The Irish pharmaceutical sector

Foreign multinational enterprises (MNEs) have played an important role in
the development of the Irish economy in recent decades. Since the economic
recovery began in 2014 after the financial crash, approximately half of the
growth in the economy has come from the expansion in output of these MNEs
(FitzGerald, 2023).

Among the key sectors, that are dominated by foreign MNEs, is the
pharmaceutical sector.1 It has grown in importance over the last 20 years
and is now a substantial employer and a major generator of Irish corporation
tax revenue. Its continuing success is of considerable importance to the Irish
economy.

A number of US multinationals, such as Pfizer, Eli Lilly, MSD, Abbvie and
Johnson & Johnson are key players in the pharmaceutical sector in Ireland,
and quite a high proportion of the sector’s output by value goes to the US.
There are a number of multinationals from other countries, such as France
and Switzerland, that are also significant players in the sector, with
substantial sales in the US.

This paper analyses how recent policy changes in the US, in particular an
imposition of a 15% tariff on exports to the US, will affect the Irish
pharmaceutical sector and, through it, the wider economy. It also considers
how further US policy changes might add to the costs for the pharmaceutical
sector in Ireland, and the wider economy.