Exports and Life Sciences
Life Sciences Q&A with Simon McKeever, Chief Executive, Irish Exporters Association on the supply chain of Life Sciences.
What mechanisms best encourage growth in Irish life sciences exports?
Ireland, as a small open economy, really punches above its weight globally in the LifeSciences industry. We are home to 9 of the top 10 world’s pharmaceutical companies and we exported nearly €32bn in medical and pharmaceutical products in 2016.
Our booming LifeSciences industry is largely due to our high number of educated graduates, access to the EU and undoubtedly our low corporate tax rate. Ireland’s universities in the fields of Engineering, Chemistry, Bio Chemistry and Bio Technology have strong cooperative links with industry in the sector. Irish third level institutions saw a gap in the education market for courses that produced highly skilled graduates in these developing technologies and there is now a close link between the industry and colleges in this country, ensuring that the skills needed in the sector are steadily met.
What kind of opportunities do you see Brexit affording Irish exporters in the life sciences industry?
Ireland has always been a powerful player in the pharmaceutical industry, attracting a significant level of FDI. Ireland has an excellent reputation globally as a centre of excellence in the LifeSciences industry and Brexit could result in increased FDI for companies wanting to move operations or business lines to Ireland in order to retain access to the EU market while still remaining in an English speaking nation.
Brexit may also create huge opportunities for service providers within the LifeSciences supply chain. Irish pharma companies currently use the UK as a landbridge / airbridge to ship finished products to mainland Europe and storage facilities in the UK are used for onward delivery within the EU. There is currently a serious lack of facilities of the scale required within Ireland so opportunities exist to build warehousing facilities here dedicated to LifeSciences, specialising in temperature controlled logistics with the resulting development of Ireland as a pharma distribution centre for the rest of the EU. This would of course need to be supported with the strategic development of sufficient air transport.
How should Irish life sciences companies ready themselves to make the most of these opportunities?
Preparation in all areas of Brexit exposure coming down the line will be key to making the most of opportunities. The IEA recommend that companies begin by mapping out each area of their business with exposure to the UK. It is crucial that Irish LifeSciences exporters do an impact assessment, especially in relation to the exchange rate, and look at their supply chains and the potential impact of changes in currency, customs, tariffs, VAT, visa requirements and EU regulations & legislation on them. We recommend in particular that companies carefully examine their product supply chains from raw material to finished goods.
It is unclear yet as to how the regulatory environment will change in a post-Brexit environment, but some scoping of this may need to be done for the UK marketplace. In the event of a threat to the UK landbridge, strategically, it would require a co-ordinated approach at national level to expanding our LifeSciences sector to meet the potential opportunity that Brexit may provide. It includes the need to scope out not only the increase in production but all the support services, including large scale temperature controlled warehousing, along with the strategic development of sufficient air transport, and the scoping of new more direct shipping routes to the EU.
Is the emphasis on increased supply chain security and patient safety putting pressure on the life sciences supply chain?
I would say more that there is increased responsibility on the manufacturer than pressure on the supply chain. Given the scale of this industry in Ireland and the specific nature by which these goods must be shipped, the wholesale distribution of medicinal products is an important activity in integrated supply chain management. Due to the improvements in reefer technology and remote temperature control monitoring, there has been an observed modal shift from air to sea for certain pharma products. However, due to the clinical urgency of certain biopharmaceuticals, such products are transported by air to their market destination.
Good manufacturing practice and good distribution practice need to work hand in hand and vigilance by all concerned in the supply chain is vital to ensure patient safety. The number of subcontracted companies involved in the supply chain for biopharmaceutical products with different modes of transport and temperature control has increased significantly. Collaboration between all parties, including manufacturers, logistics service providers, ports and airports, is crucial to ensure anti-theft and anti-counterfeit procedures, product integrity and patient safety. The Irish Exporters Association has been at the forefront of informing the Irish pharma supply chain of their GDP requirements through the IEA GDP Passport initiative. The IEA GDP Passport certification has become the gold standard for GDP in Ireland with all leading logistics service providers in the field now having obtained certification. As the pharma sector has grown in Ireland, the IEA has played a key role in ensuring that companies can reach and exceed the required compliance role in assuring quality of the supply chain and distribution of pharmaceutical and medical device products.