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Foreign investment in Ireland's pharmaceutical sector has gone
from strength to strength in 2019. With major new
multi-billion-dollar investment projects lined-up and the expansion
of existing manufacturing facilities rolling in, the IDA
development agency has reason to be pleased, as well as confident
for the outlook in 2020. But there is an environmental cost to this
level of inward investment, which pharmaceutical companies and
Irish policymakers are increasingly mindful of. Topping the policy
agenda is industry's requirement for a new largescale public
investment program to curtail the sector's cost of doing business
in Ireland in the context of having to export hazardous waste.
Public investment to improve pharma waste systems in Ireland are
increasingly seen as a key component in winning foreign direct
investment from the pharmaceutical sector. Takeda (Japan)'s chief
executive Christophe Weber recently raised the profile of waste
treatment spending on behalf of the pharmaceutical industry when he
claimed that the creation of an enhanced domestic capability could
secure "big competitive advantages" for Ireland. Doing more waste
management locally, rather than relying on shipping waste overseas
to countries that are exposed to increased sensitivity over
contamination, offers a potential win-win opportunity for the
pharma-sector and the green-lobby.
More efficient production methods in the Irish pharma sector
have led to a decrease in waste material treated on the site where
it is generated. Analysis of data published by the
Environmental Protection Agency (EPA) reveals that there was a
5.9% annual reduction in on-site treatment at licensed EPA
industrial facilities to 34,114 tons of hazardous waste in 2017.
This covers all industrial sectors, not just pharmaceutical
manufactures and does not include solvent-based chemistry in the
biopharma industry which can be reclaimed on-site and regenerated
to re-enter the industrial process.
Domestic hazardous waste treatment facilities handled a further
86,909 tons, up 24.5% year-on-year. However, despite these positive
indicators, the amount of industrial waste Ireland exports abroad
continues to rise at double-digit rates. The EPA notes that in 2017
total exports of hazardous waste across all industry sectors -
including chemicals and medical waste which Ireland does not have
the facilities to fully dispose of - amounted to 213,089 tons. This
equates to an annual increase of 14.6% and followed growth of 11.9%
and 17.7% in previous years. About 48.8% of hazardous waste
produced in Ireland is therefore exported abroad for treatment. The
pharma sector is by no means the only manufacturing industry to
contribute to this controversial statistic. But pharma has a
critical mass in the Irish economy, and the EPA data paints a
picture of rapidly increasing waste generation and export.
Export costs are borne directly by manufactures in Ireland. This
bottom-line encourages industry leaders to speak out more
forcefully in favor of the government prioritizing self-sufficiency
nationally as a guiding policy principle, not only on the
legitimate grounds that this is the most preferable course of
action from an environmental perspective but also from
manufacturer's economic point of view.
Another rationale for increasing Ireland's level of capacity for
self-sufficiency with regard to the treatment and management of
hazardous waste generated by pharmaceutical industry is that the
United Kingdom is by far the largest recipient of pharmaceutical
sector waste exported from Ireland; a total of 30.7% of overall
hazardous waste is exported to the UK mainland and 6.5% to UK
region of Northern Ireland. The Netherlands (20.8%), Germany
(18.3%) and Belgium (13.7%) absorb about 52.8% combined. This
reliance on Ireland's nearest neighbor for incineration and
disposal facilities may pose a long-term problem in the context of
the UKs impending departure from the European Union (EU).
Substantial policy attention has been paid to the negative impact
on trade flow of finished medicine products and active
pharmaceutical ingredients back-and-forth across the Irish and UK
borders. Less consideration has been given to the risk that trade
disruption caused by a disorderly UK exit from the EU could have on
the export of pharma industry waste material for treatment outside
Ireland.
To a certain extent Ireland is an outlier in an EU context when
it comes to managing pharmaceutical industry waste. On the one
hand, it produces less hazardous waste per capita overall than the
EU average. At the same time, the country lacks the infrastructure
to fully treat hazardous waste and is forced to export a
disproportionately large share to other EU countries and the UK.
This trend is not just a problem of under-investment and
unfulfilled policy goals by consecutive governments. It also
reflects Ireland's long history of local political and planning
opposition to the construction of waste management capacities
(especially incineration facilities), a large number of which would
be necessary if Ireland intended to manage all pharmaceutical waste
in-country. The preference for shipping the bulk of pharmaceutical
waste exports overseas does appear to be waning amid the growing
importance of "green" issues in the public consciousness. However,
Ireland has a poor track record of delivering largescale
infrastructure projects. The process of securing planning
permission is often notoriously lengthy and local opposition to
controversial infrastructure has derailed entirely or added
significantly to cost of construction. This is still a feature of
the Irish landscape and is certain to hinder Takeda and the wider
pharmaceutical industry's attempts to persuade government ministers
to pile new investment into this policy area. Given the
government's current low-ebb politically and larger strategic
problems on the horizon, such as the UK's departure from the EU
bloc, neither the current minority Fine Gael administration nor
opposition political parties are likely to take up the policy
gauntlet of better pharmaceutical waste management and the
reduction of waste exports at the next 2021 election.
Posted 02 August 2019 by Eoin Ryan, Senior Analyst