Ciara O’Herlihy

Ireland’s life sciences sector is a remarkable national achievement. More than 100,000 people work in biopharmaceuticals and medical technology, in communities from Galway to Cork and Sligo to Waterford. Together these industries export well over €100 billion a year. 13 of the world’s top 15 biopharma companies have significant operations here, alongside more than 550 medtech firms. It is a success story built on decades of smart policy, sustained and nimble investment and genuine partnership between government and industry - but it is also one that cannot be taken for granted. Budget 2027 is an opportunity to strengthen that partnership and ensure Ireland remains a destination of choice for life sciences investment.

Evolving our innovation supports

The increase of the R&D tax credit rate to 35 per cent was welcome, but its design has not kept pace with how industry now innovates. Modern life sciences R&D is collaborative, international and data-driven, yet the credit does not adequately support outsourced or collaborative R&D work. That is a significant limitation in a small, open economy where much research cannot feasibly be completed in-house or in-country. Removing the cap on outsourced R&D spend and making related-party activities eligible where the Irish entity is the principal IP owner would anchor high-value strategic R&D roles and lasting economic substance in Ireland. There is also a strong case for a dedicated innovation tax credit for advanced manufacturing, AI adoption and sustainable production, ensuring Ireland remains at the forefront of the digital and green transition reshaping the sector.

Strengthening our clinical trials ecosystem

Ireland accounts for a disproportionately small share of EU clinical trial activity and trial start-up timelines have historically been among the slowest in Europe. For example, in oncology - an area of enormous global R&D investment - Ireland has amongst the lowest number of newly opened trials among EU Member States. The National Clinical Trials Oversight Group has set out a clear blueprint for reform - spanning streamlined start-up processes, standardised contracts and costings, stronger patient engagement, workforce development and the adoption of digital and AI-enabled technologies. A National Clinical Trials Competitiveness Initiative in Budget 2027 targeting a leading European position by 2030 would be a powerful statement of ambition and align Ireland with wider European efforts to strengthen clinical research competitiveness.

Unlocking skills and addressing energy costs

Ireland’s workforce is one of our greatest competitive advantages, but the demands on it are changing rapidly. AI, digital health, advanced therapies and next-generation manufacturing all require new capabilities. Only 7 per cent of business leaders report their workforce as “very skilled” in AI, while hybrid talent—individuals combining technical expertise with regulatory or clinical knowledge — remains scarce. Deploying a portion of the National Training Fund’s €2 billion surplus through industry-led training programmes would equip workers with the skills the sector needs and strengthen Ireland’s position for future capital investment decisions.

Energy costs remain a significant burden for an industry that operates sterile cleanrooms and continuous high-precision production that cannot simply be powered down. Further incentivising investment in green technologies, alongside accelerated delivery of grid, water and housing infrastructure, would help protect the manufacturing base that underpins the sector.

Nurturing indigenous innovation

Only a small proportion of Ireland’s life sciences industry is indigenous. Ireland lags behind peers such as Belgium, Denmark and the Netherlands in bio-tech start-ups, in part because the pre-commercialisation “valley of death” is particularly acute in life sciences, where the journey from lab to market is longer and more capital-intensive than other sectors. Tax and funding frameworks - including CGT reform, Entrepreneur Relief, EIIS and KEEP - should support the journey from start-up to scale-up and recognise that high-growth companies often require multiple rounds of external investment.

Delivering a National Life Sciences Strategy

Ireland’s first National Life Sciences Strategy is among the most significant developments on the horizon, with public consultation revealing strong support for a dedicated, permanently resourced Office of Life Sciences — drawing on successful models already in place in the UK and Sweden.

As the Strategy takes shape, two priorities stand out. First, reimbursement reform. The consultation has highlighted the sector’s so-called innovation “paradox”: Ireland is a world leader in manufacturing life-changing therapies, but we are frequently slow to reimburse them for Irish patients. Ensuring innovative medicines reach patients quickly is both a healthcare and competitiveness imperative. Second, the digitisation of health data: implementation of a national electronic health record is critical to patient care, clinical research, AI-enabled innovation and Ireland’s obligations under the European Health Data Space.

The EU’s ‘Choose Europe for Life Sciences’ framework provides a powerful tailwind. With Ireland’s Presidency of the EU Council, there is a unique opportunity to lead on clinical trial reform, regulatory simplification and digital health - positioning Ireland within Europe’s competitiveness agenda and bolstering this critical pillar of our domestic economy.

A shared ambition

Ireland’s position as a global life sciences leader reflects the best of what can be achieved when government, industry, academia and the health system work together. Budget 2027 is a chance to renew that partnership with conviction - investing in supports that will sustain high-value jobs across every region, bring life-changing therapies to patients sooner and secure a pillar of Ireland’s long-term prosperity.

Ciara O’Herlihy is a partner and co-chair of the Life Sciences Group at McCann FitzGerald