COMMISSION STAFF WORKING DOCUMENT Summarising evidence supporting the legislative proposal laying a framework for strengthening the availability and security of supply of critical medicinal products as well as the availability of, and accessibility of, medicines of common interest and amending Regulation (EU) 2024/795
Date: 2025-09-02
Institutions: Directorate-General for Health and Food Safety, European Commission
Subjects: EU production, investment, medicinal product, public health, public procurement, security of supply, shortage, supply chain

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 2.9.2025  SWD(2025) 263 final  COMMISSION STAFF WORKING DOCUMENT Summarising evidence supporting the legislative proposal laying a framework for strengthening the availability and security of supply of critical medicinal products as well as the availability of, and accessibility of, medicines of common interest and amending Regulation (EU) 2024/795  
 
 
CONTENTS 

1. 

INTRODUCTION ......................................................................................... 6 

2.  BACKGROUND ............................................................................................ 7 

2.1.  Political and legal context of shortages of medicines ........................... 7 

2.2.  Relevant existing EU legislation and related initiatives ........................ 8 

2.3.  Critical medicines and other medicines of common interest ............... 12 

2.3.1.  The EU pharmaceutical industry ........................................... 12 

2.3.2.  Critical medicines: a diverse set of pharmaceuticals ............. 13 

2.3.3.  Medicines of common interest .............................................. 17 

3.  PROBLEM DEFINITION .......................................................................... 19 

3.1.  Problem 1: Shortages of medicines affecting the security of supply and 
availability of critical medicines ......................................................... 19 

3.2.  Problem 2: Market failures affecting the availability of and accessibility 
to medicines of common interest ......................................................... 22 

3.3.  What are the problem drivers? ............................................................ 23 

3.4.  How likely is the problem to persist? .................................................. 27 

4.  CONSULTATION AND USE OF EXPERTISE ...................................... 28 

4.1.  Critical Medicines Alliance ................................................................. 29 

4.2.  Call for Evidence ................................................................................. 30 

4.3.  Targeted consultations ......................................................................... 31 

4.4.  Other sources of evidence ................................................................... 32 

5.  MAIN MEASURES OF THE LEGISLATIVE PROPOSAL ................. 32 

5.1.  Objectives of the proposal ................................................................... 32 

5.2.  Choice of the legal instrument and legal basis .................................... 33 

5.3.  EU added value / necessity for EU action ........................................... 33 

5.4.  Complementarity  with  other  EU  legislative  initiatives  on  medicine 
shortages .............................................................................................. 33 

5.5. 

Intervention logic of the proposal ........................................................ 35 

5.6.  Description of the proposed measures (preferred option) ................... 35 

5.6.1. Enabling conditions for investment ........................................... 36 

5.6.2 Demand side measures ............................................................... 39 

Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË – Tel. +32 22991111 

Office: B232 06/118 – Tel. direct line +32 229-56465 

 
 
 
 
 
5.6.3. Critical Medicines Coordination Group .................................... 44 

5.6.4. International cooperation ........................................................... 45 

5.7.  Options considered and measures discarded ....................................... 45 

6.  ANALYSIS  OF  THE  MAIN  IMPACTS  FOR  THE  PROPOSED 
MEASURES ................................................................................................. 50 

6.1.  Baseline 50 

6.2.  Economic and social impacts of the proposal ..................................... 53 

6.2.1   Economic impacts ................................................................. 53 

6.2.2.  Social impacts ........................................................................ 61 

6.2.3.  Environmental impacts .......................................................... 62 

6.3.  Other impacts ....................................................................................... 62 

6.4.  Costs and benefits of the proposal ....................................................... 63 

ANNEX 1 - CRITICAL MEDICINES ALLIANCE RECOMMENDATIONS
 ....................................................................................................................... 66 

ANNEX 2 – MAPPING OF EXPECTED COSTS AND BENEFITS OF THE 
LEGISLATIVE PROPOSAL ..................................................................... 72 

