IF YOU want to see how much US big pharma has changed Ireland, a quick look at the newspapers of the 1960s and 1970s provides an interesting insight.
So too do the ‘then and now’ photos of places like Ringaskiddy and Kinsale, which have now benefited from more than half a century of constant US pharmaceutical investment.
When Pfizer first came to Ireland in September 1968, Donald Trump had just graduated from the Wharton School of Business at the University of Pennsylvania.
‘I’m going to be the king of New York real estate,’ a fresh-faced and mophaired Trump famously told his college lecturer back then.
Trump’s legendary ascent took place as Ireland – an economically crippled backwater back then – slowly began to create its own legendary status.
Today, Ireland is infamous for its miraculous economic transformation on the back of its US Foreign Direct Investment (FDI) strategy. Now Trump has just become its biggest threat.
While Donald Trump was turning up for his Ivy League college lectures in his green Ford Fairlane convertible, Ireland’s minister for industry and commerce, George Colley, had his eye on a different prize.
Together with the Industrial Development Authority (IDA), Mr Colley was striking a deal with Pfizer. It was perhaps no accident – and certainly no harm – that the then Pfizer president, John J Powers, was Irish. The deal, announced in a press conference at Dublin’s Gresham Hotel, made the front pages of the national papers.
It involved a simple transaction: Ireland provided as many grants as possible, agreed to build a wide new access road into Ringaskiddy – and promised new legislation to ensure Pfizer and other US firms could benefit from 100% export tax breaks.
On the day of the press conference, Mr Colley was tight-lipped about how much in grants Pfizer had received. When asked by reporters, he said he was not legally permitted to disclose the amount. But he gave a clue. ‘It is quite substantial, the largest ever given, in fact,’ he said.
Today, over five decades later, Pfizer has invested over $9bn in Ireland and employs more than 5,000 staff.
The Pfizer deal was not the first such arrangement with a US pharmaceutical company.
Johnson & Johnson first established a presence in Ireland in 1935 and today employs 6,000 people here.
But the Pfizer deal cemented an approach that every government since then has stuck to.
Along the way, the original export tax exemptions – aimed at simply securing jobs for Ireland – morphed into low corporate tax rates and other tax-based incentives. In tandem with this, the benefit to Ireland switched from solely job creation and stemming the tide of emigration to huge corporation tax takes beyond anyone’s expectation.
This tax in excess of what we could expect without FDI has a name in the Department of Finance. They refer to it as the ‘froth’.
The Irish Fiscal Advisory Council (IFAC), our budget watchdog, has another term. They call it ‘Ireland’s own oil wealth’.
To put the size of this FDI boom in perspective, the IFAC estimated in 2022 that Ireland could have received as much as €31bn since 2015 in excess corporation taxes thanks to FDI.
This remarkable wealth stream, the IFAC warned, is ‘volatile, difficult to forecast, somewhat removed from other activities, and subject to potential reversals in future’.
Cue Donald Trump and his threatened tariffs, due to commence on April 2. This week we learned from the Economic and Social Research Institute (ESRI) that the threatened US tariffs could cost Ireland more than €18bn in lost trade.
Throughout Ireland there are once rural and isolated pockets of the landscape that have been utterly transformed – together with the entire nation’s economy – by US FDI. Now they are bracing for the unknown and hoping for the best.
In 1968, Ringaskiddy was described on the front page of the Cork Examiner as being affected by a ‘cankerous apathy’ spurred on by emigration of ‘the young folk of working age’.
‘A lot of young people went to England for jobs,’ a local vintner told the paper. ‘We hope the new chemical plant will see many more returning.’
Photos from the time show Ballybricken House – a period home on the land bought by Pfizer – amid empty country fields overlooking Cork Harbour.
Razed to make way for the Pfizer plant, the house was once frequented by Captain Frederick Maitland – the British Royal Navy captain who accepted the surrender of Napoleon. (Captain Maitland married a daughter of the owner.)
Today this location, once famed for its genteel society tea parties in the countryside overlooking Cork Harbour, is a mammoth collection of industrial buildings made famous by Viagra.
