When the first offices began to turn on their lights and the earliest workers began their routine towards their workplaces, around six in the morning, European lawmakers reached a provisional political agreement to implement the future Critical Medicines Act, one of Brussels' major regulatory bets to combat drug shortages in the European Union. The pact represents a new step in the community strategy to strengthen the bloc's health autonomy by promoting local production and diversifying external suppliers, with the aim of reducing what institutions describe as “dangerous dependencies” in pharmaceutical matters.
The initiative is born in a context marked by the lessons learned during the pandemic, the energy crisis, and the geopolitical tensions derived from the war in Ukraine, which evidenced European vulnerability to third countries in sectors considered strategic. In the pharmaceutical case, Brussels recognizes that a large part of the essential active ingredients and basic medicines consumed in Europe currently depend on highly concentrated supply chains in Asia, especially in China and India.
With this new regulation, the European Union aims to build a legal framework capable of guaranteeing continued access to essential medicines and, at the same time, strengthening the continent's industrial capacity. The agreement reached between Parliament and Council includes joint procurement measures, solidarity mechanisms, industrial incentives, and new public procurement obligations to introduce resilience criteria into the European pharmaceutical market.
Joint purchases and strategic reserves
The agreed text significantly promotes the joint purchase of medicines among Member States, following the logic applied during the acquisition of vaccines against COVID-19. Brussels' intention is for European countries to be able to jointly negotiate certain critical medicines to increase their negotiating power with pharmaceutical companies and ensure more equitable access among the different national markets.
Furthermore, the regulation establishes solidarity mechanisms and strategic reserves intended to ensure the supply of products considered vital, such as insulin, antibiotics, or certain essential hospital treatments. The rule also incorporates specific safeguards for orphan drugs, those intended for the treatment of rare or infrequent diseases, an especially sensitive area due to the limited commercial profitability of many of these products.
The European Commission considers that these tools will make it possible to avoid episodes of scarcity that in recent years have affected hospitals and pharmacies in numerous Member States. As Community sources acknowledge, supply problems no longer affect only complex or innovative medicines, but also basic products widely used in primary care.
A complementary piece of the pharmaceutical reform
The regulation actually complements the major review of European pharmaceutical legislation agreed upon at the end of last year, focusing specifically on industrial resilience and supply chain security. While the general pharmaceutical reform redefines regulatory incentives and the data protection system, the Critical Medicines Act introduces a clearly industrial and strategic dimension.
One of the main elements of the agreement is the creation of a new category of “strategic projects”, aimed at creating, modernizing or expanding the manufacturing capacity of critical medicines and active ingredients within the European Union. These projects will have priority status, benefiting from faster authorization procedures, specific administrative support and reinforced regulatory oversight.
The community objective is to reduce excessive external dependence in certain production chains considered sensitive. Brussels thus seeks to encourage industrial investments within European territory and prevent future international crises from compromising access to essential medicines again.
European institutions defend that open strategic autonomy, a concept promoted by the Commission in recent years, must also be fully extended to the health and pharmaceutical sector. The production of active ingredients, which for decades shifted towards Asia for cost reasons, is now returning to the center of European industrial policy.
Price stops being the only criterion
One of the most relevant aspects of the agreement has to do with public procurement. Parliament and Council have agreed to introduce the obligation for contracting authorities to incorporate resilience criteria in tenders for critical medicines.
This represents a substantial change from the model applied until now, where price was usually the predominant factor in the awarding of public contracts. From the entry into force of the regulation, administrations will also have to value elements such as security of supply, storage capacity, geographical diversification of suppliers, or the transparency of supply chains.
In those cases where a significant vulnerability or excessive dependence on third countries is identified, national authorities may give preference to medicines or active substances manufactured within the European Union. The measure represents one of the most sensitive changes from an economic and commercial point of view, as it de facto introduces a component of industrial sovereignty into European health policies. Community sources maintain that the measure does not aim to close the European market or break competition rules, but rather to introduce elements of strategic security in a sector considered essential. Nevertheless, some industrial and commercial players already anticipate possible debates on compatibility with international trade rules and the functioning of the internal market.
European coordination and voluntary solidarity
The agreement also contemplates the creation of the Critical Medicines Coordination Group, made up of representatives from Member States and the European Commission. This body will have the mission of coordinating investments, national programs, and collaborative purchasing mechanisms, in addition to supervising possible supply risks.
