Barry Heavey from the IDA reveals the pharmaceutical climate in Ireland and the company’s hope for the country’s future in the pharmaceutical industry.
According to IPHA (Irish Pharmaceutical Healthcare Association), “Ireland is one of the leading locations for the pharmaceutical industry in Europe.” With a population of 4.5 million people, Ireland boasts approximately 120 plants from overseas companies, including nine of the 10 big pharma companies—most of whom have operated in Ireland since the 1960s. IPHA also reports that “Ireland is now the largest net exporter of pharmaceuticals in the EU,” accounting for over 50 percent of all exports from the country.
Ireland’s inward investment promotion agency, the IDA, is a non-commercial, semi-state body that promotes Foreign Direct Investment into Ireland. Barry Heavey, Head of Life Sciences at IDA Ireland, participated in an exclusive Q&A with Pharmaceutical Processing. His edited responses are below.
Q: Could you tell us a little bit about IDA Ireland? (How did it start? What areas did you specialize in at the time?)
Heavey: Our organization is a government organization from Ireland. We are responsible to attract and help develop foreign companies to set up operations in Ireland. We’ve been operating in this role for about 70 years now—doing this very successfully and in target areas. One of our key target areas is the life science sector, for which I’m responsible. Other key sectors include technology and financial services. Within life sciences, we cover pharmaceutical, biotech, medical device, and engineering and industrial technology companies.
To use the chemical terminology, we act as something of a catalyst. We support companies in developing their businesses Ireland: investing in R&D, upscaling their workforce, and diversifying their activities. And because we have over 1,200 clients in Ireland in various sectors, we can also form a role as a catalyst for business-to-business linkage and collaboration. We want to play more of that catalytic role in the future.
Q: What don’t most people realize about IDA Ireland?
Heavey: The length of time we’ve been operating and the fact that we have deep, subject matter expertise in the life science industry.
For example, we attracted Bristol-Myers Squibb to make their first investment in Ireland over 50 years ago. And just last year they announced the investment of an additional 900 million dollars in a new biotech manufacturing facility for some of their latest cutting edge biologics.
Our track record in winning investments in the area [Ireland] and our knowledge of the sector is something that maybe not everyone is aware of. Some companies obviously have dealt with us for a long time and are familiar with what we do, but others may be less so.
Q: What is one of the biggest successes of your company?
Heavey: The Bristol-Myers Squibb investment was the second biggest investment in manufacturing of any company in the life sciences in our history. The biggest right now is Pfizer, who invested almost two billion in their biotech manufacturing facility in Dublin.
One of the things we are very proud of is in the last 10 years, we’ve had over $10 billion of investments in biotech manufacturing. Just recently, Shire plc announced that they’re going to be investing $400 million dollars in a new biotech facility in Ireland. We have seen strong linkages between the growth in the U.S. biotech sector and the fast-growing Irish biotech sector—U.S. companies and companies with operations in the U.S. are also having a lot of success Ireland.
I think that trend that we’ve seen of sustained new investments in biotech has been something that we’re very pleased with/very proud of. I think it’s been important because the industry in Ireland for a long time was very focused on chemistry and small-molecule drug manufacturing. That remains a very important sector for us—we still see a lot of investment in that area and companies reinvesting in their existing facilities, but it’s also had some challenges with companies facing patent cliffs and mergers and acquisitions. So, it’s gratifying to see the sector in Ireland strengthening and diversifying through investment in biotech as well as small molecules.
For the future, one thing that we’re very excited about is the potential for elements of convergence to happen between sectors in Ireland. Because we have such a strength in small- and large-molecule manufacturing, we feel that Ireland could be really exciting location for the development of new therapeutic modalities, like antibody drug conjugates, gene therapy, and so on. There’s also the potential for convergence between next generation drugs and next generation drug delivery devices. We’ve already seen the beginnings of the closer formation of business collaborations, and it’s something we’re excited about hopefully seeing more of in the future.
