1. The Pharmaceutical Sector in Ireland SSDC Chemical Industry Plenary Meeting 9 th April 2013 Eurofound Dublin

2. Pharma Sector in Ireland  One of the premier global locations for pharmaceutical and chemical product manufacture  Nine of top ten global pharma companies have a facility in Ireland  Exports of €55.1bn* = 50% of total value of Irish exports  Contribution of €1bn in corporation tax to the state  Sector employs 50,000 people directly and indirectly  Ireland is the second largest development and manufacturing location in the world for biopharmaceuticals  Largest net exporter of medicines in the world * CSO - 2011

3. Challenges  Patent expiry – expected loss of $29bn in 2013*  Global over-capacity – 300,000 jobs cut since 2000*  Significant R&D costs – global R&D funding by large pharma to drop by 5.7% in 2012**  Product failure at late stage clinical trials  Declining pipelines  Downward pressure on healthcare costs due to budget pressures  Cost optimisation * Deloitte 2013**Forbes 2011

4. Opportunities  Talent – Highly skilled Irish workforce critical to the success of the sector. Global functions based out of Ireland increasing year on year  Taxation – 12.5% corporation tax rate in addition to 25% R&D tax credit  Compliance – Global quality standards falling while remaining very high in Ireland  OPEX – Irish sites accruing huge benefits from optimisation of OPEX best practice  D&M – Development plus Manufacturing model

5. Workforce  Direct employment has grown from 5200 in 1988 to 24,000 in 2012 (additional 24,500 employed providing services)  50% of employees have a university qualification  Exemplary compliance record – no warning letters have been issued to any Irish facility in last 10 years  Proven track record of manufacturing excellence  Strong local management (with global functions)  Flexible and adaptable workforce

6. Broader environment  Irish economy has stabilised with GDP growth of 0.9% in 2012  85% of austerity has been delivered  Substantial improvement in unit labour costs  Private sector protocol renewed to end 2013  39% of firms planning increase to basic pay in 2013* However:  Pensions – 90% of DB plans in deficit  Health Insurance costs increasing year on year *IBEC Study Q4 2012

7. The future is now  Focus is to sustain and create jobs  Talent development of a flexible workforce willing to embrace and facilitate change–key to delivering economic recovery and growth  Highly efficient, cost – effective manufacturing employing fully optimised operational excellence  Irish site - Site of choice for all new entities to market  Strong collaboration between industry partners  Industry working in close collaboration with government and academia