The State could lose up to a quarter of its pharmaceutical manufacturing capacity over the next five years if US president Donald Trump sticks firm to his determination to press drug companies to invest more in the US, industry sources fear.
“There are a load of ifs and buts, but there is no doubt that the current uncertainty is not good for Ireland,” said one industry figure.
The US president on Monday announced plans to cut prices for prescription drugs by between 30 and 80 per cent, vowing to “cut out middlemen” and urging pharma companies to raise their prices in Europe.
100 days of Trump: “It’s like The Karate Kid, tax on, tax off, tariffs on, tariffs off”
It comes despite pharma executives lining up to announce close to $200 billion (€179 billion) in planned investments in US manufacturing facilities, as they look to head off separate tariffs that Mr Trump has threatened to impose on the sector.
“Smart pharma companies would have been well ahead on this,” said one Irish industry executive. “With Trump’s track record, you cannot imagine they would not have mapped out the risk and planned for it. You would not like to make a guess on what it could mean but I would not be surprised if you were to see a 25 per cent fall in manufacturing over five years.”
Like all industry sources who spoke to The Irish Times, for this article, they requested that they not be identified.
Data from the Central Statistics Office on exports show that chemicals and related products, which include medical and pharmaceutical products, made up 91 per cent of the €12.9 billion in total exports to the US in February.
Any substantial loss of manufacturing in the State would have an inevitable knock-on impact on the Republic’s corporation tax take, with companies affected also likely forced to address their Irish cost base.
[ Irish pharma sector worries about impact of Trump’s order on medicine pricesOpens in new window ]
An assessment by UBS says Bristol Myers Squibb and Pfizer would be worst hit among US companies if Mr Trump’s threatened “most favoured nation” price were imposed on the top 50 medicines in the US. Eli Lilly would be among the least affected.
Among European drug groups, AstraZeneca and Novo Nordisk would be the big losers.
Most favoured nation status, also known as international reference pricing, would mean prices in the US set at the lowest level those drugs were sold at in other countries.
UBS said US companies would face a 10 per cent fall in profits in such a scenario, with their European peers taking a 6 per cent hit.
The uncertainty triggered by the US president’s latest announcement was illustrated on Tuesday when German group Bayer – the first Big Pharma company to report in its aftermath – confirmed its 2025 outlook after first-quarter figures that outpaced expectations.
“In a more certain environment, we likely would have adjusted our guidance for pharmaceuticals upward,” said chief executive Bill Anderson on a media call.
He said it was too soon to say how the Mr Trump’s efforts to lower US drug prices will affect the company but, in a nod to the president’s position, agreed Europe should pay more for medicines to offset cuts to higher US prices.
“There’s an opportunity for European policymakers to look hard at their approach and make sure that each European country is also funding its fair share for innovation,” he said. The cost “should not be falling heavily on one country at the exclusion of others”. – Additional reporting Reuters/Guardian
