The height of Croagh Patrick dominates the skyline of Westport, a fairly city on Eire’s Atlantic coast. Dominating its economic system, alternatively, are the not-so-pretty windowless gray manufacturing unit models that manufacture the world’s complete provide of Botox for a US firm. And Donald Trump needs pharma manufacturing to maneuver residence.
The US president this week stepped up his criticism of American firms’ Irish operations. His threats to impose tariffs to encourage buyers to reshore are weighing on the 7,000 individuals of Westport: some 1,500 of them are employed by AbbVie to make the wrinkle-erasing drug.
“People are holding their breath,” stated Geraldine Horkan, chief govt of the Westport Chamber of Commerce, who labored at Allergan earlier than its takeover by AbbVie in 2020. “It’s like an aeroplane circling in a holding pattern.”
Eire has develop into a serious base for US pharma firms together with Pfizer, Eli Lilly and Johnson & Johnson.
Apart from Botox — which leaves Westport as vials of powder to be blended with saline resolution earlier than injection into superstar foreheads or to deal with cerebral palsy or muscle spasms — factories in Eire churn out energetic components for medicine together with Viagra, weight-loss treatment Mounjaro and statins for prime ldl cholesterol.
Eire has been speeding to export prescription drugs to the US earlier than any tariff axe falls: in February, 91 per cent of all its items exports to the US had been chemical compounds and associated merchandise, which embody medical and pharma items. Irish pharma exports to the US within the first two months of the yr reached practically €20bn, in contrast with €44bn for the entire of final yr, in response to official commerce information.
Regardless of Trump’s imposition of world tariffs, which he final week paused at a baseline world charge of 10 per cent pending talks on commerce offers with the EU and different international locations, pharmaceutical items are presently freed from tariffs.
Eire’s overseas and commerce minister, Simon Harris, says it could be “inappropriate” and “bizarre” for the US to impose tariffs whereas negotiating.
However a reprieve appears to be like more and more unlikely. The US commerce division has launched a “Section 232” investigation into the sector which might permit the president to limit imports deemed a risk to nationwide safety.
That would probably result in tariffs within the “next month or two,” US commerce secretary Howard Lutnick stated.
Trump, who used a gathering with Taoiseach Micheál Martin final month to complain that Eire “has got the entire US pharmaceutical industry in its grasp” on Monday lashed out on the sector once more.
“We don’t make our own drugs, our own pharmaceuticals any more. The drug companies are in Ireland and they’re in lots of other places — China,” he stated.
Allergan opened a plant to supply contact lens resolution and eyecare merchandise in Westport in 1977. Now, the true money-spinner is Botox however the facility additionally produces eyecare prescription drugs and 70 per cent of Westport’s manufacturing is bought within the US, in response to the Irish operation’s most just lately filed outcomes, from 2023.
Botox now has rivals making chemically related merchandise — rival medicine embody Dysport, produced by France’s Ipsen and Xeomin from Germany’s Merz — However AbbVie says it’s assured it may well preserve its management place.
Whereas Botox for beauty functions introduced in $2.72bn in web revenues final yr, in response to AbbVie, therapeutic Botox netted $3.3bn. Tariffs would increase the value of medication for customers, and beauty purposes are usually not coated by US medical health insurance.
AbbVie — which doesn’t formally disclose the place it makes its merchandise — invested €160mn in a second biologics facility in Westport 2020 and manufacturing can’t be “shifted overnight”, stated Peter Flynn, a neighborhood councillor and former worldwide director of tax and finance at Allergan. “[Trump’s] cheap remarks aren’t doing anyone any favours,” he stated.
“With the automation of production lines and ever increasing quality standards, the focus in Ireland has changed with multinationals now employing highly qualified and experienced people, many of whom play a key role in R&D,” he added.
Eire is the world’s third-largest pharma exporter, with 90 websites that provide the EU and different international locations in addition to the US. Greater than €10bn has been invested within the sector over the previous decade. Denmark, Switzerland and Singapore are different international locations with massive pharma sectors now in Trump’s sights.
Many drugmakers have responded by asserting massive investments within the US. Johnson & Johnson has pledged $55bn over the following 4 years, Eli Lilly is investing $27bn, whereas Swiss drugmaker Novartis stated final week it could make investments $23bn in manufacturing and R&D.
Pharma bosses have written to European Fee President Ursula von der Leyen warning that Europe dangers shedding €100bn in funding and R&D spending over the following 5 years, as US tariffs and proposed EU reforms on mental property protections make the EU much less enticing.
However Eire is uniquely susceptible to any Trump motion: apart from massive pharma, it hosts the European headquarters or massive operations of US tech giants, which von der Leyen has threatened to focus on if tariff talks fail.
Tech and pharma make enormous company tax contributions which have delivered huge price range surpluses.
Botox has additionally helped Westport develop into a vibrant, bustling city of cruising festivals, eating places, motels, stylish retailers and conventional bars.
In addition to being the city’s greatest employer, the corporate has been a outstanding supporter and sponsor of native initiatives and sports activities groups. “It would be a massive loss,” in the event that they left, stated Adrian Noonan, proprietor of the Knockranny Home Resort, the city’s first four-star lodge, situated beside the manufacturing unit, who has hosted visiting executives and board conferences.
New pharma vegetation want regulatory approval, which might imply years of delay in transferring manufacturing to the US, however analysts stated executives would by then have already slammed the brakes on future funding plans in Eire.
“We’re all extremely worried,” stated Philip Heaney, a neighborhood pharmacist. “They talk about Canada being the 51st [US] state. But with pharma, we nearly are.”
