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Ireland has long held a strategic position as a pharmaceutical powerhouse in both Europe and the rest of the world, hosting manufacturing operations from nearly all the top global pharmaceutical companies. However, recent discussions around tariffs have cast a shadow over the security and future of Ireland’s pharma centre.
Despite the uncertainty and fearmongering by the current administration, Ireland remains a robust and resilient hub for pharmaceutical manufacturing, and several key factors continue to protect its industry from sudden shifts.
Potential Tariffs
The potential imposition of tariffs may pose a threat to pharmaceutical trade. However, Pharmaceuticals are currently exempt from tariffs due to the World Trade Organisation’s 1994 Agreement on Trade in Pharmaceuticals. While the current administration has mentioned Tariffs on Pharmaceuticals, it has not yet acted on these.
While the current administration thinks that pharmaceutical companies can just relocate manufacturing to the US, in reality, there are many nuances associated with the industry that make it far more complicated. I have detailed 3 of the main reasons below:
1. The High Cost and Complexity of Relocation
Relocating pharmaceutical operations from Ireland to the US is not straightforward, nor is it an economically viable solution for companies. Pharmaceutical manufacturing facilities require years of planning, regulatory approvals, and specialised infrastructure before getting to commercial manufacturing and batch release. According to PhRMA, setting up a manufacturing facility can cost up to $2 billion and take 5 to 10 years before it is operational.
As mentioned above, this is due to all the complexities associated with building a new facility: site procurement, planning, design, and engineering, physical construction, procurement and installation of state-of-the-art equipment and technology, qualification and validation (IQ, OQ, PQ’s), sourcing talent for the necessary positions, pilot production, full-scale manufacturing, and regulatory approvals for commercial manufacturing.
On the other hand, Ireland offers an already established ecosystem with strong regulatory alignment with both the EU and US FDA standards.
2. Talent Shortage in the US
A major barrier to relocation is the lack of skilled talent in the US, particularly in areas where new facilities would potentially be built. Ireland, in contrast, has cultivated a highly skilled workforce in the pharmaceutical and biopharmaceutical industries by strategically investing in STEM (Science, Technology, Engineering, and Mathematics) education and third-level programmes over the last several decades.
By recognising the growing global demand for life sciences expertise, Irish universities and institutes of technology have developed specialised degrees, diplomas, and industry-aligned training courses in biotechnology, pharmaceutical sciences, and chemical engineering. These programmes are often designed in close collaboration with industry leaders, ensuring that graduates have access to strategic onsite placements to get industry experience, allowing them to possess the practical, regulatory, and technical skills needed to thrive in modern pharma environments.
This educational foundation has positioned Ireland as a top destination for pharma investment, with a talent pool that will take the US potentially decades to replicate.
3. Intellectual Property
When a pharmaceutical company invents a new drug, it files for a patent, which gives it the exclusive right to make, use, and sell that drug for 20 years (from the date of filing). This prevents competitors from legally manufacturing or selling the same product during that period.
In addition to patents, many regions (including the EU and U.S.) grant regulatory data exclusivity, meaning that the safety and efficacy data submitted during drug approval can’t be used by generic manufacturers for a certain period of time. Even if a U.S.-based manufacturer can technically produce the drug, they legally can’t if the product is under patent or data exclusivity protections. Doing so would violate intellectual property law, triggering lawsuits or major fines.
Speaking on Tax Talk Podcast: Karen Frawley, Tax Partner with Deloitte and a former President of the Irish Tax Institute gave her insights on the IP landscape – “Moving IP out of Ireland would be quite an expensive exercise – at a minimum you may have to pay capital gains tax of 33% and any uplift in value since you insured it and potentially would also have to repay IP allowances that you claimed in Ireland”
Many of these products, especially biologics, vaccines, and cell & gene therapies, require highly specialised manufacturing capabilities and environments. Ireland has decades worth of qualified talent, infrastructure and regulatory approvals already in place. Recreating that in the U.S would take years and billions of dollars in investment.
Potential Impact:
If tariffs are to be introduced, the most likely impact would be in the medium term, when businesses are reluctant to make decisions and delay or freeze new hires. This would be the most immediate response. Instead of layoffs, companies will maintain their staff levels but may not increase team sizes.
In the long term, FDI and large-scale investments and expansion may be paused until impact assessments can be made by the company. This may result is a reduction in future investment – however this is much further down the line.
Final Thoughts:
It is not all doom and gloom, there are reasons to be optimistic. While tariffs are a cause for concern, the complexity of relocation, the scarcity of skilled talent in the US, combined with IP laws, reinforce the strategic security of Ireland’s pharmaceutical centre.
For more Life Sciences insights or to discuss career opportunities in this field…
Connect with Aidan on LinkedIn or at aidan.crowley@barden.ie