THE north’s pharmaceuticals and life sciences industries could become key drivers of economic recovery, but Brexit uncertainty continues to hang over supply chains, a new study has concluded.
Research by the Fraser of Allander Institute (FAI) at the University of Strathclyde states that Northern Ireland stands to significantly benefit in the long-term as a result of the likely re-shoring of the manufacture of important pharmaceutical products as a result of the Covid-19 pandemic.
But it warns that maintaining supply chains in the short-term, largely as a consequence of Brexit, could make it difficult for the sector to capitalize.
The end of the Brexit transition phase on December 31 2020 will see Northern Ireland continue to enforce the EU’s customs rules and stay in line with Single Market rules for some goods, including medicines.
“As inventories have been depleted during the coronavirus crisis, sourcing the raw materials required to scale up output is a pressing issue for Northern Ireland’s pharmaceutical industry,” states the report.
The study was commissioned by the Association of the British Pharmaceutical Industry (ABPI), which has previously called for clarity on how the change in rules from January 1 will impact the pharmaceuticals sector.
The FAI estimates that around 5,000 full-time equivalent (FTE) jobs are directly linked to the north’s life sciences sector.
The sector comprises all pharmaceutical industry, medicines manufacturing and healthcare activity.
But, the study found that when the wider impact is considered across the whole supply chain, life sciences is worth £1.1 billion to the Northern Ireland economy, supporting around 18,000 jobs.
Pharmaceuticals is the biggest contributor for the sector, directly employing 2,800 FTE jobs, and supporting 13,900 FTE roles in total. In terms of economic contribution, the pharmaceuticals sector is worth around £910m in gross value added (GVA) - the value of goods and services produced by a sector.
In June, Craigavon-based pharmaceuticals giant Almac announced a 72 per cent rise in pre-tax profit to £47.6m for 2019.
The FAI report concluded there is an opportunity for the pharmaceuticals sector to boost the north’s economic recovery.
But it acknowledged the level of uncertainty makes for an unclear picture.
“With both the current economic crisis resulting from a global pandemic and the ever looming end of year exit from the EU, there remains uncertainty within the pharmaceuticals sector in Northern Ireland.
“It is unclear how exactly the economy will bounce back, and in particular, what the new face of the economy may mean for pharmaceuticals.”
