Ireland’s pharmaceutical sector is a global leader in innovation, home to cutting-edge research and development (R&D) that pushes the boundaries of drug discovery, manufacturing, and clinical testing. With a rich ecosystem of multinationals and indigenous firms, the government supports innovation through generous R&D tax incentives that can significantly reduce costs and improve cash flow, particularly for companies seeking to create new, improve existing or materially alter products, processes, systems or services.
What Are R&D Tax Credits?
R&D Tax Credits allow Irish companies to claim 30% of qualifying R&D expenditure as a credit against corporation tax. This is in addition to the standard tax deduction for R&D, providing an effective tax benefit of up to 42.5%. It’s available to companies that seek to make an advance in a field of science or technology through the resolution of scientific or technological uncertainty.
How It Applies to the Pharma Industry
In the pharmaceutical sector, R&D activities are integral and span a wide range of processes, including:
Drug discovery and development: Identifying new active pharmaceutical ingredients (APIs), using hit-to-lead methods, or developing new molecular structures.
Process chemistry: Scaling synthesis for clinical and commercial production while maintaining purity and yield.
Formulation development: Testing excipients and stability of new drugs across delivery methods (e.g., inhalers, oral tablets).
Clinical trials: Phases 0 through IV are considered R&D, especially when analysing pharmacokinetics, efficacy, and safety.
Adapting to regulatory changes: Reformulating drugs to meet updated EMA or FDA requirements can qualify.
To be eligible, projects must involve technical uncertainty and a process of experimentation - common characteristics in pharma R&D.
Real Examples of Innovation in Irish Pharma
Several homegrown pharmaceutical companies exemplify the type of R&D that qualifies for tax credits:
🔬 APC (Advanced Processing Control) – This Dublin-based company specialises in process development and optimization using cutting-edge data analytics and simulation tools, reducing time-to-market for new drugs.
💊 AuriGen Medical – Though primarily a medtech firm, AuriGen integrates pharma R&D into its hybrid devices, exploring drug-device combinations for stroke prevention and atrial fibrillation treatment.
🧬 Inflazome – Acquired by Roche, this University of Dublin spin-out focused on therapies targeting inflammasome-driven diseases. Its early-stage work on small molecule inhibitors was a prime example of high-value R&D.
🌍 Shorla Oncology – Headquartered in Tipperary, this female-led company develops innovative oncology treatments for orphan and paediatric indications, engaging in drug reformulation and delivery mechanism improvements.
These firms show how targeted, innovative pharmaceutical R&D not only brings treatments to market faster but also creates eligibility for significant tax relief.
How We Can Help
At R&D Tax Solutions, we specialise in guiding pharmaceutical companies through the intricacies of the R&D tax credit scheme. Our team understands the terminology, technical boundaries, and documentation standards specific to the pharma industry. With decades of experience in accessing valuable incentives for high R&D intensity pharma companies across Europe and the UK, we're ideally placed to maximise your return-on-innovation.
Let us help you turn innovation into a strategic financial advantage. Contact us today for a free consultation.
