Irish drug industry must attract more process development

Related tags Tax Pharmacology Ireland

A science and technology advisory group has called on the Irish
government to ensure that the country remains competitive in the
pharmaceutical and chemical industries by developing R&D
operations and, in particular, fostering a good environment for
process development.

A science and technology advisory group has called on the Irish government to ensure that the country remains competitive in the pharmaceutical and chemical industries by developing R&D operations and, in particular, fostering a good environment for process development, i.e. the applied research phase between drug discovery and its commercialisation.

"Ireland must seize the opportunities to embed the PharmaChem industry by encouraging it to undertake further process development here,​" said Edward Walsh, chairman of the Irish Council for Science, Technology and Innovation, introducing a recently-published document entitled 'Embedding the PharmaChem Industry in Ireland'.

Ireland has a strong track record in enticing PharmaChem companies to set up manufacturing operations within its borders, helped by a generous tax regime, but these industries are coming under increasing pressure. In pharma, for example, many top-selling drugs are coming to the end of their patent protection and new and modified drugs are being sought to replace the revenue stream that will be lost. The high costs of development and manufacture are driving the trend to reduce the time to market through innovations in product and process development.

"Consolidation of company activities by locating process development R&D close to manufacturing helps companies to scale up processes quickly and efficiently, to troubleshoot and to optimise production,​" according to the ICSTI's document. Process development is also a lower-risk sector than drug discovery, as it is often applied to a drug already close to market or to a series of drug candidates, with multiple chances that a compound will be a success.

The PharmaChem sector last year accounted for 37 per cent of total Irish exports and employs over 20,000 people in more than 80 facilities across the country, bringing in around €700 million in corporate taxes in 2001. Most of the Irish sector focuses on manufacturing and is split 60:40 between active pharmaceutical ingredient companies and those producing finished products, with a minority group involved in formulation development work.

The ICSTI notes that global competition for the location of new manufacturing and R&D facilities is fierce, with countries such as Singapore and Puerto Rico providing effective corporate tax rates of 0 per cent in conjunction with R&D funding and facilities and training grants.

"This sector is vital to the Irish economy and can continue being so, but only if the industry can respond to the changing global environment. Unless the industry can remain competitive, development and manufacturing will locate elsewhere​," said Walsh.

The ICSTI statement recommended the creation of fiscal, business and research conditions to support process development through a low corporate tax regime, government support for R&D and implementation of both a national waste disposal strategy and recommendations from the government's Task Force on the Physical Sciences to help Ireland attract and retain skilful scientists.

Related topics Ingredients