Jim Power: How Big Pharma delivered a shot in the arm for Ireland's economy

New book traces the impact pharmaceutical manufacturing has had here

Sun, 13 Jun, 2021 - 12:51

Big Pharma is a term used in recent decades by a wide range of people to describe the growth of a huge global industry. It has also been used as a derogatory term by conspiracy theorists who oppose vaccines, though I am sure they will not have had their minds changed by the pharmaceutical companies that have come to fight the global Covid health crisis by delivering vaccines.

This time last year as the pandemic was steadily choking off the global economy and global society, few believed it would be possible to deliver vaccines for at least a couple of years. However, by the end of 2020 vaccines were produced that promise to get economies back on track.

One of the fears is that viral variants could threaten the return to normality though rational people hope that the vaccines can be developed further to deal with variants.

However, the industry has also made a dramatic contribution to addressing many horrible diseases over the years. Indeed, the FDA approval in the US in recent days for a drug called Aducanumab developed by Biogen has given hope to the families and loved ones afflicted by Alzheimer’s.

Significant player

The pharma industry is a very significant player in the Irish economy over the past 50 years or more. In 2020, Ireland exported €106bn in chemicals and related products, or 66% of all merchandise exports, including exports of medical and pharmaceutical products of €62bn.

In 2020, the IDA supported companies in the pharmaceutical and food sector employed 34,187 people, with many of these pharma jobs boosting the economy of Cork.

Given the significance of the sector to Ireland, a new book, A History of the Irish Pharmaceutical Industry by Pat McCarthy, is timely. In his book, Mr McCarthy, a chemist and historian and who had a long career in pharmaceutical manufacturing uses many interesting anecdotes to trace its history.

I particularly like the reference to Robert Boyle, who is best remembered for Boyle’s Law and a native of Waterford, and his fondness for powdered earthworms as a cure for ailments such as convulsions and piles.

This history begins with medieval history, which he describes as the age of the apothecary, a person that prepared and sold medicines and drugs.

Then through to 1962, the industry faced protectionist economic policies amid a fear that attracting direct foreign investment would put ownership in non-native hands, a potentially bitter pill after the long struggle for independence. During the 1950s, there is the growing realisation that industrial policy in Ireland had to change.

For the pharma sector, the picture was not that promising. But then three companies gave a hint of an alternative future: Antigen, Rowa, and LEO Laboratories. Thankfully, the alternative future was realised.

In the 1960s, the First Programme for Economic Development under the leadership of Seán Lemass started to take effect and the seeding of the idea for Ireland’s low corporation tax regime - which is of course a current topic of intense controversy and bitter international resentment.

Then in the 1970s, the IDA very successfully focused on attracting sub-sectors that have huge growth potential. The pharma sector got top billing that helped put Ireland on the global map.

The author does not shirk away from the less glamorous stories about pharma, including the legal clash between farmer Mary Hanrahan and Merck, Sharp and Dohme in 1988.

Leprechaun economics

Readers will also be very interested in the challenges ahead for pharma in Ireland, including mergers, patent cliffs, inversions, 'leprechaun economics', corporation tax changes, and the need for skills.

Nonetheless, the author is optimistic for Ireland to "opportunistically grab the future" in pharmaceutical manufacturing. The book is interspersed with social history, economic history, real economics, medicines and health, and of course politics.

The industry has survived and prospered through numerous economic cycles, and is now deeply embedded in the Irish economy and society. The recent announcement that Pfizer would start manufacturing its Covid vaccine in Ireland is a further indication of its status.