Author: Matt Moran, director, PharmaChemical Ireland  The recent announcements by MSD Swords and Pfizer Newbridge to lay off close to 800 workers have prompted much comment. Some commentators have suggested that this prefaces a wave of job lay offs followed by a major contraction of the sector in Ireland – a sector that is crucial to the Irish economy accounting for over 50 per cent of all goods exported from this island. This equates to some €55 billion in 2012. The industry also employs around 50,000 people directly and indirectly. The reality is, in fact, quite different. What is happening in Ireland is that the industry is evolving and transforming. A quick glance at the number of capital investments ongoing at present (see Table 1, bottom) supports this. The Irish industry is simply responding to the global challenges facing the sector everywhere. These challenges were clearly seen and recognised by the membership of PharmaChemical Ireland a number of years ago. Global blockbusters – many of which are manufactured in Ireland – nearing the end of their patent life, diminishing research and development (R&D) pipelines and continual pressure on healthcare costs and the price of medicines have all combined to produce a very difficult operating environment for the industry. PharmaChemical Ireland launched the first of a series of three Strategy Documents in 2010 at the Drug, Chemical & Associated Technologies Association meeting in New York city, outlining the industry’s response to these challenges. Primarily, the Irish industry will invest in more development activities and in biotechnology-based development and manufacture. The figure below traces the lifecycle of a drug from discovery through to the market. Traditionally, the industry here has occupied the right hand side of this diagram. The strategy now is to move incrementally towards the left of this, to pursue a ‘development-plus-manufacturing’ strategy, or D+M. This will allow for co-location of development and manufacturing, facilitating a seamless flow from the laboratory or clinic through scale up and to launch. Ireland is well placed to exploit such a model and, in many ways, this is the only model by which biotech manufacture can be truly successful, given the complexity of biotech manufacture. PHARMA INVESTMENTS [caption id="attachment_10341" align="alignright" width="607"] Fig 1: Industry challenges (click to enlarge)[/caption] Hence, the majority of the new investments that we are seeing are in this space. A good example would be the €100 million R&D Commercialisation Centre developed by MSD at its Ballydine Chemical Synthesis Facility in Co Tipperary. This centre will cover drug product as well as chemical synthesis. There is activity including products in all three phases of process development, clinical supply and process performance qualification (PPQ) for early product launch. This will enable this site to become one of MSD’s strategic sites. Eli Lilly is currently constructing its second large molecule or biotech facility at is campus in Kinsale, Co Cork. This will be co-located with its existing small molecule or chemical synthesis plant and its first large molecule plant. Eli Lilly also plans to make Kinsale a strategic location for the commercialisation and scale up of Lilly’s small molecule and biopharmaceutical pipeline of medicines. Allergan is constructing a new biologics facility in Westport, Co Mayo; the investment of €350 million will create 200 new positions. Allergan has embraced the D+M model in Westport and this has led to the creation of a dedicated technical operations function at that site. It will focus on development from the process product and analytical perspective. Genzyme, which is now part of the Sanofi Group, recently invested €150 million at its Waterford-based biotechnology plant. This site produces 90 per cent of all Genzyme products. The company built a development facility in 2003 and estimates that 50 per cent of the products developed there have made it through to commercialisation. Pfizer remains heavily committed to Ireland and currently employs more than 3,200 people in Ireland. The company recently announced investments in the Grange Castle (Dublin 24) and Ringaskiddy (Co Cork) sites of $130 million, bringing recent investments to $330 million. These investments are to expand manufacturing capacity and develop specialised new capability to manufacture some of Pfizer’s newest medicines in cancer and other future pipeline medicines. An additional stage of vaccine manufacture recently moved to the Grange Castle site and four of Pfizer’s newest medicines in cancer, women’s health and rheumatoid arthritis are being manufactured for global export from Ireland. CONCLUSION [caption id="attachment_10350" align="alignright" width="816"] Fig 2: Achieving success in drug delivery, development and manufacturing (click to enlarge)[/caption]

There can be no doubt that the pharmaceutical industry here and globally faces significant challenges. These challenges are exacerbated by the high level of mergers and acquisition activity in the sector, which is generating over-capacity in the sector.

If the industry in Ireland is to survive and prosper, it needs to remain strategically relevant – this means investment in development and new technologies such as biotechnology. In the view of PharmaChemical Ireland, this is happening as evidenced by the investments discussed. The industry has projected a clear strategic vision internationally, which these investments underpin. There will be changes in the sector but, in the long run, the future remains bright for the sector here and for Ireland. Table 1: Some investments in the industry 2011-2013

	Euro millions	Employment
Allergan - Biotech Manufacturing and Development	350	200
MSD Ballydine - R&D	100	100
Abbott Sligo - R&D	85	175
Pfizer Biotech - Development and Manufacturing/Pfizer Ringaskiddy - Chemical Synthesis	275
Genzyme - Biotech Manufacturing	200
Eli Lilly - Biotech Manufacturing	330	200
Amgen - Biotech Manufacturing	150	100
Mylan	75	500
MSD Brinny	29	70
MSD Carlow - Vaccines	200	150
Total	1719	1495