A favorite place for multinational pharmaceutical companies: how is Irelands closed-loop tempered?

category:Finance
 A favorite place for multinational pharmaceutical companies: how is Irelands closed-loop tempered?


Ireland has never been a research and development center in the global pharmaceutical industry chain, but it is a strong link in manufacturing. Ireland is the strongest in process development, not product development. Our pharmaceutical industry has been developing from small molecules to macromolecular biopharmaceuticals, and then preparing for gene therapy in the future. Irish factories have always been very good at commercializing products in the shortest time, which is the biggest advantage of Ireland, Tommy concluded

Ireland is an island country with a population of less than 5 million and a land area of only 70000 square kilometers. At the same time, Ireland is the country with the fastest economic growth in the euro area, with the geographical advantage dividend of relying on the European mainland and facing the North American market. According to the IMF world economic outlook, Irelands GDP growth rate reached 6.8% in 2018.

Irelands economy is highly dependent on foreign direct investment (FDI), deeply embedded in the global value chain. One of the most obvious impacts is the jobs it creates: eight of the 10 new jobs, according to IDA, come from FDI.

Many multinational companies have been in Ireland for decades and have become part of their communities. In 2017, multinational companies directly spent 19.2 billion euros in Ireland, including 11.7 billion euros in wages and 5.7 billion euros in capital investment.

In 1958, the policy changed. Through the first plan of economic expansion, Ireland aims to achieve economic expansion, encourage foreign direct investment and promote export trade. In 1969, IDA became an independent national sponsor. In 1973, Ireland became a member of the European Economic Community, later the European Union. In 1994, according to the governments review, IDA was broken down into three independent agencies and focused on improving and developing high-quality foreign direct investment in Ireland.

From 2015-2019, IDA has set up a global foreign direct investment plan. On the occasion of its 70th anniversary, Heather Humphreys, Minister of Commerce, enterprise and innovation of Ireland, announced that IDA attracted 265 investments in 2018, 171 from North America (+ 7%), 70 from Europe (+ 25%), and 24 from growth markets including China and India (+ 14%). FDI has created 229057 jobs in Ireland, an increase of 19% year-on-year; it is also the main source of Irish tax, accounting for 66% of corporate tax.

This, in turn, was one of the most important reasons why the first multinational pharmaceutical companies chose Ireland.

12.5% corporate income tax is the most attractive condition offered by Ireland as a profitable government. Similarly, the income tax is 17% in Singapore and very competitive in Europe: 19% in the Czech Republic, Poland and the UK, 20% in Finland, Iceland and Russia, 22% in Denmark and Norway, 25% in the Netherlands, Austria and Spain, 30% in Germany and 31% in France. In addition, all eligible R & D expenditures are eligible for a 25% R & D tax credit on a grant basis.

Talent closed loop

Ida promotes foreign direct investment in Ireland through professional consulting and value-added services, while the multinational enterprises that initially entered Ireland due to tax preference also laid the foundation for the development of industrial chains such as biomedicine, financial services and information communication, which IDA focuses on.

But to stay and continue to attract these thousands of miles and miles away funds, it is not enough to rely on tax incentives alone.

Ireland has done a lot to try to provide suitable infrastructure for multinational companies; these companies also need a stable trading environment, especially when there are many uncertainties in the current global environment. Andrew vogelaar, head of IDA growth market (including China), said in an interview with 21st century economic report at the end of October, whats more, we have invested a lot in the education system. Free and open systems and life science courses provide choices for many people who want to enter the pharmaceutical industry, and enterprises also know where to find the corresponding talents.

Ida believes that the education system and the quality of graduates are a major part of Irelands attraction to FDI, and the planned capital budget for higher education in 2018-2027 has almost tripled compared with the past decade. Among the total jobs supported by IDA, pharmaceutical is the largest sector, with 29989 employees in 2018, up 6.6% year on year.

The fundamental driving force behind any innovation process is the human factors related to it. In order to promote biopharmaceutical investment, the Irish government and Ida invested in the establishment of nibrt, a national institution for cultivating biotechnology talents.

Nibrt was founded after 2000 when many large pharmaceutical companies cooperated with IDA and biopharmaceuticals became the mainstream type of enterprises in Ireland. If Ireland wants to have its own pharmaceutical manufacturing industry, it needs to ensure the continuous supply of such talents. Killian ODriscoll, project director of nibrt, said in an interview with 21st century economic report that IDA invested money at the beginning of its establishment, we are an alliance composed of government, industry and universities, which began to be designed and established in 2009 and officially operated in 2011. Now we have found a business model and become a self-sufficient commercial organization.

According to Killian, in 2018, nibrt trained 4300 trainees for 18200 study days and completed more than 100 courses. The most popular is the introduction course of Biopharmaceutics, which is available every month. The background of the trainees includes pharmaceutical, financial and business. Nibrt itself has 70 employees and works with universities. In fact, when 21st century economic journalists visited Ireland last month, they saw that nibrt was located next to the National University of Dublin.

Training costs, i.e. nibrts revenue, are mostly from pharmaceutical companies, Killian said. There are also students who attend training at their own expense, such as those who need to participate in masters programs. About 60% of the courses are customized personalized training for enterprises. We will also carry out some training programs for undergraduates, masters, etc. Generally, the total price of all training courses in a day is 700 euros.

