After Ireland’s supernova implosion 5 years ago, talk around the economy has been a lot more sober. A continuing thread in this conversation has been that The Republic’s economy needs to emulate small, successful continental countries like Finland, Denmark or Switzerland.
They have populations comparable to Ireland’s but since 1945 they’ve managed to thrive and avoid mass emigration, mass unemployment and economic collapse .
One driver in their success has been a vibrant small and middle sized business sector that exports all over the world and produces those countries’ own global corporations.
Ireland has a lot of catching up to do if it wants to match these economies but it does have a resource that they didn’t have when they were working towards economic lift off.
It has a concentration of talent, expertise and capital in the foreign Pharma and Tech multinationals here that’s unrivaled in any other small country.
In the case of the eHealth and Medical-Technology sectors, wouldn’t it makes sense to explore synergies between the pharma and life sciences corporations that have set up here and the burgeoning health technology start-up industry?
eHealth – Pharma, MedTech & Life Sciences
The pharma\biotechnology sector in this country is huge. The Irish Pharmaceutical Healthcare Association reports that in the pharmaceutical space alone, more than 120 companies have a presence in Ireland, of which 13 of the world’s top 15 companies have substantial operations and manufacture 5 of the top 12 medicines in the world here. As well as being a major source of revenue to the State, with over €3 billion paid in taxes annually, almost 25,000 people are employed directly by these companies, half of whom hold a third level qualification, while a further 25,000 depend on the provision of services to the sector for their livelihood. Some commentators argue that it’s disproportionately big and the Irish economy is over dependent on it.
According to reports in the Irish Examiner, it grew from EUR24 billion in 2000 to EUR52 billion in 2010 and in 2011 it accounted for 54% of total goods exports, or 31% of nominal GDP. Despite the pharma cliff hitting the sector in 2012 and 2013, in a separate report from Davy research, it’s rallied by increasing exports 7.3% in Q1 this year, along with almost 1,000 new jobs announced for the sector so far this year.
The Irish indigenous MedTech sector is in very rude health as well. The sector produces medical device and diagnostic products.
The whole sector in 2012 accounted for €7.9 bn of exports and employs 25,000 people. There are 250 such companies in Ireland and 50% of these are indigenous enterprises.
Medxnote, Kitman Labs, and LiScNs
They include companies like Medxnote. It markets an app that can be used with a smartphone to replicate pager services and sms messaging between hospital staff.
The Medxnote application also offers security for medical information being sent and received by health workers.
Or another Irish software developer like Kitman Labs that’s developed an application which allows athletes to manage and reduce the risk of injury that could have catastrophic consequences on their careers.
These are just two of of the scores of eHealth innovators in Dublin today. This scene is so dynamic that the city has a unique enterprise accelerator dedicated just to innovators in the health technology sector. It’s called HealthXL and we spoke about them in-depth earlier this year.
Although it’s Dublin based, the organisation has created a global network of established corporate players in the health sector and high potential start ups from all over the world.
It provides support to new health enterprises in developing their brand and marketing their product. HealthXL also hosts the Healthees, an annual award ceremony that recognises the best innovators in the global health industry. They also host a world summit for health technology entrepreneurs, this year it will be held in Dublin on the 30th May.
This is a great start but HealthXL sponsors include only 2 of the big global pharma players in Ireland, GlaxoSmithKline and Novartis. There must be more room for collaboration between the big Pharma players in Ireland and the indigenous start-ups developing software solutions in the health industry.
PJ Fitzpatrick believes that there are more areas of collaboration yet to be fully explored: he’s the founder and principle at Life Science Network Specialists (LiScNs), has extensive experience in the Life Sciences industry and has worked with the IDA as well. We spoke to PJ about potential synergies between the eHealth sector and Pharma/Biotech corporations earlier this year.
Verify Recruitment: Do you believe that there is a large gap between the pharma/bio-tech Foreign Investment firms and the eHealth start-up sector?
PJ Fitzpatrick: In the eHealth sector I do think there is a major gap between medicines companies (Pharma & Biotech) and their understanding or awareness of how incorporating eHealth services would greatly complement the benefits of the medicines particularly for chronically ill patients. Patient compliance with medicines dosage regimes are an enormous problem, the global average is approx 50% non-compliance.
Utilising currently available eHealth solutions would significantly help greatly alleviate this problem saving health service providers billions in cost directly attributed to patient non-compliance with medication dosage regimes. For example, in the USA it is estimated the cost to the economy is somewhere between $70bn – $300bn / year.
In fact I am advising on how to establish such a service for companies interested in this space.
VR: Do you believe that there are synergies between the two that haven’t been tapped yet, and if so what do you think they are?
PJ: Following on from above, I believe there are. There are services currently available which have been independently (peer reviewed and published) which clearly demonstrate the effectiveness of eHealth in helping increase patient medication compliance. Both sectors can significantly and synergistically help and complement each other.
VR: Do you envisage significant revenue generation and value-add to the local economy if the large pharma/biotech corporations become more closely involved with the Irish eHealth enterprise sector?
PJ: I do indeed believe there is significant value add for the local economy if the synergy referred to above was recognised and tapped. Ireland could be an international centre of excellence for eHealth services delivery and such services could be established very quickly with relatively little funding (<€1m) and create several hundreds of jobs within 2 years.
VR: Do you think eHealth entrepreneurs resist involvement of the big pharma corporations in their operations due to anxiety about maintaining independence?
PJ: In my opinion I think there is a mix. My estimate would be the majority of entrepreneurs are very happy to have the involvement of big pharma/biotech while maintaining independence as far as possible.
Association with this sector provides the credibility necessary, particularly when dealing with chronically ill patients and helps develop the business in international markets.
VR: In your opinion do the big pharmaceutical companies see the health tech start-ups as competition to some of their own R&D arms?
PJ: In my opinion big Pharma/Biotech see eHealth start-ups as complementary to their R&D efforts and as a key element of the R&D ecosystem. In fact the natural cycle of such health tech start ups, if successful, is to be bought by / partner with big Pharma/Biotech companies.
VR: Most new eHealth enterprises are SaaS or cloud based operations. In your opinion do the big pharma/biotech corporations leverage as much from cloud technology as the start-ups?
PJ: In my opinion no, big Pharma/Biotech seem to view an online presence i.e. a web site that provides/collects information but not very interactively as equivalent to “cloud” technology, of course this is a small element of such technology. The key challenge is getting the market to engage with the technology in a mutually beneficial way and this will not be achieved by simply providing technology alone.
The companies and people (patients/non patients) need to be educated on how best to utilise technology to help them lead more healthy lives. As I mentioned earlier, developing such eHealth services is something I am advising on.
PJ’s company LiScNs helps bring technology entrepreneurs, investors, industry leaders and researchers together. As well as offering a range of services including project management, business development, technology assessment and funding/tender submissions.
Ireland is trying to rebuild its economy by exporting to the world market and attracting inward investment. This has accelerated the growth of new industries and technologies, however it is well worth looking at synergies between different parts of the Irish economy and potential internal markets. And that wonderful German word ‘Gestalt’ comes to mind, meaning the whole is greater than the sum of its parts. It makes sense really – the total size of the Irish economy is greater than the sum of its parts.
Note: We would like to thank PJ for his time and contribution in helping us with this article. PJ has International experience at senior level in research & development, knowledge / technology transfer, operational excellence, project management, strategy, business analysis and business development acquired while working in various roles with some of the world’s leading Life Science organisations such as Medical Research Council, Astra Zeneca, Pfizer, Amgen in the UK, Ireland and North America. You can find more details on his website.