To be or not to be – that is the question; concerning US president Donald Trump’s tariff threats, that is. He has promised to target Ireland as part of his de facto trade war and recent months have been a rollercoaster as the “will he, won’t he” speculation continues, especially in relation to pharmaceutical product tariffs.
Originally suggesting a 20-25 per cent tariff, his most recent threat of a 50 per cent tariff on all pharmaceutical products from the European Union would hit Ireland’s manufacturing sector the hardest – some insiders have warned that the impact could be “catastrophic”, leading to a marked reduction in investment, possible redundancies within the sector and even supply chain disruptions.
What would be the real impact on the pharmaceutical industry in Ireland – one that has been steadily growing since the 1950s – if Trump’s tariffs were imposed? Would it prompt a mass exodus across the Atlantic, or is the industry too deeply entrenched here and too entwined in complex global supply chains to make such a shift both improbable and impractical?
Our heavy reliance on multinational pharmaceutical companies cannot be overstated. The most recent data from the Central Statistics Office showed that exports of medical and pharmaceutical products represented almost two-thirds of total exports in March this year. Exports of these products rose by €16.7 billion to €23.6 billion in March 2025 compared with March 2024, an increase of 243 per cent.
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It was reported in May that Tánaiste Simon Harris had penned a letter to the US commerce secretary Howard Lutnick, stressing the importance of the transatlantic trade and investment relationship, saying it had evolved into a “mutually advantageous economic bilateral relationship”.
Pharmaceutical companies have a “significant and long-standing presence” mutually reinforcing, wrote Harris, adding that: “Supply chains that underpin the trade between Ireland and the US have been built up over decades, supported by the existing zero-for-zero tariff arrangement.”
For now, uncertainty may prevail, but stakeholders on both sides of the Atlantic are desperately hoping that dire predictions by pharma industry insiders do not come true. The Irish Times reported back in May that the State could lose up to a quarter of its pharmaceutical manufacturing capacity and up to €100 billion in investment over the next five years if Trump can manage to press ahead with his vows to drag pharma manufacturing back to the US. “There are a load of ifs and buts, but there is no doubt that the current uncertainty is not good for Ireland,” said one industry figure.
On the record, representatives from Ireland’s many multinational pharmaceutical companies are more circumspect – in fact, it was difficult to persuade any to comment directly for this article. The Irish Pharmaceutical Healthcare Association (IPHA), which represents the research-led pharmaceutical industry here, including many of the US-headquartered behemoths, has been vocal about the multifaceted problems any tariff introduction could cause. Eimear O’Leary, director of communications and advocacy for IPHA, is adamant that tariffs of any kind would be “high-risk” for Ireland.
“Tariffs would cause significant disruption to future plans for the industry in Ireland and across the EU due to the commercial challenges they would create,” she says. “Any tariffs, inwards or outwards from the US, would require companies to reassess their manufacturing capacity in the EU, which has been built up over many years.”
The threat of tariffs has also served to further galvanise industry concerns that the EU does not go far enough in protecting innovation. “It is important that ... the EU enhances competitiveness and further supports intellectual property rights and R&D, as highlighted in the Draghi Report published last year,” O’Leary says. “Ensuring policy coherence across environmental and chemical legislation to secure a resilient manufacturing and supply chain of medicines in Europe is also required.”
She adds that the pharmaceutical industry in Ireland is already working with policymakers on this.
Some sources are less concerned, noting the historic resilience of big pharma. A recent report by S&P Global suggested that most global pharmaceutical companies can easily withstand pricing pressures and additional trade duties – it also points out that many of the more worrying and radical policies floated by Trump are unlikely to transpire.
Matt Moran is an independent consultant for the life sciences industry but spent many years as director of BioPharmaChem Ireland. The worst-case scenario of a “mass exodus” of our pharmaceutical manufacturing is realistically “very unlikely”, he believes.
“Not only are supply chains far too complex to be disrupted in the short term, it’s also worth remembering that any change of this nature would be subject to fairly intense regulatory oversight, which of course takes time,” he says.
The other factor to consider is the time it will take to build the necessary capacity for pharmaceutical manufacturers back in the US. “The accepted timeline for putting in place approved capacity, especially when new capital investment is required, is about five years,” he notes. The requisite skills to deliver the volume of products – skills that Ireland has spent years honing – may also be thin on the ground in most US states, Moran adds.
“Having said that, there has been a flurry of announcements by pharma to invest in capital in the US to service that market, and I think around $200 billion has been committed so far.”
Although he points out that it is difficult to determine how much of this had been planned previously.
Trump indeed finds himself out on something of a limb, with the necessary support for his “most favoured nation pricing” slow to come on stream. “The US international trade court ruling and subsequent stays and appeals will take some time to work themselves out,” says Colin Kavanagh, head of life sciences with legal firm Arthur Cox. “The uncertainty around these issues is unhelpful, but I don’t see the industry in Ireland or globally taking any material steps until the situation is clear.
Trade negotiations are going on in the background and the section 232 investigation/public consultation process initiated in April by the US department of commerce on the industry generally, including areas such as supply chains, pricing, subsidies, export issues, and so on, could take months to complete, he points out. “Meanwhile, it is business as usual in Ireland.”
Kavanagh believes the ongoing uncertainty may mean that new pharma investment in Ireland may stall for a while. “But, in the medium term, smaller biotech businesses that historically would have manufactured all of their products in the US may need to consider ex-US manufacturing if tariffs are imposed. What better place than Ireland to do that?”
According to Johanna McLoughlin, EY Ireland consulting partner and life sciences sector lead, supply chain resilience is a key consideration alongside traceability and co-location strategies when it comes to manufacturing bases.
“This provides the Irish sites, with their strong reputation of compliance, flexibility and transparency, with a unique opportunity to pivot,” she says. “Irish sites manufacture complex products, with €13 billion capital invested to date, in full compliance with stringent FDA standards – that is neither easy to replicate nor quick to move.”
But although uncertainty reigns, companies need to understand their level of exposure, McLoughlin says. “Scenario planning is paramount.”
Whatever happens, US multinational pharma companies will continue to be a mainstay on our shores – and a significant contributor to our exchequer. “These are global companies who will need to maintain a global presence,” Moran advises. “Even if they switched all their US capacity to mainland US, they will still need to retain capacity elsewhere as they all like to pursue dual source capacity strategies.”
But Moran says the pharmaceutical industry here finds itself at an “inflection point” and must take the time to prepare for its next era. “There is an urgent need for the Government to publish a comprehensive life sciences strategy, as promised in the programme for government, and this needs to address the need for ongoing investment in talent and also to broaden the innovative capacity of the sector by investing more in R & D and clinical research. Ireland should also take this opportunity to kick-start more indigenous companies and flesh out the broader life sciences ecosystem.”
