U.S. Medtech Firms Investing Ireland, But is it Result of Device Tax Burden?

In mid September, Medtronic announced that the device maker was opening a new Customer Innovation Centre in Galway, Ireland, to encourage greater collaboration between its engineers and the Irish physician base.

The goal would be to encourage development of new therapies to improve clinical outcomes, patient access while at the same time provide greater economic value to the overall healthcare system.

Medtronic spent $10 million in this new state-of-the-art facility and received a grant from IDA Ireland, an economic development and grant-making organization charged with attracting foreign investment in the island nation. IDA Ireland has been in existence since 1949.

"Medtronic is a global leader in the development of medical devices," said IDA Ireland CEO Barry O' Leary in a Medtronic news release. "Their new Customer Innovation Centre is hugely important in terms of positioning Ireland internationally as a centre of excellence for innovation and R&D in the Medical Technology space. The choice of Galway as the location of this strategically important centre for Medtronic is a significant endorsement of Ireland's business environment and talented workforce."

IDA Ireland's Ivan Houlihan, vice president at the organization and based in Boston, said that large medtech companies have been investing more in Ireland in recent years.

But is this happening because of the device tax? Cook Medical, which has been an unabashed protester of the tax, has declared the device tax would force them to suspend growth plans in the U.S. and focus growth internationally. So, is IDA Ireland benefitting from the burden of the device tax.

"I can't say that I have seen that yet and besides [the effect of the device tax] would be hard to measure," he said in an interview at the AdvaMed annual medtech conference last week in Washington, D.C. "We have seen more investment from companies in the last two years than in the previous 10 as costs have come down because of the slowdown in Ireland. These companies are investing in Ireland because they need to diversify and need a base in Europe. It also guarantees their supply and allows them to be close to the customers they serve in Europe." 

Consider Ireland as a top-notch medtech destination not just because of the tax breaks it offers, Houlihan added, but also because of its skilled workforce and proximity to rest of Europe, which still continues to be the second-largest market for medical devices. 

[Photo Credit: iStockPhoto.com user JacobH]

-- By Arundhati Parmar, Senior Editor, MD+DI
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