UP THE LADDER
"An important aspect in the development of the sector—which has helped to significantly boost its contribution to the Irish
economy—has been the success of the industry in diversifying the nature of its investment in Ireland, from the original bulk
active plants to higher-value activities." – Richard Bruton, Minister for Jobs, Enterprise, and Innovation
Edward Canary, General Manager, Lilly Kinsale Site
Lilly set up in Ireland three decades ago by purchasing a farm. In its early days, the operation produced intermediaries for
small-molecule drugs. Nearby, Pfizer was manufacturing citric acid for soft drinks. The country was a fledgling industrial
economy that was still mostly reliant on sectors like agriculture and fishing.
No more. Thanks to a strategic revamping of its educational system and the development of a highly attractive package of business
incentives, Ireland has diversified its investment base and continually moved up the value chain. The pharma sector advanced
from bulk manufacture of chemicals and intermediates to formulation and finished products. In the early 2000s, in addition
to small molecules, Ireland became a key location for complex biopharmaceutical production. Pfizer's biotech site at Grange
Castle in Dublin, inherited from Wyeth, was the largest in the world when it went into operation in 2005.
Cut costs, or add value?
Pfizer VP of External Supply Paul Duffy summarizes a story that is emblematic of the market at large: "In Ireland, we have
moved from making sweetener for soft drinks, to manufacturing some of the most innovative medicines Pfizer distributes around
And today, as reported by Matt Moran, director of local industry association Pharmachemical Ireland (PCI), "the aim is to
move the sector from manufacturing, to 'manufacturing plus.'" What is manufacturing plus? Moran explains, "Not very much basic
research is done in Ireland. However, the industry is now investing in product and process development—in other words, competencies
that are close to manufacturing. This makes sense, given the size of the production base here."
Joe Costello TD, Minister for Trade & Development
Ireland is today a place to not only manufacture, but also to address challenges like manufacturability. At Lilly's operation in Kinsale, Cork, General Manager Edward Canary reports, "As the site's mission has evolved, the complexity
associated with our operation has increased. Through ongoing investment in our people and facilities, we have become a center
of excellence for chemical synthesis and the commercialization of new molecules. Several new medicines are currently undergoing
development work in Kinsale, and new manufacturing technologies such as process analytics and continuous processing are being
deployed at the site in collaboration with our colleagues in drug development. We now have the opportunity to advance our
late stage pipeline, while continuing to leverage our long history of performance in the supply side of the business."
Indeed, in a rapidly evolving environment, many stakeholders have said that if Ireland did not itself continue to evolve,
the industry would look elsewhere—and in the words of Deloitte Ireland Managing Partner Brandon Jennings, it would look elsewhere
Frank Ryan, CEO, Enterprise Ireland
But what of cost—one of the greatest drivers of change for the pharma business today? Great science alone may not hold the
industry's attention. As Bristol Myers Squibb's VP of external manufacturing John Nason says, "To be very clear, we operate
in a cold business environment. You either make a profit, or you fail—it's that simple. We are up against Switzerland, and
we are up against Singapore and the Far East. China has invested billions to attract the industry."
Ireland has an answer: leading in the implementation of manufacturing excellence and continuous improvement. Rottapharm's
managing director for its Dublin site, Patrick Garrahy—whose team recently won multiple awards for continuous improvement
from the World Trade Group—believes that the country "can mitigate whatever cost differentiators may exist between ourselves
and the low-cost producers by evolving into world-class manufacturing operations. The efficiencies we gain from these efforts
allow us to continue to compete."
White elephant syndrome
In fact, Rottapharm's neighbor in Clonmel, Pinewood Healthcare—the Irish affiliate of Indian giant Wockhardt—reports manufacturing
on a cost-competitive basis with one of Wockhardt's plants in low-cost India. All across Ireland, production and development
sites are applying technology and innovative ideas borrowed from industries as varied as aerospace and fast-moving consumer
goods (FMCG) to realize some of the most efficient pharma operations in the world.
The result, as Pfizer's Duffy points out, is this: "Globally, the pharmaceutical industry has seen a significant reduction
in capital investiture in the past few years. And yet, when we have chosen to invest, we often chose to invest in Ireland."
From local supplier to global partner