Another of the most sensitive points of the negotiation has been the one relating to the redistribution of medicines between countries in crisis situations. According to sources from the presidency of the Council, the European Parliament would have finally accepted the position of the Member States to eliminate the amendments that proposed a mandatory redistribution system.
Instead, co-legislators have opted to establish a model based on transparency and voluntary solidarity mechanisms for the exchange of information on contingency stocks and national storage capacities. Some governments showed reluctance at the possibility of being legally obliged to cede national strategic reserves in times of health crisis.
It has also been agreed to maintain a certain margin of flexibility so that national authorities can adapt the new public procurement requirements to the reality of their respective hospital markets. In this way, Brussels avoids imposing a completely uniform model in an area where significant differences persist between national health systems.
More protection for orphan drugs
Another of the elements modified during the negotiations has been the expansion of the scope of the law to expressly include orphan drugs intended for the treatment of rare diseases. Strategic projects linked to these products may benefit from accelerated procedures and specific regulatory support, although the text introduces certain nuances regarding access to direct European funding.
The inclusion of these medicines responds to the growing concern of the community institutions for guaranteeing access to therapies destined for minority pathologies, an area where the availability of treatments continues to be unequal among European countries.
To further facilitate Member States joining forces in joint purchasing, the co-legislators have reduced the minimum number of countries required to request that the European Commission negotiate acquisitions on their behalf. The threshold drops from nine to five or six States, depending on the type of procedure, which is expected to facilitate the activation of these mechanisms in future shortage situations.
Industrial obligations
In relation to strategic reserves, the agreement establishes that any national storage requirement must be applied with transparency and without generating negative distortions on the internal market or on the access of other Member States to certain products.
Furthermore, the text toughens the obligations applicable to those companies that receive European funding to develop strategic projects. The beneficiary companies must commit to maintaining production and supply within the European Union, thus reinforcing the logic of strategic autonomy pursued by Brussels.
The community institutions consider that European public funding must be accompanied by concrete industrial commitments that guarantee real benefits for the European healthcare system.
The Commission celebrates the agreement
Once this provisional political agreement has been reached, the regulation will have to be formally endorsed by both the Council and the European Parliament before it fully enters into force. Subsequently, the application of the new resilience requirements in public procurement will have a transitional period of approximately twelve months.
From the European Commission they celebrate the pact as a decisive step to strengthen the health security of the continent. Brussels considers that the law constitutes a structural response to the vulnerabilities detected in recent years and a key instrument to avoid future supply crises.
“Today’s agreement comes at a crucial moment, when the vulnerability of supply chains is so clearly exposed,” stated the European Commissioner for Health, Oliver Várhelyi, after negotiations between co-legislators were concluded.
In an interview granted to Demócrata, the Secretary General of the European People's Party, Dolors Montserrat, recently argued that the European Parliament was working so that "Europe leads the pharmaceutical sector." "We want to strengthen the production of medicines in Europe to avoid shortages, something we saw during COVID with basic products like paracetamol," the popular leader pointed out then.
Intellectual property, generics, and access
The new legislation also connects with the pharmaceutical reform agreed upon in December, for which Montserrat was the rapporteur, and which established new marketing and supply obligations for pharmaceutical companies. The objective of that reform was to provide Member States with more effective tools to guarantee a stable supply of essential medicines.
With the new rules, a Member State will be able to require a pharmaceutical company to distribute a specific medicine within its territory. In case of refusal, the company could lose certain regulatory protections linked to market exclusivity, allowing the entry of competing generic medicines. During the negotiations, European institutions insisted on the idea that the new model seeks to incentivize responsible behavior rather than punish companies. “We have incentivized, rather than punished,” explained sources present in the negotiation process.
In parallel, the co-legislators agreed to reinforce the so-called Bolar clause, a legal mechanism that allows generic drug manufacturers to begin studies and regulatory preparations before the intellectual property protection of an original drug formally expires.
The objective was to achieve that generics can enter the market immediately after the expiration of patents, reducing costs and expanding access for patients and public health systems. As explained by sources from the PPE, the intention is to eliminate "bureaucracy, time, and costs" to accelerate the availability of more affordable treatments.