ANNEX 3 - COMPETITIVENESS CHECK .................................................... 80 

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Acronyms 

Meaning or definition 

Glossary 

API 

CDMO 

CEP 

CHESSMEN 

Active Pharmaceutical Ingredient 

Contract Development and Manufacturing Organization 

Certificate of Suitability 

Coordination  and  Harmonisation  of  the  Existing  Systems 
against  Shortages  of  Medicines  –  European  Network)  –  EU 
Joint Action on shortages 

CMA 

CRMA 

Critical Medicines Act 

Critical Raw Materials Act 

DG COMP 

DG Competition 

DG GROW 

Directorate-General 
Entrepreneurship and SMEs 

for 

Internal  Market, 

Industry, 

DG HERA 

Health Emergency Preparedness and Response Authority 

DG SANTE 

Directorate-General for Health and Food Safety 

eAF 

ECDC 

EDQM 

EFPIA 

EMA 

EMVS 

ESG 

ESMP 

GVA 

MAH 

MS 

MSSG 

electronic Application Form 

European Centre for Disease Prevention 

European  Directorate  for 
HealthCare 

the  Quality  of  Medicines  & 

European  Federation  of  Pharmaceutical 
Associations  

Industries  and 

European Medicines Agency 

European Medicines Verification System 

Environmental, Social and Governance 

European Shortages Monitoring Platform 

Gross Value Added 

Marketing Authorisation Holder 

Member State 

Executive Steering Group on Shortages and Safety of Medicinal 
Products  

3 

 
PO 

SPOC 

SPP 

SU 

SWD 

Terms 

Policy Option 

Single Point of Contact 

Shortage Prevention Plans 

Standard Units 

Staff Working Document 

Definitions 

Medicinal product  Medicinal product as defined in Article 4 point (1) of Directive 
(EU) …/… of the European Parliament and of the Council –
[reference to be added to corresponding Article after adoption 
of cf. COM(2023) 192 final];   

Key input 

Input material other than an active substance required in the 
manufacturing process of a given medicinal product, including 
primary  packaging  materials,  excipients,  solvents  and 
reagents; 

Active substance 

Active substance as defined in Article 4 point (3) of Directive 
(EU)  …/…  of  the  European  Parliament  and  of  the  Council 
[reference to be added to corresponding Article after adoption 
of cf. COM(2023) 192 final]; 

Critical  medicinal 
product 

Medicinal  product  for  which  insufficient  supply  results  in 
serious harm or risk of serious harm to patients as defined in 
Article 4 point (13) of the Regulation (EU) …/… [reference to 
be added after adoption of cf. COM(2023) 193 final]; 

Medicinal  product 
of common interest 

Medicinal product, other than a critical medicinal product, for 
which in three or more Member States the functioning of the 
market  does  not  sufficiently  ensure  the  availability  and 
accessibility  to  patients  in  the  quantities  and  presentations 
necessary  to  cover  the  needs  of  patients  in  those  Member 
States; 

Vulnerability in the 
supply chains 

Risks  and  weaknesses  within  the  supply  chains  of  critical 
medicinal  products,  identified  at  the  aggregated  level  taking 
into account all authorised medicinal products in the EU and 
grouped  under  a  common  name  with  the  same  route  of 
the 
administration  and 
continuous supply of such medicinal products to patients in the 
Union; 

that  compromise 

formulation, 

Vulnerability 
evaluation 

Evaluation of the supply chains of critical medicinal products 
to  identify  their  vulnerabilities  performed  by  the  MSSG  in 
accordance  with  Regulation  (EU)  …/…  of  the  European 

4 

 
Parliament  and  of  the  Council  [reference  to  be  added  after 
adoption cf. COM(2023) 193 final], 

Contracting 
authority 

Contracting  authority  as  defined  in  Article  2(1)  of  Directive 
2014/24/EU; 

Strategic Project 

Industrial project identified pursuant to the criteria set out in 
Article 5 of the Commission proposal for a Critical Medicines 
Act. 

