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IRELAND’S MULTI-BILLION EURO pharmaceutical export industry could be facing a serious crisis because of a series of patents that are due to expire.
Chris van Egeraat, lecturer of economic geography at NUI Maynooth, estimated that about €19 billion worth of Irish exports could be at risk as a result of patents expiring. Van Egeraat told Bloomberg: “From the moment they come off patent, it will be immediately reflected in export figures.”
The fall-off in exports could account for a 52 per cent drop in sales by 2013, according to Bloomberg.
According to PharmaChemical Ireland, Ireland is the largest net exporter of pharmaceuticals and medical products in the world – with the country’s pharmaceutical industry currently generating 50 per cent of the total amount of the nation’s exports.
Eight of the 10 largest pharmaceutical companies have Irish facilities.
Pfizer’s cholesterol-fighting drug Lipitor is the first product due to expire, with the deadline marked for the end of this month. The Wall Street Journal reports that the company is planning to sell the drug at generic prices directly to customers once the patent runs out.
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We have known about this patent cliff for years, yet we have supported generic products who do not engage in R&D. The downside of that is that large Pharma companies are not investing in NPD because of falling revenues and we have no new drugs to take over. We have done nothing to encourage R&D and we are going to pay a heavy price unfortunately.
The pharma companies are not sleep walking into this and have been living with this kind of thing as part of their normal business risks for years.
The good ones will be bringing replacement product on stream and selling the patent rump to generic manufacturers as they free up capacity for new product.
It is a well trodden path
“with the country’s pharmaceutical industry currently generating 50 per cent of the total amount of the nation’s exports”
Merchandise exports, not total exports. Ireland is ahead of the curve internationally in switching to services exports (software, consultancy, financial services, etc) and they now constitute 50% of all exports, so pharma is – after some simple multiplication – about a quarter of total exports.
This is a relatively serious issue, not because it is unexpected or even because of the effect it will have on our export statistics, but because of the effect it will have on (a) corporate tax revenues, and (b) FDI decisions by pharma firms in relation to existing and new plants.
Don’t forget that there is also a generic pharmaceutical industry in Ireland that provide people with affordable medicines. Some of those people could not afford the medicines when it is not generic!
When I was in college I did my work placement with Eli Lilly and it was an amazing place to work. They really look after their staff; the (very subsidised) canteen was award winning and as good as any restaurant. They threw a big party for everyone’s kids at Christmas and gave them Easter eggs as well. They really do everything they can to provide a safe working environment; with schemes such as flexi time (where possible) and of course employees are well paid.
These are exactly the kind of employers we should be supporting/keeping in this country.
@Patrick The Cipramil/Lexapro, Losec/Nexium, Clarityn/NeoClarityn trick has been closed by European regulators.
Overall, this is not a huge issue as Pfizer bought Wyeth recently, as the latter have a better “pipeline” of new drugs coming to the market. Pfizer would have negotiated the price for Lipitor which allowed them to cover the costs of developing it. If they had spent the money on developing new products rather than on marketting, they might not be in the position they are now.
Anyway, can we see real figures of what is contributed to people and the economy, rather than the not very informative figures of what value was exported?
So do you not just alter the drug ingredients slightly, give it a new brand name, work the marketing magic and take out a patent on the new brand and you’re away again ?? Example is Cipramil which is now called Lexapro because the patent ran out. So the manufacturer used a different binding agent in the drug, put it in a new box and off they went again with a “new” product and a new patent. I’m sure there might be a few sweeteners offered to doctors as well to prescribe the new named drug ! So for these reasons I don’t see the expiration of some patents being much of an issue really. It’s cheap labour in Asia that’s more of a worry where major manufacturers move their entire operations over to India or somewhere at a fraction of the cost.
No this is now not allowed. It used to be but unless it’s a completely new formulation the FDA and EMEA will not grant licenses.
When we talk about Pharma exports being a quarter of our total exports…
…how much of that is real exporting and how much of that is part of the double Irish tax dodge?
More of a question than a comment but can patents not be extended?
A normal patent gives you 20 years. You can apply for an extra 5 years in special circumstances i.e. drug companies. Assume that all this has been well researched by whoever owns the rights to Lipitor
You can. The makers of Prozac extended their patent by inventing a new disorder based on PMS. They then made the pills pink, whacked the price up 300% and called it “serafem”. They also marketed it to dogs as “reconcile”.
Check out the documentary “Big Pharma, Big Bucks”, it explains it all :)
Here is another question, how much does the hse spend on these companies products each year?
a good few of the companies are/will merge with other larger companies so it is a concern that the patents are coming on stream but the industry is adaptable !
have your say