Q: On your website it says: “Ireland is one of the best places in the world to do business.” Could you elaborate on that?
Heavey: One of the key elements in successfully developing a business is talent, and Ireland has consistently ranked highly by international judging agencies as a place to source talent. We have one of the youngest populations in Europe; we are English-speaking; our population has free college education; and there’s a very high level of engagement in college education (science and engineering in particular).
Ireland also has an open-door policy to migration within Europe. A lot of talented people from across Europe come to Ireland to work in high-tech jobs, life sciences, etc. Despite the fact that we’ve had a disproportionately high level of foreign-directed investments in Ireland, companies have been usually successful in hiring the talent that they require.
We saw the trend coming a few years ago in biotech—with more and more biotech drugs being approved and companies expanding their workforce. And because we’re a small country, we can respond quickly to those trends that we see. In response to that trend and growth in biotech, we invested approximately one hundred million dollars in creating a specific research and trading center for biotechnology, called the National Institute for Bioprocessing Research and Training (NIBRT). Last year that training center trained over 4,000 people in biotech manufacturing and development. They are a very specialized center and have worked very closely with the companies who have invested in biotech manufacturing in Ireland in recent years, such as Lilly, BioMarin, Merck, etc. These companies could hire people who have already been trained in NIBRT and also send people they’ve already hired to NIBRT for deep, immersive training.
People have described NIBRT as a flight simulator for biotech manufacturing. The people who’ve trained in NIBRT have worked on real-world equipment in a real-world environment, so their level of knowledge and experience when they enter GMP facilities is much higher than it would be otherwise. And this is a fantastic resource for the industry, which is an example of the government working hard to make it as easy as possible for companies to hire appropriately trained peole and to do business in Ireland.
Q: How would you describe the pharmaceutical/biopharmaceutical climate in Ireland? Are there currently a lot of companies in place?
Heavey: It’s growing really fast at the moment. We have nine of the top 10 pharma companies in Ireland—the only one we don’t have is AstraZeneca. But we are also seeing a growth now in the mid-cap pharma space. So, companies like Regeneron, Alexion, and Shire have all set up or expanded their operations in recent years. We’re not only seeing the top tier companies, but we’re also seeing the second and third tier companies in terms of revenue and scale. Often, those smaller companies are the ones with really strong pipelines and new technologies.
We feel that the industry is in a very vibrant space at the moment in Ireland and is growing very fast. The industry has been diversifying gradually over time. It was predominantly small molecules about 15 years ago and it has grown now to be a mix of both small and large molecules with more companies active in research as well as manufacturing.
Q: Could you describe Ireland’s Foreign Direct Investment history?
Heavey: We have increasingly focused on specific sub-sectors where we’ve seen real strength and repeat investments. Some sectors we have had less success in, such as the automotive sector, but the reason we’ve come to focus on industries (like tech, financial services, and life sciences) was because we were seeing sustained success over a 50-year period and reinvestments of companies.
There are about 70 pharmaceutical companies in Ireland, but many of those companies have multiple investments in Ireland. For example, Novartis has three sites in Ireland: a global business services center, a manufacturing center for small molecule drugs, and also their Alcon manufacturing facility. We have a number of other companies, like Lilly, J&J, and so on, who all have multiple operations and repeat investments.
Our strategy has been to focus on those sectors where we’ve been able to have repeat investments and try to build relationships with those companies and make sure we continue to give them what they need to be successful.
Q: What are some of the regulatory bodies that pharma companies setting up in Ireland will have to work with? Are any of these regulatory bodies known to be difficult when reviewing a product and trying to bring it to market?
Heavey: The main regulatory authority in Ireland is called the HPRA, which stands for the Health Products Regulatory Authority. They have an outstanding reputation internationally as a regulator. There’s a huge number of manufacturing sites and a number of really important drugs that are manufactured for global markets in Ireland. The HPRA has a duty to approve and inspect the manufacturing facilities, be they small molecule, biologic, drug substance, or drug product. They also work in the regulatory space in medical devices.