Project promoter 

Undertaking  or  consortium  of  undertakings  developing  a 
Strategic Project 

Permit 
process 

granting 

Process  covering  all  relevant  permits  to  build  and  operate  a 
strategic  project,  including  building,  chemical  and  grid 
connection  permits  and  environmental  assessments  and 
authorisations where those are required and encompassing all 
applications and procedures; 

Innovative 
manufacturing 
process 

Novel  manufacturing  process  and  technology  or  novel 
application  of  an  existing  technology,  including,  but  not 
limited 
continuous 
decentralised  manufacturing, 
manufacturing,  Artificial  Intelligence,  platform  techniques, 
3D manufacturing; 

to, 

States’ 

Member 
cross-border 
procurement 

Procurement  procedure  initiated  between  the  contracting 
authorities  from  different  Member  States  on  the  basis  of 
Article 39 of Directive 2014/24/EC; 

on 
Procurement 
behalf  of  or  in  the 
name 
the 
of 
Member States 

Procurement  procedure  initiated  at  the  request  of  Member 
States  and  mandating  the  Commission  to  act  as  a  central 
purchasing body on behalf of, or in the name of, the requesting 
Member States, as provided for in Article 168(3) of Regulation 
(EU) 2024/2509; 

Joint procurement 

Procurement procedure carried out jointly by the Commission 
and  Member  States,  as  provided  for  in  Article  168(2)  of 
Regulation (EU) 2024/2509; 

Supplier 

Strategic 
partnership 

Manufacturer  or  marketing  authorisation  holder  of  finished 
dosage forms, key inputs or active substances; 

Commitment between the Union and a third country, group of 
third  countries  or  international  organisations  to  increase 
cooperation related to one or more critical medicinal products 
that is established through a non-binding instrument and which 
facilitates  beneficial  outcomes  for  both  the  Union  and  the 
relevant third country, group of third countries or international 
organisation. 

5 

 
1. 

INTRODUCTION 

This Staff Working Document (SWD) summarises the analysis and evidence supporting 
the Commission legislative proposal for a Regulation laying a framework for strengthening 
the  availability  and  security  of  supply  of  critical  medicinal  products  as  well  as  the 
availability  and  accessibility  of  other  medicinal  products  of  common  interest (1).  The 
proposal for the so-called Critical Medicines Act (CMA) was adopted on 11 March 2025.  

The  growing  issue  of  medicines  shortages  poses  a  serious  threat  to  patients  and  public 
health.  Healthcare  systems  in  the  EU  face  increasing  challenges  to  secure  a  stable  and 
resilient supply of medicines that are critical to ensure a high level of care to EU patients. 
Recent  global  events,  including  the  COVID-19  pandemic  and  Russia’s  war  against 
Ukraine,  have  exposed  vulnerabilities  in  the  EU’s  pharmaceutical  supply  chains.  In 
addition,  the  strong  reliance  on  non-EU  suppliers  and  lack  of  diversification  of  global 
supply  chains  exacerbate  the  risk  of  shortages.  Without  swift  action  to  address  these 
vulnerabilities, in addition to regulatory measures on shortage management and security 
of  supply  of  critical  medicines  introduced  with  the  reform  of  the  pharmaceutical 
legislation, disruptions could have severe consequences for patient care, including delayed 
treatments for life-threatening conditions.  

The  proposed  Regulation  delivers  on  the  political  commitment  by  President  von  der 
Leyen (2) to propose a Critical Medicines Act to address the severe shortages of medicines 
and reduce dependencies relating to critical medicines and ingredients, as well as to ensure 
the supply of affordable medicines. In this regard, the Act is an important element of the 
European Health Union and  complements (1) the regulatory provisions proposed in  the 
context of the ongoing  revision of the pharmaceutical  legislation of the EU  (3);  (2) the 
reinforced  mandate  for  the  European  Medicines  Agency  on  crisis  preparedness  and 
management for medicines  (4); (3) key actions in relation to the completion of a European 
Health Union in which all EU Member States prepare and respond together to health crises 
and in which medical supplies are available, affordable and innovative  (5); and (4) new 
industrial policy measures that recently came into force in other ‘critical’ domains  (6). 

The proposed Regulation also aims to improve access to and availability of other medicines 
of common interest where a market failure exists, complementing the regulatory measures 
proposed in the revision of the pharmaceutical legislation.  

(1)  Critical medicines Act - European Commission 

(2)  Political guidelines 2024-2029 

(3)  Reform of the EU pharmaceutical legislation - European Commission 

(4)  A stronger role for EMA | European Medicines Agency (EMA) 

(5)  European Health Union 

(6)  European Critical Raw Materials Act and Net-zero Industry Act  

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2.  BACKGROUND  

2.1. 

