IDA Ireland: Dave Shanahan explains the reasons for Ireland's remarkable impact in pharmaceutical space




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Video title: IDA Ireland: Dave Shanahan explains the reasons for Ireland's remarkable impact in pharmaceutical space
Released on: August 31, 2011. © PharmaTelevision Ltd
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In this episode of PharnaTelevision News Review, Fintan Walton talks to Dave Shanahan, Global Head of Life Sciences of IDA Ireland
Reasons for Ireland's remarkable impact in pharmaceutical space
Fintan Walton:
Hello and welcome to PharmaTelevision News Review here at BIO 2011 in Washington. On this show I have Dave Shanahan, who is Global Head of Lifesciences at the Irish IDA , welcome to the show.
Dave Shanahan:
Thank you very much indeed Fintan.
Fintan Walton:
Tell us what the IDA in Ireland actually does?
Dave Shanahan:
So IDA is the government's investment and development agency, we are responsible for attracting foreign direct investment into Ireland with a long track record since the 60's of going all over the world and discussing with multinationals why Ireland is a great value proposition for companies to come and locate to.
Fintan Walton:
Okay, now obviously we are here at BIO here in Washington you are here obviously as a representative of the life sciences interest of Ireland, but one of the areas that Ireland I suppose has made a remarkable impact is in the pharmaceutical space, could you tell us why that is the case?
Dave Shanahan:
Well we've built a tremendous cluster over about 60-years we now have 9 of the top 10 global manufactures with sites in Ireland many of those have multiple sites and we have about 83 manufacturing facilities with 33 FDA approved global supply plants for pharma and the reason is because over many years multinationals who come to Ireland have found it a terrific place to manufacture their medicines, it's a high quality location with a very good regulatory reputation. I think we have a very flexible work force who work very hard and are intelligent and flexible and also I think we've established a track record and of course we offer a very effective rate of corporation tax by comparison with other global locations, so it was the broader reasons why we've been successful.
Fintan Walton:
Right, and obviously we are all aware that pharmaceutical industry is changing as all industries do change, so what is Ireland doing to help pharma companies change in this changing tides?
Dave Shanahan:
Well I mean, I spent 20-years in pharmaceuticals and multinational companies particularly at the sales and marketing end and I think when you look at the customers issues essentially the stakeholders who pay for medicines are financially distressed almost everywhere healthcare is a huge spend by government, governments are perhaps not sophisticated enough to truly recognize the value of medicines and of course it's easy to insist on price cuts in pharmaceuticals rather than closing hospitals or whatever. I think Ireland is I wouldn't say we are an exception to that, but I think we do understand the value chain in pharmaceuticals and what we are trying to do is to work with our companies in the obvious areas, so in manufacturing as an example we have a tremendous focus on lean and green operations, tremendous focus on development and manufacturing really trying to make the products less expensive to manufacture, less expensive to get into the healthcare system. I think what's changed in the last few years is the payers are insisting that new medicines must come with pharmaco-economic analysis, they must come with outcomes which are demonstrably superior both in clinical and financial times and that's the piece that we're trying to work with our companies on so we've invested in data informatics group in our universities who are capable of taking a lot of financial and reimbursement led data working with that, we've established supports from academia to industry looking at process optimization in both small and large pharma and in the biotech arena for instance we've just recently opened our national institute for bioprocessing research and training that's a 52 million investment by IDA , Euros and that offers essentially almost to soup (indiscernable) solutions provider for biotech manufacturing, so everything from the characterization of the products that come out of your process, but also the introduction of things like process analytical technologies and lean six sigma methods to make the processes more cost effective ultimately.
Ireland's Investment opportunities and economic competence
Fintan Walton:
Right and just going back to this thing, I mean what's really important obviously for pharmaceutical companies is the regulatory environment the last thing that anybody wants is an FDA inspection that closes the plant then so that's all to do with people so it's very easy to say you've got great people in Ireland, but what is Ireland actually doing to make sure that you actually genuinely have great people work in the pharmaceutical industry?
Dave Shanahan:
Well if I was to go back again to I suppose an inspired decision by the Irish government in their 60's, the late 50's and 60's to really open up to the outside world and globalize and to seek to attract foreign direct investment, one of the decisions that came out of that ultimately is the recognition of the importance of education, so the Irish government made secondary education free for everybody. We already have free primary education and that really we eliminated fees at university level so in another words we upscaled our children and we have a very young demographic the youngest demographic in Europe so we have very high level to secondary education participation and very high levels by comparison with the OECD third level so companies can access people who are highly educated, very skillful and a very committed to working for multinationals because Irish people have learnt over the years that multinationals provide great career structure, great opportunities their jobs are highly priced and it means that companies can really take the cream of the talent that we have into their operations and we continue despite all of the retrenchment we've had to make in terms of physical consolidation we continue to invest in education, we continue to invest in science and laboratories as I mentioned as an example of IDA making very strategic investments for the long-term sustainability of our educational system and the supports we can provide to industry.
Fintan Walton:
I mean one obvious question as along those lines of the physical constraints that Ireland has imposed on itself, I mean from Ireland's point of view and from anybody looking at Ireland as an investment opportunity how would you defend Ireland's current economic condition to the decision for a company to come in and set up in Ireland.
