EU agrees medicines stockpiling law to prevent repeat of pandemic shortages

Critical Medicines Act to incentivise domestic production but likely to push up costs for already-strained health systems

EU member states have agreed to stockpile essential medicines and subsidise domestic production of key drugs in an effort to end persistent shortages and reduce dependence on imports from China and India.

Legislators and governments reached agreement on a Critical Medicines Act on Tuesday. Public authorities will be required to weigh supply security, not just price, when purchasing critical medicines. Governments will be permitted to subsidise new manufacturing facilities, and a "European preference" clause will seek to encourage production within the bloc.

More than 300 pharmaceuticals feature on the EU's critical medicines list, including paracetamol, morphine and insulin. The bloc currently produces only a quarter of the active pharmaceutical ingredients used in its medicines, with China supplying more than 40 per cent of EU imports by volume and India a further 20 per cent. Export restrictions during the Covid-19 pandemic exposed the vulnerability of those supply chains, and shortages have persisted, with 31 medicines including insulin and asthma treatments currently in scarce supply.

Mirroring the collective vaccine procurement strategy deployed during the pandemic, any group of five or more member states will be able to request that the European Commission purchase medicines on their behalf. Countries will be required to disclose stockpile levels, though sharing with other members will remain voluntary.

"Patients should not have to worry about whether critical medicines such as antibiotics will be available," said Neophytos Charalambides, Cyprus's health minister and holder of the rotating EU presidency.

However, the legislation is expected to raise costs at a time when health systems are already under strain. "We should have no illusions — there is a price for security of supply," said a senior Commission official. The pharmaceutical industry has also cautioned that increased state intervention could weigh on competitiveness and innovation.

The agreement still requires a formal vote in the European Parliament before taking effect.