EU Critical Medicines Act a milestone in efforts to enhance supply chain resilience

The initiative is part of the broader European Health Union strategy, which seeks to ensure that all EU citizens have access to essential medicines, particularly in times of crisis.

Publication of the proposals follows significant challenges related to medicine shortages across the EU in recent years, exacerbated by global events such as the Covid-19 pandemic. These shortages have been primarily driven by manufacturing issues, supply chain vulnerabilities, and intense global competition for resources. The Act aims to tackle these problems head-on by bolstering the EU’s manufacturing capacity and ensuring a stable supply of critical medicines.

Arjan Reijns, life sciences and health specialist at Pinsent Masons, said: “This development fits in well with other recent developments aimed at promoting and improving on EU manufacturing capability.”

The Act introduces several important measures designed to enhance the resilience of the EU’s pharmaceutical supply chain. For instance, it designates certain projects are strategic, providing them with easier access to funding and fast-tracked regulatory procedures. These projects focus on the production of critical medicines and their ingredients, ensuring that the EU can maintain a steady supply.

To incentivise the resilience of supply chains, the Act supports public procurement initiatives. These initiatives aim to secure reliable supply chains for critical medicines and improve access to other essential medicines, such as those for rare diseases. It also encourages collaborative procurement amongst EU member states in order to address disparities in the availability and access to medicines. Further, the Act promotes the exploration of international partnerships with like-minded countries and regions in a bid to broaden the supply chain and reduce dependencies on single supplies, thereby enhancing the EU’s pharmaceutical resilience.

Reijns said: “The Commission’s support of collaborative procurement is likely to improve the EU’s buyside leverage. Demands, such as diversified supply chains, can make a meaningful change in the reliability of supply, as long as a market remains for healthy competition on the supply side.”

To support strategic projects, the Act includes guidelines to assist member states in providing the necessary financial backing for projects that are crucial to the EU’s pharmaceutical supply chain in a way that adheres to EU state aid rules.

Charlotte Weekes, life sciences expert at Pinsent Masons, said: “One thing medicines suppliers will want to see is provision to avoid stockpiled medicines going to waste if they are not required, which hopefully they will not be for crisis situations.”

This is the first major health file of the new Commission and has been delivered within the 100 day self-imposed deadline set by health commissioner, Olivér Várhelyi. This is just the beginning of the legislative process with it now heading for scrutiny in the European Parliament and among member states.

Mark Ferguson, public policy expert at Pinsent Masons, said: “The legislation has been in the works for almost 18 months. Given the range of views on the issue, it is likely that the final text of the legislation will look markedly different from where we are now. For this reason, businesses with an interest in the legislation should be monitoring the files progress closely, mapping the policymakers likely to be involved in the ongoing talks, and developing a clear understanding of the impact it could have on their operations and what they would like to see from the legislation.”

It is proposed that the European Medicines Agency (EMA), in collaboration with national authorities, will oversee the implementation of the Critical Medicines Act.