Political and legal context of shortages of medicines 

The EU has a strong and competitive pharmaceutical sector, which is a global leader in the 
production of medicines and a major contributor to the EU economy and directly employs 
around  800,000  people (7).  The  sector  is  particularly  strong  in  the  research  and 
development  of innovative medicines.  The landscape for pharmaceutical  manufacturing 
has  evolved  in  recent  decades.  Pharmaceutical  production  in  the  EU  has  increasingly 
focused  on  more  complex  products,  which  require  high-tech  infrastructure,  a  skilled 
workforce  and  sophisticated  processes.  Production  of  inputs  for  generic  medicines  has 
increasingly  moved  outside  Europe.  At  the  same  time,  almost  70%  of  the  medicines 
dispensed in Europe are generics (8). 

In  September  2020,  the  European  Parliament  adopted  a  resolution  on  the  shortages  of 
medicines (9), calling  for  rapid  action to  ensure security of supply of medical  products, 
reduce  the  EU’s  dependence  on  third  countries  and  support  local  pharmaceutical 
manufacturing for medicines of major therapeutic interest.  

More recently, 23 Member States submitted a non-paper calling for a Critical Medicines 
Act (10). The European Council reiterated this call for urgent measures to ensure sufficient 
production  and  availability  of  the  most  critical  medicines  and  components  in  June 
2023 (11). In June 2024, the Council approved Council Conclusions on the future of the 
European  Health  Union (12),  which  invited  the  Commission  and  the  Member  States  to 
continue the work on addressing vulnerabilities in the supply chains of critical medicines 
and,  where  appropriate,  make  suggestions  to  improve  their  security  of  supply.  In  these 
conclusions,  the  Council  also  invited  the  Commission  to  consider  proposing  a  Critical 
Medicines  Act  to  provide  a  legal  framework  to  address  supply  chain  vulnerabilities  of 
critical  medicines,  with  the  aim  to  strengthen  EU  production  and  diversify  vulnerable 
supply chains.  

Furthermore,  several  Member  States  raised  the  potential  impact  of  stockpiling  and 
contingency stock requirements on supply in other member states at the EPSCO (Health) 
meeting  in  June  2024  and  called  for  a  coordinated  approach  at  EU  level  to  ensure 
transparency,  proportionality  and  solidarity (13).  At  the  EPSCO  meeting  in  December 
2024, several Member States called for a voluntary cooperation of Member States on joint 

(7)  Impact  assessment  report  and  executive  summary  accompanying  the  revision  of  the  general 

pharmaceutical legislation, annex 5, 2023 

(8)  IQVIA White paper. Beneath the Surface: Unravelling the True Value of Generic Medicines April 2024 

(9)  European Parliament resolution on the shortages of medicines  

(10)  Non-paper on improving the security of medicines supply in Europe 

(11)  Council conclusions adopted in June 2023 

(12)  Council conclusions on the future of the European Health Union  

(13)  Employment, Social Policy, Health and Consumer Affairs Council (Health), 21 June 2024 

7 

 
 
procurement of medicinal products (14). The discussion referred to the need of providing a 
legal basis under EU law for this type of actions. 

In  addition  to  this,  the  existence  of  market  failures  for  other  medicines  of  common 
interest (15)  persist  in  several  countries,  leading  to  challenges  of  availability  and 
accessibility  of  medicines.  This  is  due  to  certain  structural  market  failures  that  prevent 
some medicines from being launched in specific national markets or cause delays in their 
launching. These failures may arise from factors such as a limited patient population, as it 
is  often  the  case  with  orphan  medicines,  or  the  small  size  of  a  country’s  market. 
Additionally, some medicines, such as novel antimicrobials, are intended to be used only 
in  exceptional  cases,  resulting  in  very  low  expected  sales  volumes.  These  conditions 
contribute to an uneven presence of medicines across Member States.  

