Irish drug exports at risk as patents expire

SOME €19 billion of Irish pharmaceutical exports may be impacted by the expiration of patents on a number of blockbuster medicines produced here.

Dr Chris van Egeraat, a lecturer in economic geography at NUI, Maynooth, said that based on global corporate information from Datamonitor, this patent cliff could effect as much as €18.6bn of Ireland’s pharmaceutical exports.

However, Dr van Egeraat pointed out that this will be offset by a number of other factors.

“This does not mean that our exports will fall by that amount, of course. New products will come on stream. In addition, not all this material will move out of the country. Some of this material will be produced by generics producers in other countries such as India.

“It is possible that big pharma companies will continue to produce this material from Ireland, but the export value of these products would be significantly reduced due to competition from generics companies.

“Or maybe Indian generics companies will invest in Ireland to produce this material here. We will undoubtedly see some of this.”

Of the top 10 drugs coming off patent between 2010 and 2014, seven are produced here: Plavix (BMS), Lipitor, Protonix, Enbrel (Pfizer), Actos (Takeda), Singulair (Merck) and Zyprexa (Eli Lilly).

Lipitor is produced in Little Island, Co Cork, and comes off patent this year, as does Zyprexa, a schizophrenia treatment.

Last year, Ireland exported approximately €49bn in pharmaceutical products, representing 55% of merchandise exports from the country. In the first half of 2011, this figure grew to 58%.

Dr van Egeraat said the IDA were aware of the impact the patent cliff could have on exports. “The IDA have been repositioning us for a long time in this area and have put a large emphasis on attracting bio-pharmaceutical companies into Ireland. They have done this very successfully, it must be said.”

However, he suggested that with lower wage costs in some Asian countries and an improving commitment to regulations, big pharmaceutical firms could start to move to these regions.

“Pharmaceutical companies have to comply with stringent regulatory procedures and the FDA needs to trust that countries and companies can comply with these regulations.

“Until now companies in India and China have an issue here and they are therefore investing in Ireland. But this is changing quickly and some big pharma companies are experimenting with investments in India and China,” he said.

A spokesperson for the Department of Jobs, Enterprise and Innovation said the “loss of exclusivity is a natural if challenging part of the pharmaceutical business model”.

However, she said there are already “efficient and competitive generic manufacturing companies already operating successfully from Ireland” and that “the market is dynamic and appears to be growing”.