Production by Ireland’s pharmaceutical sector fell sharply in September but it is too early to say if it was part of a longer term decline, says the CSO
According to figures released by Ireland’s Central Statistics Office yesterday, output from companies classified as producers of ‘basic pharmaceutical products and preparations’ – which include manufacturers of vitamins, hormones and antibiotics - fell 35.2 per cent from August.
CSO researcher Stephanie Kelleher told in-Pharmatechnologist.com that: “The pharmaceutical industry in Ireland is volatile which can often have very large month on month decreases or increases,” adding that “This month there was a general decline among the majority of pharmaceutical companies.”
She also explained that: “Monthly changes of plus or minus 10 to 20 per cent would be reasonably common and in recent months there was a 25 per cent decrease in November 2011 and a 31 per cent increase in January 2009.”
“The year on year fall [31.8%] is high but the annual decrease on the 3 monthly rolling figure is 6.4 per cent. We will need more data to consider if it is significant or not.”
Davy Stockbrokers analyst David McNamara agreed about the volatile nature of the sector but pointed out that: “September's fall was also well down on the year [18 per cent] and perhaps represents the first signs of patent expirations in the pharmaceutical sector. “
Bloomberg predicted that the loss of patent protection for blockbuster drugs – including several made in Ireland like Pfizer’s cholesterol treatment Lipitor – would reduce sales by as much as 52 per cent in 2013.
This may explain the longer decline according to McNamara who said: “This could have a knock-on effect on pharmaceutical exports, which account for over half of all merchandise exports. This is a worrying development.”
Alan McQuaid of Merrion Stockbrokers was also concerned about the longer terms implications for Ireland’s ‘modern’ manufacturing sector - including the pharmaceutical industry – which accounts for a large proportion of the country’s exports.
He said that: “Manufacturing growth over the remainder of this year is expected to be primarily driven by industries under the “Modern” umbrella.
"Given the unfavourable global economic backdrop, especially in the Eurozone and UK, the worry is that overall production will continue to weaken sharply, which doesn’t augur well for the prospects of Irish exports, an integral part of Ireland’s economic recovery hopes, in the short-term.”