The Pharmaceutical Market: Ireland

With a population of around 4.3 million, the Republic of Ireland represents a small but advanced market for pharmaceuticals. The country has experienced rapid economic growth over the past 20 years, and has invested in large scale renovation and redevelopment of its healthcare infrastructure. This continues today, with an especial emphasis on improving long-term and elderly care facilities, and specific areas such as cancer care.

That said, the country currently faces a severe economic downturn, with GDP expected to fall in real terms by over 2% in 2008 and again in 2009. The government faces an extremely tight financial operating environment in the next few years. It has attempted to ringfence health spending for the foreseeable future, with a small rise in spending planned for 2009. Further deterioriation in public finances may lead to greater pressure on capital budgets in particular.

Most pharmaceutical expenditure is in the public sector, under the Community Drugs Schemes. Most people are covered under one or other of these, subject to a small co-payment. Reimbursement for the over 70s was more or less automatic between 2001 and 2009, but a means test has now been introduced, in attempt to slow consumption.

Use of generics is very low. Unbranded generics are hardly ever used, and there are no particular incentives for boosting generic use. The market retains a large number of patent-expired brand drugs, which compete with branded generics. The prices of these are subject to ongoing cuts, making the market even more unattractive for generic suppliers. There are a handful of small generic companies, but these now tend to be foreign-owned, such as Athlone Laboratories or Pinewood.

Ireland is one of the global pharmaceutical industry's leading manufacturing bases. Most large companies have production facilities there. Drugs are either produced in finished form for export, or exported on to other facilities for finishing. A few companies have reduced or stopped their Irish operations in recent years, but this is currently more than balanced by new investment, particularly in the biologic field.

While the multinational presence is very strong, Ireland has very few domestic producers. The only major Irish company is Elan, but this does much of its work in the USA. Ireland has developed a highly skilled support industry, however, in the wake of the multinationals.

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