Europe has a plan to avert drug shortages — to make more of them and tie their contracts to their availability.
The Critical Medicines Act, to be presented Tuesday afternoon in Strasbourg by European Health Commissioner Olivér Várhelyi and Commission Executive Vice President Teresa Ribera, will set out plans on medicines procurement, subsidies for drug production and forging new global partners to avoid supply dependencies.
Europe is heavily dependent on India and China for supplies of medicines and their ingredients, particularly for cheaper generic drugs. This over-reliance has made EU supply chains more vulnerable, with any disruption potentially leading to shortages in Europe.
At the heart of the European Commission’s proposal is an overhaul of procurement rules so that countries don’t simply opt for the cheapest available product and instead prioritize security of supply, according to a draft of the document, obtained by POLITICO on Monday.
Under the act, countries would procure drugs based on new criteria — beyond price-only awards — including stockholding obligations, the number of diversified suppliers, monitoring of supply chains, transparency and performance clauses. Countries would also procure from multiple suppliers where appropriate.
Where the EU is reliant on a single third country for a critical product, authorities should favor suppliers that manufacture a significant proportion in Europe. The act also includes plans for joint procurement of critical medicines by countries or by the Commission on their behalf.
On subsidies, the proposal says countries can financially support “strategic projects” — those located in the EU that will create, increase or modernize manufacturing capacity for critical medicines or their components. In such cases, supplies to the EU market should have priority, and both countries and the EU could fund these manufacturing projects.
State support normally goes to “first-of-its-kind” projects, meaning many manufacturers of critical medicines — commonly prescribed, everyday medicines — wouldn’t ordinarily qualify.
A new Critical Medicines Coordination Group, featuring two representatives from each country, would share information on manufacturing capacity, projects in line for state support and vulnerability in supply chains.
The draft is lighter on detail when it comes to new international partnerships. It says the Commission will “explore possibilities” to diversify supplies of critical medicines, active ingredients and starting materials.
The Critical Medicines Act is the Commission’s attempt to tackle manufacturing supply chain vulnerabilities from dependencies on India and China. It is meant to complement the revision of the pharmaceutical legislation to re-establish the bloc’s independence and boost its competitiveness in the pharmaceutical field, while ensuring access to medicines for its patients.