Dave Shanahan:
Well there is a few things I would say, the first is that Ireland is only committed to its corporation tax rate and it's important to state that because that for us is a non-negotiable issue we've had an effective 12.5% rate of corporation tax going back originally to a 10% manufacturing corporation tax rate we had in the late 50's, so we have operated a 12.5 effective tax rate since before the European Union was formed so I would like to get that on the record. I think in terms of the physical position of the country we have an agreed plan to get the deficit back to 3% of our GDP by 2015, we are working with the EU and the IMF we've already had two reviews of that plan we are not Greece we are clearly on track that government has imposed quite strong physical austerity particularly in the public sector, so in the public sector public servants salaries are down by 14%, we've essential reduced the starting salaries of new public servants by 10% and up to 20% depending on grades and industry itself has benefited by reduction in the consumer price index, our property prices are down by 50% our construction costs are down by 50% and our energy prices have all come down. So we have regained a lot of competitiveness that we lost when the economy is at full employment and we certainly have high unemployment now by comparative terms, but that means that for employers coming into Ireland they have better talent and more affordable, more available to them than they've ever had in the past. So I think great business starts with great people and we still have great people and all the other elements of our value proposition, the talent, the track record and the tax remain, so I think companies don't come to Ireland for our market it's very small, so how our domestic economy is doing is not the important thing what's important is that the conditions that make Ireland a great place to do business on a global stage remain and they've never been as true as they are now we're certainly in a better position than we've ever been.
IDA's future plans for biotech and pharma industry in Ireland
Fintan Walton:
Looking at the future and what is the overall future plan division that the IDA has specifically for the biotech and pharmaceutical industry in Ireland?
Dave Shanahan:
Well I think the one thing we all need to be cognizant that the value of the medicines that we make must be affordable or otherwise we just not going to get market access we are not going to get reimbursement, that being said we also have the challenge of low cost manufacture from particularly Asian locations and we have the opportunity of biosimilars and I think what we are thinking about is that long-term value how will that be delivered and I think it's need to be delivered by great science, I think it's needs to be delivered by low cost manufacturing, and I think it needs to be delivered by a real focus ultimately on the patient and the healthcare system to position that therapeutic in a manner which the system can adopt and which is demonstrably superior to usual care. So I think the value chain in pharma must almost consolidate so that the people in manufacturing are intimately aware of the fact that this product tool to be used has to be relevant to that patient but it must be affordable and I think that's how we will compete with Asia, we've done a lot of work to optimize our processes to make our manufacturing as lean as possible and we will continue to drive that really lean high quality manufacturing.
Fintan Walton:
So you see the pharmaceutical industry continuing to be in Ireland?
Dave Shanahan:
Absolutely I think we'll see expansion in biotech, I think we'll have challenges undoubtedly in our small molecule, generics and commodity medicines, but I also think that the era of personalized medicine and really strong biotech is coming and as the cost of the biotech production come down those medicines will be more affordable and can be made more available to our wider group of patients, so I think the future for biotech is actually very, very positive.
Fintan Walton:
Dave Shanahan, thank you very much indeed for coming on the show.
Dave Shanahan:
Thank you very much Fintan.
Fintan Walton
Dr Fintan Walton is the Founder and CEO of PharmaVentures . After completing his doctoral research on the genetics of cell proliferation at the University of Michigan(US)and Trinity College (Dublin, Ireland), Dr Walton gained broad commercial experience in biotechnology in management positions at Bass and Celltech plc (1982-1992).
Dave Shanahan
Global Head
Dave Shanahan currently serves as Global Head of Lifesciences at the Irish IDA. Dave Shanahan is a science graduate of university College Cork and a business graduate of Trinity College Dublin. He has worked for 22 years in Ireland's healthcare Industry, 20 years spent in Pharmaceuticals where he previously worked for J&J, ICI, Zeneca including 7 years as Country Manager Pfizer Healthcare Ireland. He was also CEO of Charter Medical Group a healthcare startup and has consulted for a number of Biotech and Pharma companies. He joined IDA Ireland as Global Head of Lifesciences in July 2009, responsible for IDA's global team working to attract further multinational investment to Ireland in the areas of Pharma, Biopharmaceuticals, Medical Technologies and Devices, Food and Healthcare Services.
PharmaVentures
PharmaVentures is a corporate finance and transactions advisory firm that has served hundreds of clients worldwide in relation to their strategic deal making in the pharmaceutical, life science and healthcare sectors. Our key offerings include: Transactions / deal negotiations; Product / technology valuations; Deal term advice; Due diligence & expert reports; Strategy formulation; Alliance management; and Expert opinion for litigation/arbitration cases. PharmaVentures provides the global expertise to ensure our clients generate the highest possible return on investment from all their deal making activities. We have experience of all therapeutic areas and can offer advice on both product and technology commercialisation.
IDA Ireland
IDA has national responsibility for securing new investment from overseas in manufacturing and international services sectors and for encouraging existing foreign enterprises in Ireland to expand their businesses. The businesses which IDA seeks to win are internationally mobile projects which can operate competitively and profitably from Ireland. This covers a range of sectors such as electronics, pharmaceuticals and health care, engineering and international and financial services. IDA Ireland markets this country as an attractive location for overseas investment through its network of offices abroad, emphasizing the stability and growing competitiveness of the Irish economy, the favorable tax regime, financial incentives, the outstanding skills base and our active participation in the new Europe.