Sun, 12 Jul 2020

Irish Envoy Hits Back at Call to Repatriate Big Pharma

Voice of America
28 May 2020, 08:05 GMT+10

Ireland's ambassador in Washington is on a public relations offensive to reassure coronavirus-wary Americans that his country is a secure and dependable source of vital pharmaceutical supplies.

"One point that I wanted to make, and I will be making this endlessly over the next few years, is that whatever you do with your supply chain in the United States, you should regard Ireland as an entirely integral part, and one that carries no risk whatsoever," Daniel Mulhall declared in a recent conference call to an American audience.

As the country of origin for almost half the ventilators used in hospital emergency rooms worldwide, Ireland is attracting unprecedented attention for its role in providing essential pharmaceutical supplies during the coronavirus pandemic.

Not all of that attention is welcome. In an interview on Fox News earlier this month, U.S. President Donald Trump suggested that pharmaceutical companies like Johnson & Johnson and Pfizer should move their Irish factories back to the United States.

Asked whether the U.S. is overly reliant on Chinese drug makers, Trump said, "It's not only China, you take a look at Ireland. They make our drugs. Everybody makes our drugs except us. ... We're bringing that whole supply chain back."

But Mulhall says treating Ireland as just another foreign player would be a mistake.

In an interview with VOA, Mulhall argued not only that his country is a time-tested, trustworthy partner of the United States, but also that it is well equipped - backed by the Irish government's political will - to meet America's vital needs during the pandemic.

Ventilator production increased

Ventilator production, aided by indigenous firms like the family-run M&M Qualtech, is now several times what it was just months ago, Mulhall said. An Irish company, formerly known for its expertise in manufacturing forklifts, has invented a unique splitter device that allows a single ventilator to support two patients simultaneously.

Aerogen, another Irish company whose aerosol delivery system is used by 60% of U.S. hospitals, has also seen a worldwide surge in demand and plans to double its output.

According to figures published by Dublin, the biopharmaceutical industry has invested about $10 billion in new facilities in Ireland, most of that in the last 10 years. That represents one of the biggest waves of investment in new biotech facilities anywhere in the world.

There are 40 U.S. Food and Drug Administration-approved pharma and biopharma plants on Irish soil, and a total of 75 pharmaceutical companies that currently operate in Ireland; the country boasts a total of almost $439 billion in annual exports of pharma, bio and chemistry products.

Tax policies spark expansion

Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics, told VOA in a written interview that the dramatic expansion is due in part to favorable tax policies.

"Ireland is a special case in the sense that [it] is a low tax jurisdiction in a developed economy, which many U.S. pharma [multi-national corporations] have used for tax optimization as well as actual production - you can get a better Irish tax deal if you actually produce stuff there."

But now, he said, Ireland is worried, as are many U.S. allies, that measures aimed at China might have a spillover effect on their countries.

An Irish Embassy spokesperson challenged any suggestion that Ireland is a "tax haven," noting that its corporate tax rate has stood at 12.5% for decades. "For an island nation on the periphery of Europe, this has been and remains today an entirely legitimate industrial policy."

Young workforce an advantage

The spokesperson told VOA that additional factors making Ireland attractive, especially to American investors, include a young, well-educated, English-speaking work force and the "connectivity" Americans feel with Ireland, given that roughly 10% of Americans claim Irish heritage.

He added that Ireland's membership in the European Union offers "barrier-free" access to the vast EU market for Ireland-based U.S. companies.

Mulhall acknowledges that COVID-19 has forced nations and businesses to reassess their supply chains and address "any vulnerabilities that may exist." He called the process "a necessary and entirely appropriate exercise to undertake."

But, he says, a careful diversification of sources, through trusted trading partners, is the best way to ensure a secure supply of essential goods and services and to ensure that the supply chains remain resilient and efficient.

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