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Pharma Tech Outlook | Wednesday, November 09, 2022
Ireland–as an example of where a combination of tax rates, labour skills, regulation and quality infrastructure–has encouraged the development of pharma clusters.
FREMONT, CA: In a situation where the European Union is lagging behind both the United States and Asia in terms of medication research and development activities, Ireland cannot be complacent about future pharmaceutical investment, according to a report from the industry.
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In 2001, the US spent about two bn dollars more on research & development than Europe, but by 2020, the difference had grown to about 25 bn dollars. The European Union, Great Britain, and Switzerland are referred to as Europe in the research by Charles River Associates for the drug industry lobby, the European Federation of Pharmaceutical Industries and Associations.
Europe only accounted for 31 per cent of R&D investments in 2020, down from 41 per cent in 2001. And it is noteworthy, according to the authors, that non-European corporations choose greenfield regional research centres in Europe that are largely focused on markets like Switzerland and the UK.
The report also highlights that Europe is lagging in clinical trial activity, notably for next-generation cell and gene therapies. The EU prioritises investing in innovative regions rather than attempting to distribute funds equally among member states, focusing on cell and gene therapies and quicker patient access.
Ireland's industry lobby, the Irish Pharmaceutical Healthcare Association (IPHA), cautioned the State not to become complacent about Ireland's prospects for luring future investments because significant global competitive pressure makes the outlook uncertain.
The chief executive of Ipha and a member of the steering group for the Charles River study said that Ireland has significant challenges to overcome, especially in giving patients faster access to new medicines and attracting the next wave of investments in areas like advanced therapeutic medicinal products which include cell and gene therapies.
The report does use Ireland as an example of a country where the right mix of tax rates, labour skill, regulation, and high-quality infrastructure has aided in the growth of pharma company clusters. Despite being one of the smallest countries in the EU in terms of land area, the report notes that Ireland is home to 90 pharmaceutical and biopharmaceutical manufacturing facilities, including operations from all ten of the world's largest pharmaceutical corporations. This is explained by the consistently low corporate tax rate, the low cost of labour, and the highly skilled workforce.
A cluster's advantages are the existing stock of skilled employees and the established infrastructure, such as the availability of manufacturing support service firms, which become self-justifying. Additionally, it discovers that businesses are more inclined to increase production at locations that are part of a cluster.
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