Support of biopharmaceutical sector in new jobs plan a welcome recognition, but unprecedented challenges must be addressed

The biopharmaceutical industry is facing unprecedented challenges with potential job losses and a negative impact on multinational investment in Ireland, was the message from a breakfast briefing held this morning at the Davenport Hotel. Entitled The Biopharmaceutical Industry – protecting investment through sustainable policy, the briefing jointly hosted by IPHA and PharmaChemical Ireland (PCI) called on the Government to work alongside the industry to develop sustainable policies to secure and bolster the future success of Ireland’s greatest economic success story.

Employing over 25,000 people, the industry accounts for over 50% of Irish exports (€51 billion) and half of all corporation tax. However, given the unprecedented challenges the sector is facing, ensuring the sustainability of the sector in Ireland requires innovative and strategic health, economic and education policies and a collaborative joint approach.

Chaired by PCI Director Matt Moran, Minister of State at the Department of Jobs, Enterprise and Innovation, John Perry, T.D., joined IBEC Director General Danny McCoy, IDA chief executive Barry O’Leary and Irish Pharmaceutical Healthcare Association (IPHA) President David Gallagher, to highlight the serious challenges facing the industry and issued an urgent call to action for new policy to secure future biopharmaceutical investment.

Opening the briefing, PharmaChemical Ireland Director Matt Moran said: “Government policy needs to urgently recognise the very serious challenges facing the industry. A number of blockbuster drugs are coming off patent, with some commentators estimating the resulting fall in worldwide revenues to be as much as €100bn. Many of these blockbuster drugs are manufactured in Ireland. The key challenge is to continue to develop the sector as a global centre of excellence for innovation and development.

"Our healthcare policy must support access to innovative medicines and medical technologies that are developed in Ireland. It is vital that the Government continues to take a long-term view of the overall cost of healthcare. Medical treatment funding is regarded as an investment in the nation’s health and economic prosperity. Such an approach will send a positive signal to pharmaceutical companies."

IBEC Director General Danny McCoy said:“While it is encouraging to see the key role of the pharma industry highlighted in the Action Plan for Jobs, the Government needs to ensure existing employment is also protected. Ireland needs to continue to work to improve its offering to foreign investors. We need to enhance the R&D tax credit schemes  to encourage companies to base R&D functions here and continue to work to ensure our cost base is globally competitive.”

IDA chief executive Barry O’Leary highlighted how important it was that Ireland’s protects its reputation as a choice investment for multinational pharma companies and called for deeper and broader engagement of all stakeholders to work together to ensure this remains the case.

“Ireland benefits hugely from pharmaceutical investment and we are now home to 9 out of the top 10 global pharmaceutical companies.  Ireland is a key global location for pharmaceutical activities, including manufacturing, services, research and development; as a result of this a number of excellent pharmaceutical investments have been made in Ireland in recent months. Abbott recently invested €85 million in the expansion of its pharmaceutical manufacturing facility in Sligo with the creation of 175 new jobs; Allergan invested $350 million in the expansion of its development and manufacturing facility in Westport with the creation of 200 new jobs; Amgen, the largest biotechnology company in the world, acquired Pfizer’s manufacturing facility in Dun Laoghaire which marked a major win for Ireland due to Amgen’s leading position in the biotechnology industry. Meanwhile, Pfizer, the world’s largest biopharmaceutical company invested $200 million at its Grange Castle biotechnology site.’’

These are all significant wins for Ireland and further add to our position as a leading location for pharmaceutical investment. On behalf of IDA Ireland I look forward to facilitating ongoing stakeholder engagement in order that Ireland retains this position,. ” Mr. O’Leary said.

IPHA President David Gallagher acknowledged the need to make savings in the health budget but argued that this burden must be fairly shared and that any savings must be balanced against ensuring Irish patients can access innovative medicines.

At the heart of the biopharmaceutical industry is the scientific research and discovery of innovative life-saving and life-changing medicines.  We are producing innovative, cost effective, much needed new medicines which unfortunately in many cases are not reaching Irish patients as the government is not reimbursing them. We have made a significant contribution to government savings with €300m delivered under the current agreement since 2006 and an additional €240m delivered in 2010/11 in recognition of the exceptional budgetary constraints, on the express understanding this would ensure that access would be secured for new medicines. This has not happened.

The Government’s ambitious new Action Plan for Jobs, identifies the need for closer interaction between the health system and industry, while at the same time identifying the lack of engagement between the two, particularly, to quote from it directly, ‘in relation to research, clinical trials, and the development and related manufacturing of innovative healthcare products and services’.

The current situation regarding the reimbursement of new medicines is a demonstration of this lack of engagement, which is clearly being dictated by the health system authorities and not the industry”, Mr. Gallagher said.

Mr. Gallagher added that these concessions have resulted in a significant decline in the market in Ireland which was now under severe pressure and was not in a position to endure further price cuts without a very negative impact on employment and future investment. He also urged the government to consider the valuable contribution medicines make to Irish health.

“Existing cuts have already put pressure on jobs across the industry: any further reductions will raise serious question marks over the attractiveness of Ireland as a future investment location and the potential damage to employment - both existing and future would be significant. As Governments seek to maximise public health outcomes on constrained budgets, cost-effective, innovative medicines represent real value for money and efficiency. The debate has to switch from cost to value and recognition of the intrinsic role medicines are contributing to Irish health”, he added.