Ireland’s biopharmaceutical and chemical sector has a remarkable track record and has been a significant contributor to the economy. But a rapidly shifting global trade landscape and intensifying international competition present real threats to Ireland’s position as a global leader. A relentless focus on competitiveness at home and within the EU is now non-negotiable.
Let’s start with the positives. At EU level, the recently launched EU competitiveness compass, introduced in response to the Draghi report, recognises the need to simplify and reduce regulatory burdens. Domestically, the programme for government includes a much-needed action plan for competitiveness and productivity, along with a commitment to develop a life sciences strategy – acknowledging that Ireland must enhance its offerings.
The sector in Ireland remains optimistic about its future. The recent manufacturing report from Ibec’s BioPharmaChem Ireland (BPCI) shows that 80 per cent of leaders in the sector feel good or very good about their future operations here.
It is also important to remember that this sector operates on much longer investment cycles due to the scale of infrastructure investment and the time required for product approval and to bring products to market.
A track record of past success matters – but so does a clear roadmap for future growth.
Ireland’s success in attracting biopharma investment dates back to the 1960s. Decades of strategic policymaking, a skilled workforce and a pro-business environment have made the State a hub for leading pharmaceutical and biopharmaceutical companies. Today, the sector directly and indirectly employs nearly 80,000 people across 90 sites nationwide.
But global trade tensions, evolving regulatory frameworks and domestic infrastructural challenges are testing Ireland’s ability to remain competitive.
Internationally, competition for investment has never been more fierce. Countries across Europe, Asia and North America are offering attractive incentives to lure manufacturing and research facilities – spurred on by the vulnerabilities to the international supply chains of critical medicines that were exposed by Covid-19.
While international pressures mount, domestic obstacles also threaten the sector’s continued success. That BPCI report identifies several key challenges facing the sector. Chief among them is talent attraction and retention – which is cited as a major issue by 80 per cent of industry leaders. The high cost of labour, housing shortages and escalating energy prices further complicate the situation.
Additionally, infrastructure constraints – including deficiencies in water, waste water and energy grids – pose significant risks. These can directly impact Ireland’s ability to attract new investment and retain existing players. The Government must prioritise infrastructure investment to ensure the biopharma sector remains a viable and attractive industry for continued growth.
Our public sector investment in research, development and innovation remains significantly behind that of our European and OECD counterparts. Without a strong pipeline of talent and a thriving research ecosystem, Ireland’s ability to move up the value chain towards clinical manufacturing, biotech innovation and indeed early-stage drug development will be stunted.
The Expert Group on Future Skills Needs estimates that the sector could add 21,000 jobs by 2027. However, without targeted Government intervention, there will be a shortfall of more than 3,000 skilled graduates per year.
Industry is contributing to closing the €307 million funding gap in higher education through significant investment from the National Training Fund. We need a clear implementation plan to leverage industry investment for a shared vision of transformation and innovation in higher education, with Government commitment to closing the remaining funding shortfall.
Upcoming EU legislation, including general pharmaceutical legislation, the Critical Medicines Act and the Biotech Act, will have significant implications for the sector. Ireland must adopt a balanced approach at EU level to ensure that new regulations support innovation rather than stifle it.
Similarly, environmental regulations must be carefully calibrated. Sustainability is a pressing concern, and the industry is committed to achieving ambitious environmental goals. However, excessive regulatory burdens could hinder competitiveness.
Government collaboration across departments is crucial to crafting policies that drive sustainability, deliver sector competitiveness and ensure medicines remain on the market. Ireland needs to advocate for EU environmental regulations that avoid disproportionately negative impacts on biopharma operations.
The Action Plan for Competitiveness and Productivity is a positive step. However, concrete actions must follow these commitments. The Government must prioritise collaboration with industry stakeholders to address infrastructure challenges, enhance research funding and create a regulatory environment that fosters innovation – and BPCI looks forward to engaging on these issues.
Likewise, the life sciences strategy is long overdue and must be a top priority for the new Minister for Enterprise, Tourism and Employment. We have the potential to further strengthen our ecosystem beyond manufacturing – including expanding global business service operations and growing indigenous businesses. The strategy should outline clear measures to enhance competitiveness, ensure talent availability and support research and innovation, as well as market access
Ireland’s pharma and chemical industries have been an understated success story for decades, but continued prosperity is far from guaranteed.
Despite the challenges, the path forward is clear: the new Government has an opportunity to reinforce Ireland’s position as a global leader in the sector through a relentless, whole-of-Government approach to competitiveness – both at home and at the EU level.
We have the track record, the knowledge and the expertise. Now all we need is a joined-up plan for the future.
Sinead Keogh is director of BioPharmaChem Ireland, the trade association within Ibec that represents the biopharma and chemical sectors