A similar transformation has taken place 25km away in Kinsale. In 1975, US firm Eli Lilly first secured an option to buy 107 acres of land from local farmer John Sweetman.
Today that site, at Dunderrow Cross, has a footprint approaching the size of the entire town of Kinsale. Spurred on by the success of its blockbuster weight-loss drug Mounjaro, Eli Lilly’s Irish operations have not stopped expanding since the very beginning.
Today, with further operations at Little Island and in Limerick, the firm employs more than 3,500.
Kinsale without Lilly – as the locals fondly refer to the firm – would be still no more than the quaint, seasonal tourist destination it once was.
Officially, no one at Lilly or Pfizer wants to speak about Trump and his tariff threats – though he is on everyone’s mind. For any firm in Trump’s sights, it would be foolish to utter a word.
Instead, everyone is hunched in the trenches waiting to see whether what materialises next is a temporary barrage of mortar fire or an intercontinental ballistic missile.
‘I have nothing to say on that at all,’ the Pfizer press operation in Ireland told the MoS this week when we asked about Trump’s tariffs.
Eli Lilly in turn provided a bland holding statement.
‘Lilly is an American company with a global presence. This continues to be an evolving situation that we’re watching closely,’ a spokesman said.
But local representatives around Kinsale are happy to speak. One of them, Independent Cork County Councillor Alan Coleman, was struck by how many Eli Lily retirees he encountered while canvassing for the last election.
‘You nearly meet as many Lilly pensioners now as Lilly workers in the area. It’s been around that long,’ he said.
‘It is a big site,’ he said of Lilly’s Dunderrow plant. ‘It’s almost a continuous building site for the last 15 years.’
Mr Coleman thinks Trump’s popularity will eventually tank but the talk in the pubs of Kinsale is about how much damage he might inflict in the meantime.
‘You couldn’t exaggerate how important Lilly it is to the location,’ said Mr Coleman. ‘It would be a huge hit,’ he said of the possibility of tariffs causing Lilly to rethink its Irish plans.
‘A hit to Lilly will be a big hit to this area. There’s no doubt about it. It’s by far the biggest and strongest employer?So we don’t take it for granted.
‘The level of pay, the security, there’s nothing to match it. The number of spin-offs that local businesses are getting out of Lilly is a big thing. It’s not just those who are employed there. There are subcontractors in there constantly.’
However, the hope locally is that Lilly and Kinsale will be able to sit tight and ride out the storm.
‘My sense is they’re going to ride this one out,’ predicted Mr Coleman.
‘The political cycle is quite short, I suppose, by comparison to the type of cycles they work on in firms like Lilly. That would be my kind of thinking anyway. Maybe I’m whistling in the wind.’
One advantage, Mr Coleman believes, is how entrenched Lilly has become in Ireland.
‘It’s not about just producing the blue tablet. There are elements in Dunderrow involved in the research side of things so they have themselves very much stitched into the fabric of Lilly international.’
Another hope involves the many Irish employees who have risen up to management level in the global firm.
‘Over the last 50 years a lot of the Irish workforce who moved into management positions in Lily worked abroad with Lilly in the States, in particular, and in Europe as well,’ Mr Coleman said. ‘They got themselves into pretty influential positions.
‘When Lilly start making decisions I suppose we always think of a boardroom somewhere in the States, and Ireland is just a dot on the map, but a lot of those Irish people have influence within Lilly and that’s been important to us as well.’
So for now, Mr Coleman says there’s no cause for panic: ‘There seems to be no level of panic or retrenchment.
‘If anything there is talk about another major expansion in the year and I’ve heard nothing about that being shelved.
‘What I gather now, looking from the outside in, is that they’re still driving onward investment.
‘That plant does open Lilly up to a market of over 320 million in Europe, which is very important to them.’
That’s not to say Trump will care an ounce. But in another 50 years’ time, the people of Ringaskiddy and Kinsalehope his impact will be a forgotten blip in history.
And they will get a sense if that is going to be the case soon enough.
