Pharma industry ‘faces challenge’

THE Irish economy is home to 83 pharmaceutical plants accounting for 17,000 jobs and total exports of €35 billion last year.

Thirteen of the top 15 pharmaceutical companies have Irish operations while we produce six of the top 10 drugs in the world and 12 of the top 25 drugs sold globally.

Top companies include Pfizer, Wyatt, Merk Sharpe and Dhome and GlaxoSmithKline.

Among the top drugs made here are Prozac, Viagra, Zocor and Lipitor.

It’s an impressive track record. And while the sector has deep roots in the economy, it faces some tough challenges, a leading expert has warned.

Eastern European countries offer, in some cases, zero tax to investors and also produce high quality educated scientists and pharmacists geared to the need of the sector.

Diarmuid Cahalane, managing director KE Consulting of Carrigtwohill, Co Cork, which serves the sector in Ireland, says it will have to spend heavily to meet the challenges of the future.

Irish based pharma companies are bound by Food and Drug Administration regulations and the Irish Medical Board (IMB) and a host of new regulations introduced by the Securities and Exchange Commission in the US in the wake of the Enron scandal.

KE’s job is to ensure its clients are compliant in every way with the SEC rules the FDA regulations and the IMB guidelines.

AMR Research has just issued research that puts the pressures on the Irish subsidiaries of US pharmaceutical firms in Ireland into perspective, said Mr Cahalane.

It predicts the cost of compliance over the next five years will reach the $80 billion mark. Specifically, the firm estimates that organisations will spend close to $15.5bn on compliance-related activities in 2005. That’s the total exposure of US firms in the US including overseas investments.

A US multi national subsidiary in Ireland will spend approximately $500,000 annually to achieve the across the board compliance they now face, said Mr Cahalane.

It is also an opportunity to firms here to identify and transform business areas that need improvement, he said.

Mr Cahalane believes the future is still bright for the Irish pharma sector.