Reliance on pharma a 'significant risk' for Ireland amid tariff dispute

Protectionist measures that impact the biopharma sector, the study said, could lead to Irish job losses, reduced investment, and a reduction in registered intellectual property 

Niall Cunneen:'Our reliance on US pharma for employment and corporate tax creates a significant risk for Ireland's economy.'

Protectionist economic measures coming out of the US could have significant impact on the pharmaceutical sector in Ireland potentially leading to job losses and reduced investment, a new study by a global consultancy group Sia has warned.

Ireland is one of the largest pharmaceutical exporters in the world due to a number of large US pharmaceutical companies operating manufacturing sites in the country. During 2024, Irish exports to the US rose to €72.6bn — of which €44.4bn were from the pharmaceutical and medical sector.

US president Donald Trump is expected to unveil a raft of new tariffs against the EU on April 2.

Protectionist measures that impact the biopharma sector, the study said, could lead to Irish job losses, reduced investment, and a potential reduction in intellectual property registered here resulting in a decrease in corporate tax receipts.

Threat of relocation

According to the study, tariffs on pharmaceutical goods will mean biopharma companies "will have to recover costs elsewhere through lower prices, seeking efficiencies to retain margins or else they will be forced to relocate".

A dual sourcing model could be adopted by some organisations, with a gradual increase in US sourcing resulting in a managed exit of the Irish market 

Niall Cunneen, an associate partner at Sia, said the success of the pharmaceutical sector in Ireland has come with a trade-off that “only 5% of facilities are dedicated to research and development (R&D), meaning Ireland has yet to cultivate a strong indigenous innovation ecosystem”.

"Our reliance on US pharma for employment and corporate tax creates a significant risk for Ireland's economy.

"Global leaders such as the US, China, and Switzerland have combined R&D, venture capital, and cutting-edge technology to build more resilient biopharma sectors, a model Ireland must emulate to remain competitive," he said.

The study included a number of recommendations for the Government — including increasing research and development investments through dedicated investment funds as well as building collaborative innovation clusters that integrate industry, academia, and startups.

The study also stressed the importance of fostering indigenous biopharma growth and called on the Government to prioritise investment in advanced therapeutics.