Friday 20 April 2018

Revenue for State will be hit by end of drug patents

Five key treatments made here are set to lose their exclusivity

EXPORTS are likely to fall and government revenue is set to shrink as patents expire for medicines produced in Ireland by foreign-owned pharmaceutical companies, a report said yesterday.

Sales of five blockbuster drugs made here will fall from $27bn (€20bn) last year to $13bn by 2013 as their patents expire, according to calculations by Bloomberg that are based on analysts' estimates.

The first of the five drugs to lose a patent later this month will be Pfizer's cholesterol treatment Lipitor.

"From the moment they come off patent, it will be immediately reflected in export figures," Bloomberg quoted NUI Maynooth expert Chris Van Egeraat as saying.

He estimates that about €19bn worth of Irish exports may be at risk as blockbuster medicines fall off patent.

The Government has pinned its hopes on an export-led recovery but this could be hindered by a collapse in sales. The decline could also hit the Exchequer.

Pharma companies paid more than €1bn in corporation tax last year or about a quarter of all the corporation taxes paid by Irish-based companies, according to the lobby group PharmaChemical Ireland.

Ireland is the world's largest exporter of pharmaceuticals and eight of the 10 biggest drug companies in the world have Irish facilities, which produce everything from Viagra to Botox.

The country exported €49bn of organic chemicals and pharmaceutical products in 2010, accounting for 55pc of merchandise exports. In the first half of 2011, this grew to 58pc, according to the CSO.

Lipitor, which had $10.7bn of sales in 2010 and is produced in Cork, comes off patent this year, as does Eli Lilly's schizophrenia drug Zyprexa, followed by Merck's Singulair asthma treatment in 2012.

Pfizer is trying to sell a site in Loughbeg, Cork, which is dedicated to producing Lipitor. The company said it had planned for Lipitor's loss of patent and would continue to manufacture the drug's active ingredient in this country.


A spokeswoman for Pfizer, said: "Ireland remains a key strategic location for Pfizer."

Undoubtedly, Ireland retains some big draws for drugs companies. Labour costs will fall 14pc relative to the EU average in the period 2008 to 2012, says the European Commission.

Chris Van Egeraat, a lecturer in economic geography at NUI Maynooth, believes that the manufacture of patented drugs will be taken over by specialised generics companies, many of them located in India. He said it "makes for stark reading".

"Will the pharma companies keep producing the drugs in Ireland as they come off patent?" asked Matt Moran, director of PharmaChemical Ireland. "This is the big issue."

Irish Independent

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