From powerhouse to pressure point: The future of Ireland’s Pharma sector
The pharma sector is one of the country’s biggest success stories. Its economic impact is very substantial, with approximately 50,000 people directly employed, and a material contribution to our strong corporation tax receipts stretching back years.
But past achievement is no guarantee of future success. Ireland’s status as a hub for the pharmaceutical sector is under threat in a number of different ways.
The latest US tariffs are part of this, and tend to dominate headlines, but the cumulative pressure underpinned by other issues could be what tips the balance against us. If we want to continue to win investment, a relentless focus on competitiveness is needed.
It is early to assess the long-term impact of the latest US tariffs, but the CSO’s export data does not give great comfort. As anticipated, there was a large spike in exports to the US in advance, as firms looked to stockpile inventory to circumvent the extra costs.
After the tariffs were implemented, the figures initially remained solid but recent months tell a different story. In October 2025, Irish total exports of medical and pharmaceutical products were 35% lower in value than the same month a year prior. In November 2025, it was a 50% decline versus the prior year.
Clearly it’s far too early to characterise a few months as part of a definitive trend. But Ireland is less competitive today than it was before the tariffs. It’s a plain and simple fact.
The pharmaceutical industry has invested billions in Ireland over many years. Nine of the top ten pharma firms in the world have a presence here. Concern about the future does not centre on these operations, which are already built and would be very expensive to dismantle and replicate elsewhere. The question is whether Ireland is well placed to secure new pharmaceutical investment at the same rate as in the past.
Pressure points on Ireland's pharma industry
US tariff changes
US tariffs are a high-risk factor for Ireland’s economy, as pharma constitutes over half of Irish goods exports, with the US being a major destination. While many pharma products have historically been exempted, recent changes are a drag on our potential. So Ireland needs to make sure that, in other relevant areas where we have control, we enhance our competitiveness to try and make up for the ground that has been lost
New EU regulations
The volume and complexity of proposed new regulations was a substantial risk to growth. Hence the Omnibus package published last year, which pushes back some of the compliance deadlines and places fewer obligations on smaller companies, in particular.
Larger companies, however, like the pharma giants that have invested in Ireland, still face a very material and expensive increase in their compliance obligations over the coming years. That includes the Corporate Sustainability Reporting Directive (CSRD) which will require reporting on their environmental footprint, as well as new rules around recyclable packaging which have been less heralded but are similarly significant in their potential impact. Material remodelling of packaging lines is likely to be required for some firms.
Infrastructure challenges
Ireland’s infrastructure and cost of doing business issues are well ventilated at this stage. Our electricity prices are amongst the highest in Europe. Our water infrastructure requires significant upgrades and investment, and housing remains a critical societal issue.
The National Development Plan announced last summer aims to address all of this, but the recent track record of delivery on large public projects is not good. That has to change over the coming years or the risk to our status as a leading pharma jurisdiction will grow.
Despite the headwinds and challenges, it’s important to remember that the sector remains in a good place today and optimism is not in short supply either. Industry groups report that large majorities of industry leaders feel positive about Ireland and the future of their operations here. But complacency must be avoided and businesses have choices as other jurisdictions strive to win investment through a wide variety of incentives.
Ireland’s pharma story is a testament to our demonstrated ability to deliver a proposition that works for business. It’s a story of innovation, talent, ingenuity, and recognition of what companies need to succeed.
To build a stronger future, a relentless focus on competitiveness is needed, underpinning policy and delivery at home, and advocacy and influencing activity in Europe.
Related content
