vaccine once one is approved.

“There is no doubt that we will hear about some part of a COVID-19 vaccine being manufactured in Ireland because we are such a big part of the global supply chain,” Fanning says.

It’s this importance to both its local economy and the global supply chain that Fanning says will continue to give Ireland a prominent position on the industry’s map in the years to come.

“Pharma is hugely important to the economy of Ireland,” Fanning says. “The biopharma sector is very strong — and will continue to be.” 

*Pfizer, of course, has denied the long-standing rumors, telling The Irish Sun most recently in December that its facilities “all have environmental licenses that strictly regulate air emissions and water discharges” that are in accordance with local environmental law.

1. World Trade Organization, International Trade and Market Access Data.
2. Irish Pharmaceutical Healthcare Association, Key Facts,

Top image courtesy of Saad Chaudry via

About the Author

Meagan Parrish | Senior Editor