Pharma investment in Ireland 'unbelievably significant'

Ireland has successfully established itself as a hub for the pharma and biotech industries, and the trend to invest in high value-added activities on the green isle shows no sign of slowing, according to Ireland's Industrial Development Agency (IDA).

With numerous big names in the industry setting up shop in Ireland (Pfizer, GlaxoSmithKline, Wyeth, Amgen and Abbott to name but a few), the region is basking in the glow of its increasing popularity, the result of a determined drive to establish itself as a prime location for pharmaceutical and biotechnology activities.

Over recent years, billions of euros have poured into Ireland as a result of investment by the sector; in 2006 Ireland saw capital investment projects that totalled €2.6bn, the bulk of which came from the pharmaceutical and biotech industries, according to Brendan Halpin of the IDA.

"The last couple of years have been particularly good in terms of pharmaceutical and biotech investments," Halpin told in-PharmaTechnologist.com.

"There has been a major increase in high added value manufacturing and R&D, with companies like Pfizer, Wyeth, GSK and more recently Gilead Sciences investing in Ireland."

Ireland has indeed become a real focal point for the industry, and has established itself as the most popular destination for development and manufacture outside the US. Fourteen of the top fifteen pharma companies are present in Ireland, according to Halpin, and seven of the world's top ten blockbuster drugs are manufactured there says Barry O'Leary, senior vice president of life sciences and ICT at the IDA.

"Life sciences are the largest source of foreign investment in Ireland," said O'Leary.

"We have a strong life sciences cluster and very strong market share; a lot of investment is driven by the existing client base."

This claim is strongly supported by the fact that many of the pharma companies present in Ireland have opted to establish several bases in the region: Abbott has no less than seven sites, J&J has six, Pfizer comes in with five, and Schering Plough and GlaxoSmithKline have four apiece.

Over the decade there has been a shift in seeing Ireland purely as a destination for low-level manufacturing operations to a location that focuses on a different area of companies' value chains, and can offer distinct advantages to firms looking for expertise, an attractive infrastructure and all-important tax breaks.

"We've followed a very targeted and focused business model to attract companies by helping them increase value in areas such as R&D, supply chain management, logistics and high value-added innovations," said Halpin.

"We've moved on from a location from which companies can serve not only the European market but one that can serve globally."

The move towards biopharmaceuticals and drugs produced by chemical synthesis has also proved good for Ireland, with steady growth over the last five years and the region having again established itself as the number one location outside the US for development and manufacturing of biopharmaceuticals.

Ireland has spent considerable time and effort in establishing its reputation as a high quality destination offering the expertise and infrastructure to attract investment. This is an aspect where it can offer significant advantages over low-cost destinations such as Asia or Africa where some companies are choosing to set up operations.

"Companies have huge confidence in Ireland and the support they receive here," said Halpin.

"It takes time to build a business environment that is reliable…the system [in Ireland] has been built up over 25 years."

Although some companies have been shifting their investments to low-cost destinations, according to Halpin these have been the more cost-sensitive manufacturing aspects of their businesses. For projects that are less cost-sensitive but still need to be competitive, Ireland is establishing itself as an attractive option, with many companies expanding their presence in the region rather than leaving.

The IDA has a great deal of confidence in the pharmaceutical and biotech industries and future growth in Ireland generated from the sector. The investments that continue to take place from pharma and biotech firms are "unbelievably significant for [Ireland] and the companies involved" says Halpin, and neither he nor O'Leary see the pattern of growing investment dwindling.

"Things are looking bright," said Halpin.