Pharmaceutical/chemical products accounted for 44.6% of all products manufactured and sold by Irish industrial enterprises in 2013, according to new official figures.
Overall, the value of products manufactured and marketed in Ireland for the year increased 4.6% compared to 2012 to total 89.9 billion euros. The main reason for this big increase was the performance of the basic pharmaceutical products and preparations sector, which increased 7.2% by value from 27.1 billion euros in 2012 to 29 billion euros last year, according to figures published by the Irish Central Statistics Office (CSO). They are based on data from PRODCOM, the European Union (EU)’s standard classification of production statistics, which covers around 3,800 products.
Analysts suggest that one factor boosting Ireland’s pharma performance includes the patent expiry on a major blockbuster drug at the half-way point of 2013, but the figures seem to suggest that recovery is underway, following the 12% jump in Irish medical and pharmaceutical exports reported by the CSO for the month of May. This helped exports grow 15% overall from April to May, when they reached 7.9 billion euros, their highest level since March 2013, and experts are predicting that Ireland’s manufacturing sector will be contributing to the nation’s economic growth this year for the first time since 2011.
Meantime, merger and acquisition (M&A) activity in Ireland in the first half of 2014 increased by more than five times the level of first-half 2013, at a total of 147 deals accounting for 20% of all activity in Europe, and this was largely the result of deals in the pharmaceutical and construction sectors, says a new report from Experian.
Pharma M&A deals during the period have included the acquisition by Actavis of Forest Laboratories for around $25 billion, Medtronic’s purchase of Covidien for $42.9 billion and, earlier this month, the news that AbbVie is acquiring Ireland-based Shire for $54 billion.
A number of US corporations have been using M&A for tax inversion purposes, which involves buying a company located overseas and then moving their corporate headquarters to that country in order to avoid paying US federal and state taxes. While the US corporate tax rate is one of the highest in the world, at 35%, Ireland’s is the lowest, at just 12.5%.