Ireland needs to create a supply chain and services hub for the pharmaceutical industry if it is to remain a global player, according to John Kelly, a partner at PwC. He said establishing a supply chain will create jobs and provide a low tax counterweight to offset the rising tax burden on profits in end markets.

A survey by PwC, seen exclusively by the Sunday Tribune, shows that effective tax rates for the global pharmaceutical industry are likely to rise. The report states that the global financial crisis, government pressure and changing market dynamics for an industry experiencing significant change coupled with evolving healthcare reforms are likely to drive up the tax rate.

Sixty per cent of those surveyed agreed that an increase in the effective tax rate for the pharmaceutical and life sciences industry is inevitable.

This is likely to result in higher prices for consumers.

The PwC survey found that 62% of tax executives are looking to maximise tax credits and other incentives for research and development. Kelly said "tax planning will be a critical consideration, not an afterthought of long-term business plans to grow, buy, merge or sell".