According to data presented by nibrt, there will be 8200 potential job vacancies in the Irish pharmaceutical industry from 2016 to 2020, including biopharmaceutical engineers, scientists, testing and maintenance, and business skills. According to an annual report and survey on biopharmaceutical production capacity and production, the factors that may cause the development of biopharmaceutical industry to be restricted by 2021 are: production capacity restriction (60%), drug review and approval (37.1%), inability to employ experienced new technology and production personnel (30.7%), inability to retain technical personnel (29.3%), inability to employ experienced new R & D personnel (25%), and lack of them Lack of supervisors (10.7%).

We operate globally, with 90% of our international customers, as well as online training courses. Killian introduced a training cooperation project with Guangzhou municipal government. There are also businesses in South Korea, Australia and the United States, training for enterprises of different scales. Next, we will start the project of cell and gene therapy. Training on operability and how to put it into production is still under discussion. It needs a high level, but it is also the future development direction of the industry. It needs people to supervise and highly skilled trainers.

Many pharmaceutical companies mentioned this in the interview. Novartis is one of the first multinational pharmaceutical companies to set up factories in Ireland. At the end of October, the 21st century economic reporter visited Novartis ringaskiddy Limited (NRL), the production base of Novartis in cork, the second largest city in Ireland. It once belonged to Sandoz, the predecessor of Novartis.

We are in a strong group of peers and its easy to share talent. In the past two decades, there have been many pharmaceutical companies growing and developing in Ireland. Many graduates choose such companies and continue to develop their careers. You will find that there are many Irishmen in multinational pharmaceutical companies all over the world, Shane relihan, general manager of Novartis ringaskiddy, said in an interview with 21st century economic report

Another part of the system is the transformation between industry, University and research. Therefore, Tyndall Research Center was established in Ireland in 2004, relying on the University College Cork, aiming to support the industry and academia to push research to the market. During the visit, Carlo Webster, senior director of Tyndalls strategic business development, presented a monitoring instrument used in the biopharmaceutical reaction tank to the 21st century economic reporter, the biopharmaceutical process is very unstable, we hope to bring it to the market, there is no similar product before.

Risk and balance

In the next five-year plan, IDA pointed out that in recent years, rapid changes in all walks of life have made more and more positions require more and more employees comprehensive literacy and professional skills, and the number of low skilled positions is gradually decreasing. This trend is mainly driven by technological change, cost competitiveness and improvement of regulatory level.

Back to the beginning, Irelands investment of 10 billion euros in the past decade is behind the growing demand of the biopharmaceutical market. In 2015, Irelands biopharmaceutical exports amounted to 54 billion euros, making it the seventh largest exporter of medicine and pharmaceutical products in the world.

According to evaluatepharma, from 2010 to 2024, the share of biotechnology in global sales of prescription and over-the-counter drugs will increase from 18% to 32%, and the revenue will increase from $129 billion to $388 billion. Among the top 100 drugs in global sales, by 2024, biological drugs will be tied with small molecule drugs, with revenues of US $178 billion and US $179 billion, accounting for half of the total.

This means that the demand for global biopharmaceutical production capacity is becoming higher and higher. Killian believes that the shortage of biopharmaceutical skills is becoming more and more serious, including the increasing global demand for production capacity, mainly monoclonal antibodies; the emerging demand for manufacturing new therapies (such as cell and gene therapy); the diversification of advanced manufacturing technologies (such as digitization and data analysis) uff09The skills needed for biopharmaceutical production are becoming more and more complex, and talent development requires strong cooperation among industry, academia and government.

According to the CPHI annual industry report 2018, by 2022, the global demand for biopharmaceuticals is expected to exceed 4300kl, with a 5-year growth rate of nearly 14% (2300kl in 2017); by 2022, the distribution of production capacity will shift more to CMO (21%) and hybrid companies (14%), rather than self built factories (65%).

On the other hand, due to the high dependence on FDI, once the global situation is turbulent, Irelands economic system is too large and risky.

We need diversified investment and win more business from Asia Pacific, such as China, Japan, Australia, etc. For this we have set up a new team to take charge of all regions except Europe and the United States. Andrew explained the importance of regional diversification of FDI to Ireland, it is very important to maintain a good development relationship with China and the United States. Despite some uncertainty, Ireland can act as a bridge between the two countries. Just as some American companies will take Ireland as a springboard to enter the Chinese market, some Chinese companies will list in the United States through Ireland and so on.

Another immediate external risk factor comes from brexit, the continuous uncertainty of the global political and economic environment, including the rising protectionist sentiment between brexit and major trading groups, which may affect investment decisions in 2019 and the impact of disruptive technologies. The brexit forecast will have a negative impact on Irelands economy and slow down its economic growth. But in a 21st century economic reporters visit, many people mentioned that this is another development opportunity for Ireland. After brexit, Ireland will become the only country in the European Union that uses English as its mother tongue. IDA believes that many enterprises will relocate to continue serving EU customers, and Ireland will become a hot location. So far, more than 80 projects related to brexit have been approved in Ireland and 5300 jobs have been created. Source: responsible editor of 21st century economic report: Yang Zeyu

Another immediate external risk factor comes from brexit, the continuous uncertainty of the global political and economic environment, including the rising protectionist sentiment between brexit and major trading groups, which may affect investment decisions in 2019 and the impact of disruptive technologies.

The brexit forecast will have a negative impact on Irelands economy and slow down its economic growth. But in a 21st century economic reporters visit, many people mentioned that this is another development opportunity for Ireland. After brexit, Ireland will become the only country in the European Union that uses English as its mother tongue. IDA believes that many enterprises will relocate to continue serving EU customers, and Ireland will become a hot location. So far, more than 80 projects related to brexit have been approved in Ireland and 5300 jobs have been created.