Ireland must 'tweak' tax system to lure pharma firms here
Warning from industry expert comes amid slump in exports
IRELAND needs to make its business environment even more attractive to pharmaceutical firms if it's to continue luring investment, according to an industry tax expert.
The warning came a day after new trade figures showed that exports slumped in January thanks to a fall in pharmaceutical exports.
Aidan Meagher, head of tax for life sciences at Ernst & Young in Ireland, was speaking to the Irish Independent as the bosses of Irish arms of international drug companies attended a conference in Dublin.
He said that while Ireland remained an attractive investment proposition for international drug companies, the Government probably needed to "tweak" a number of tax elements in order to ensure that continued.
Further changes to research and development breaks, making Ireland a better proposition for foreign executives who have to be based here, and improving the patent regime in Ireland could all cement Ireland's attractiveness, argued Mr Meagher.
He said that while Ireland was still very attractive for drug companies, the UK had similar benefits.
But Neil Byrne, Ernst & Young's global head of life science, ruled out the notion that drug companies might up sticks and migrate to lower-cost destinations such as China and India.
"The emphasis on product quality is just so important," he said. "It's one of the most over-riding factors." He said pharmaceutical firms "never play around" with product quality.
The pair also downplayed fears that a tougher line being talked about by US President Barack Obama on how US multinationals manage their tax affairs using offshore jurisdictions might impede fresh investment in countries such as Ireland.
Mr Meagher said there had been no further movement on those political challenges and that they could now be on the back burner for some time.
He said that mid-sized pharma firms could be among the new investors here as larger firms shift their focus away from developing blockbuster drugs. Ireland's pharmaceutical exports have come under pressure as major drugs manufactured here begin to come off patent.