The HPRA are the equivalent to the FDA in the U.S., and they have a very strong relationship with regulatory bodies in other countries. They are regarded as being a tough regulator, as they should be, and I think they have the respect of those working in the industry. . . . The IDA works hard to make it easier for companies to be successful and the HPRA understands the trends in the industry and is tough (but fair) in regulations.
Q: How do regulatory bodies in Ireland compare to the U.S.? To other European countries?
Heavey: The HPRA is very well-connected with many regulators in other countries because a huge amount of drug substances and drug products are exported from Ireland to other countries. Because they are so well-connected, I think that they [HPRA] compare very well and can take the best of practices from many jurisdictions.
I’m not an expert on regulatory affairs, but I consistently hear that regulatory authorities in Ireland are great to work with and are very well-versed in global trends in manufacturing and regulatory affairs.
Q: What, would you say, is one of the greatest advantages of having a pharma companies’ headquarters in Ireland (as compared to having a facility in Ireland and the headquarters elsewhere)?
Heavey: Well, I think, in terms of the specific advantages of HQing, what we’re looking for from companies is to make long-term, sustainable investments in Ireland. We aren’t specifically seeking out HQ investments from companies. Obviously there’s been a lot of media attention on the developments with regards to Pfizer looking to potentially move their headquarters to Ireland with the acquisition of Allergan, but that’s something that was a business decision between those two companies and not something that IDA was actively targeting in any way. We have a long history of investments from both companies—Pfizer dating back to the 60s and Allergan dating back to the 70s. We’ve worked with them all through those decades and were never seeking the movement of a headquarters to Ireland.
So, we don’t have a particular value proposition for companies to move headquarters, but we do think there is a value proposition for companies to create substantial investments in Ireland—accessing a talented workforce and being successful in growing their business internationally using Ireland as a gateway to Europe and beyond.
Q: What are some of the biggest challenges facing the pharmaceutical industry in Ireland?
Heavey: I think they’re the same challenges that’s facing the industry everywhere. From a manufacturing perspective, there’s a lot of positive things happening in terms of new drugs being approved (the FDA approved a record number of new drugs last year), but it’s very difficult at the moment to model the demand volume for those projects in the future. Specifically, what’s the right size for a company to build up in terms of a manufacturing footprint and what technology they should be using/utilizing in manufacturing:
- Single-use systems/stainless steel facilities/hybrid facilities
- Outsourcing to third party manufacturers
- A hybrid of in-sourcing and outsourcing
There are a lot of variables in demands forecasting and capacity forecasting in the industry at the moment. I think that’s a challenge for the global industry and a challenge for Ireland because we need to look at increasing the number of people who are ready to work in the industry. . . making sure we get the right number to meet the needs of the companies. And make sure that Ireland can remain a competitive location and maintain its excellent regulatory track record with all this new investment coming in.
A wider issue is the whole challenge around reimbursements and the cost of new medicines—especially in orphan diseases or very specialized forms of cancer, where some of these drugs can have a huge impact on patient outcome but could potentially could also have a big impact on the payer. We’ve seen that in areas such as the recent new drugs approved in hepatitis C, cancer, and the cholesterol-lowering drugs. There is still an equilibrium that needs to be found between the payers and the industry, but that’s not unique to Ireland. That’s a global issue.
. . . Another thing we’d like to do in the future—I think there needs to be more activity in the industry around business-to-business collaboration. . . . I think there’s huge opportunities to mitigate some of the risks through company-to-company collaboration, whether it’s through innovator companies collaborating with contract manufacturing organizations or with vendors of new manufacturing technologies (such as single-use systems). Engineering companies could bring in solutions in areas such as factory 4.0 or the industrial internet—collaborating with pharma companies to help them deal with increasing data challenges and requirements in manufacturing.
I think that business-to-business opportunities is something that’s both a challenge and a huge opportunity. And, again, with our high market share of tech and engineering companies, we’d like to think that Ireland can be a hotbed for that collaboration.