Patent end to Lipitor led to 9.1pc decline in exports
Published 16/02/2012 | 05:00
Strength of drugs industry will turn into a weakness, say experts
THE end of cholesterol-fighting drug Lipitor's patent has sent the country's export figures into a tailspin and triggered a slump in the December trade surplus.
The Central Statistics Office said yesterday that a substantial part of a 9.1pc decline in exports seen in December was related to a "high-value product coming off patent" but declined to name the drug or say how much of the overall decline was due to this single medicine.
Lipitor, which is made in Little Island in Cork, went off-patent in December -- forcing drug-maker Pfizer to launch an all-out price war against cheaper generic rivals.
Many experts fear that the strength of our drugs industry may turn into a weakness over the next two years, pushing down exports and economic growth. Five of the world's top-selling dozen medicines are produced in Ireland and Bloomberg calculated last year that their sales would fall 52pc from $27bn (€20bn) in 2010 to $13bn by 2013, as patents expire.
Lipitor had $10.7bn of sales in 2010. Irish-made schizophrenia drug Zyprexa, which also came off patent last year, had sales of €5bn or 22pc of Eli Lilly's full-year sales. Merck's Singulair asthma treatment, due to come off patent this year, has sales of around $5bn.
Chris Van Egeraat, a lecturer in economic geography at NUI Maynooth, estimates about €19bn worth of Irish exports may be at risk as drugs like these fall off patent.
The dramatic swing seen in December's trade figures highlights once again how the Irish economy is vulnerable to outside forces. The economic adviser to the Irish Exporters Association (IEA) warned yesterday that the economic outlook had worsened significantly and predicted the economy won't expand at all this year.
IEA adviser Philip Halpin told the 'Wall Street Journal' that slowdowns in demand for goods made by export-focused industries would harm Ireland's economic recovery.
The poor export performance in December helped push down the trade surplus for the month by 23pc from November and overshadowed a good year for Irish exporters with a record trade surplus of €44,550m.
Conall Mac Coille, chief economist at Davy, said that there "was still no clear evidence of a material slowdown in Irish exports" and added there was little tangible evidence the contraction in euro area GDP in the fourth quarter was harming demand for Irish exports.
Alan McQuaid of Bloxham Stockbrokers warned, however, that overall export growth in 2012 was "set to be weaker than in 2011" and that would "impact negatively on Irish GDP growth". Merchandise volumes for October-November suggested demand was waning.