The imposition of a 15 per cent tariff on European pharma exports to the US, while not ideal, was greeted with a collective sigh of relief on this side of the Atlantic, with a realisation that the outcome could have been much worse.
The hope now is in the pharma industry is that any action taken on the US side on foot of the Section 232 investigation for the pharma sector respects this 15 per cent cap.
“Our immediate focus is securing the current EU-US trade agreement while upholding this limit,” says Sinead Keogh, director of BioPharmaChem Ireland.
“This stability is the much-needed foundation to provide predictability for industry and investment on both sides of the Atlantic. While fully implementing the agreed EU-US framework agreement, we should continue to work to expand product exemptions to safeguard the global supply of life-saving medicines.”
READ MORE
The importance of the tariff agreement is underlined by the results of the latest BioPharmaChem Manufacturing Survey which reveal that 75 per cent of biopharma businesses in Ireland expect to be directly or indirectly impacted by US tariffs. This impact is manifest in real-time investment decisions, with some companies stating that there has been delayed capital investment and uncertainty over the location of choice for the manufacture of some new products.
Irish life sciences will need to increase efficiency to offset costs imposed under the new tariffs, according to Rhonda Doyle, country president, Schneider Electric Ireland. High energy prices exacerbate the challenge.
“Ireland already pays a premium for its energy. EU electricity prices are some two to three times higher compared to the US and China – no wonder half (46 per cent) of Irish as well as UK businesses see energy security and resilience as a major risk. For energy intensive industries like life sciences and pharmaceuticals, the opportunity is ripe to decarbonise operations. The cheapest energy is the energy that you don’t use.”
Aidan Meagher, EY Ireland life sciences tax and law lead and co-head of geopolitical strategy notes that while this year has proven to be a challenging period of geopolitical upheaval and uncertainty, the sector is facing into 2026 and beyond with confidence.
“Ireland is home to the production of many of the world’s most important drugs, we have world-class talent involved at every stage, from development to production and packaging, and the changes to Ireland’s R&D tax credit scheme should boost our global competitiveness,” he says.
“However, to maintain our global competitiveness and ensure Ireland secures the next wave of pharma investment, we cannot stand still. We need a renewed focus on cost competitiveness, an accelerated pace of infrastructure delivery – especially around water, energy and housing – and to constantly assess and benchmark our innovation incentives, to ensure we are offering the right levels of support to enable the development and manufacturing of the next generation of blockbuster drugs here in Ireland.”
Keogh says the industry needs to take a multipronged approach to ensure it remains competitive, and notes that the Republic’s forthcoming presidency of the EU Council offers a unique chance to further our agenda.
“We must prioritise policy interventions available at both national and EU levels to control our own destiny,” she says. “By simplifying regulatory policy, fostering industry-ready talent and upgrading energy and infrastructure, we can create the competitive domestic environment needed for a diverse and robust industrial base.
“Ireland’s presidency of the Council of the European Union in late 2026 is a unique opportunity to strategically shape the EU’s agenda on regulatory alignment and simplification, innovation and competitiveness at a time when Irish influence can truly determine the council’s policy direction.
“A key priority for the presidency is enabling innovation, and a stable and predictable legislative environment is necessary to create conditions for long-term investments in EU innovation. The upcoming EU Life Sciences Strategy and corresponding policy must establish this stable environment to enhance the competitiveness of this sector.”
