International expansion strategy trends
In previous articles on our blog we have showcased pharmaceutical companies that have an international expansion strategy in Ireland.
Merck, Beckman Coulter, Janssen Sciences and the Wasdell Group have all recently announced investments to their Irish operations.
We thought we’d take an opportunity to examine a little further, why pharmaceutical companies have set-up and flourished in the Irish economy.
The pharmaceutical industry in Ireland – an overview
In a global context, Ireland is a major player in the pharmaceutical industry. The sector has grown so much here that companies like the Wasdell Group have set up in Ireland because their customers and potential customers are all based here.
Here are some of the headline facts about the pharmaceutical industry in Ireland:
- 90 pharmaceutical plants operate in Ireland
- Of which 40 are FDA approved
- All of the top 10 world's largest pharmaceutical companies have operations here
- Ireland is the 7th largest exporter of medicinal and pharmaceutical products in the world
- Ireland exported €54bn of pharma, bio and chemistry produce in 2016
Ireland has 2 major advantages for attracting companies with an international expansion strategy to set up on our shores.
Ireland has a lot of attractive features for companies looking to do business here.
Ireland’s economic growth has been the fastest in Europe for the last four years and the outlook is still robust. Our corporation tax rate of 12.5% is very attractive. While not the lowest rate available in the world, it doesn’t need to be.
When you couple the above with other fiscal factors such as a 25% tax credit for Research and Development, an excellent intellectual property (IP) regime, an attractive holding company regime and an effective zero tax rate for foreign dividends, investing in Ireland begins to look very attractive indeed.
2. Openness and willingness to do business
In a previous blog post we mentioned that since 2009 Ireland has ranked in the top 2 nations for globalisation according to the KOF Index of Globalisation. This is your classic overnight success story that has been almost 70 years in the making.
The Industrial Development Authority (IDA) was founded in 1949 with the vision of attracting foreign direct investment from large overseas companies.
While the government has provided the fiscal infrastructure to allow Ireland to compete for international companies’ attentions, the IDA has acted as a concierge for the country.
This is the role Smart MBS plays for our clients. We offer a turnkey solution for companies of all sizes that includes office space, company secretarial, accounting, payroll, HR and marketing.
Why Ireland for pharmaceutical companies?
We believe there are three main driving forces behind the success of the pharmaceutical industry in Ireland.
As the foreign multinational companies began to gradually land on Irish shores in the 1950s and 1960s the Irish government set about reforming the education systems to ensure we met the needs of these new employers.
In the 1960s the Regional Technical College (RTC) system was created as technical education was an area that was under served until the advent of these colleges.
The RTC system was then supplemented by two National Institutes for Higher Education. These institutes provided technical education at university level.
As a result, every year Ireland produces a high volume of highly skilled graduates. We have a 98% participation rate in the education system in this country, which ranks 6th best in the world.
The educational landscape is constantly evolving too.
Ireland’s universities have strong cooperative links with the pharmaceutical sector and in some cases directly with the companies themselves.
One example of this is German company, Allergan, who first set up in Ireland in 1977 in Westport, Co. Mayo employing 25 people. They added a second facility in 1992 at Clonshaugh in North Dublin and then an international supply chain office in Earlsfort Terrace, Dublin in the 1990’s.
Allergan now employs over 1,700 people in Ireland with 1,100 of them based in Westport.
Allergan were one of the early arrivals from the global pharmaceutical sector to Ireland and believe the key to their success in Ireland is their highly talented team operating at state-of-the-art manufacturing facilities producing pharmaceutical products for the global market.
In 2017 to mark 40 years in Ireland, Allergan invested a further €42 million into their Irish operations and created an annual €50,000 Innovation Award Programme. The Allergan Innovation Award Programme will partner with six colleges around Ireland (Trinity College Dublin, UCD, NUI Galway, IT Sligo, DCU and Galway-Mayo IT) to recognise and support scholars who have excelled through innovative research in the field of Life Sciences.
Ireland has a significant track record in clinical and academic research too. The National Institute for Bioprocess Research and Training (NIBRT), created from a €60million investment by the IDA, gave practical training to 2,000 people in 2013.
There is also a strong national research ecosystem across 34 centres in Ireland’s third level colleges.
Fourteen areas have been identified as priorities and have been clustered in 6 themes: ICT, Health and Medical Technologies, Sustainable Food, Energy, Manufacturing and Materials, and Innovation in Services and Business Processes.
These clusters have become a hotbed of research excellence based on practitioner-to-practitioner knowledge sharing.
The Science Foundation Ireland (SFI) has also received additional funding. This has allowed them to increase the number of research centres under their remit to 17 up from 12 at the beginning of 2017.
Ireland’s standing in Global Research Ireland achieved a world ranking of 10th for the overall quality of its scientific research for the first time in 2016. Ireland also ranks highly in specific fields such as:
- 2nd for Immunology
- 3rd for Materials Science
- 5th for Chemistry
- 6th for Basic Medical Research
Ireland has one of the youngest and most highly educated populations in Europe. This provides a rich and strong pool of talent for the sector, which continues to benefit from high levels of investment in third-level education and the growth of collaborative clusters.
3. Regulation & Standards
As Ireland’s standing in the global pharmaceutical sector grew so has the acknowledgement of the excellent compliance record with regulatory agencies (including IMB, FDA and EMA) the country has.
Like the close-knit networks companies have created with educators, regulators work closely with companies to strive towards a trouble-free compliance environment.
To ensure ease of export, the agencies in Ireland operate in accordance with European and global standard procedures.
The Health Product Regulatory Authority (HPRA) has recently established Regulatory Science Ireland to explore opportunities for investment in research to increase understanding around processes and procedures. This should further support Ireland’s reputation for regulatory excellence in pharmaceutical manufacturing.
Are you a pharmaceutical company on the rise?
If your company is involved in the pharmaceutical sector and would like to explore the idea of expanding into Ireland, please get in touch with us directly. You’ll find all our information here. Why not request a call with one of our consultants?
You can also find out more about Ireland as a location and Smart MBS as a company in our eBook, available to download below.
As you’ve seen in this article, the Irish economy is open and willing to do business.
Our goal at Smart MBS is to make international expansion accessible to companies of all sizes.