2.2.  Relevant existing EU legislation and related initiatives 

Shortages of medicines have been on the EU’s political agenda for many years (16). The 
pharmaceutical  strategy  for  Europe  in  2020 (17)  acknowledged  the  need  to  create  a 
future-proof  regulatory  pharmaceutical  framework  and  give  additional  support  to  the 
pharmaceutical industry in promoting research, innovation and technologies that meet the 
therapeutic needs of patients while ensuring affordable access to medicines.  

The pharmaceutical strategy also included the launch of a structured dialogue (18) on the 
industrial  policy  dimension  of  security  of  supply  in  a  public  health  context.  Starting  in 
2021,  this  initiative  brought  together  stakeholders  from  the  pharmaceutical  industry 
(including  manufacturers  of  active  substances),  wholesalers,  academia,  healthcare 
professionals and patients, and Member State authorities.  

Subsequently, the Commission published a staff working document on vulnerabilities 
of the global supply chains of medicines in 2022 (19) which presented the main findings 
of the structured dialogue with the aim of informing further actions to improve the security 
of supply and the availability of critical medicines, active substances and raw and starting 
materials for pharmaceuticals. 

Additional  steps  have  been  taken  since  to  address  the  above-mentioned  challenges, 
including the challenge of ensuring supply-chain security of critical medicines. These steps 
relate  in  particular  to  the  proposed  revision  of  the  EU  general  pharmaceutical 

(14)  Employment, Social Policy, Health and Consumer Affairs Council (Health), 3 December 2024 

(15)  According  to  Article  3(5)  of  the  CMA  proposal,  a  medicinal  product  of  common  interest  means  “a 
medicinal product, other than a critical medicinal product, for which in three or more Member States 
the functioning of the market does not sufficiently ensure the availability and accessibility to patients in 
the quantities and presentations necessary to cover the needs of patients in those Member States”. 

(16)  See  for  instance  the  European  Parliament  resolution  of  2  March  2017  on  EU  options  for  improving 

access to medicine and the EPSCO Council Conclusions (2021/C 269 I/02) 

(17)  A pharmaceutical strategy for Europe - European Commission (europa.eu) 

(18)  Structured dialogue on security of medicines supply - European Commission (europa.eu) 

(19)  Staff  working  document  on  vulnerabilities  of  the  global  supply  chains  of  medicines    -  European 

Commission (europa.eu) 

8 

 
 
legislation (20), which is currently under discussion by the co-legislators, and the extended 
mandate of the European Medicines Agency (EMA) (21).  

The revision of the EU general pharmaceutical legislation introduces several regulatory 
measures to prevent and mitigate critical shortages through EU coordinated actions, and to 
strengthen the security of supply of critical medicines in the EU. It also aims to improve 
access to medicines across the EU by clarifying responsibilities, streamlining regulatory 
processes for the approval of medicines, fostering the competitiveness of the EU regulatory 
system as well as incentivising equitable access to medicines in all Member States.  

In addition, the new regulation on Health Technology Assessment (22) that entered into 
force  in  2022  and  applies  from  2025  onwards,  aims  to  ensure  a  fair,  transparent,  and 
evidence-based assessment of medical technologies. This legislation is  also expected to 
reduce delays in access to innovative medicines, such as new cancer treatments, advanced 
therapy medicinal products and orphan medicines. By establishing a framework for joint 
clinical assessments among EU Member States, the new HTA regulation aims to enhance 
national decision-making processes, reduce duplication of efforts and promote equitable 
access to innovative medical technologies across the Union.  

In  2023,  the  Commission  published  a  Communication  on  addressing  medicine 
shortages in the EU (23), setting out a number of actions to better prevent and mitigate 
critical medicine shortages in the EU. While pharmaceutical companies are responsible 
for ensuring sufficient supply of medicines to cover the needs of patients, Member States 
ensure the supervision of medicines supply in their territory. Most shortages are managed 
and  resolved  at  the  national  level.  However,  to  prevent  and  mitigate  critical  shortages 
where no alternative medicines are available and that cannot be solved at the national level, 
coordinated action is needed to address supply challenges and to make Europe’s medicine 
supply  chains  more  resilient  in  the  long  run.  This  coordinated  work  had  already  been 
established  at  EU  level  in  the  context  of  crisis  preparedness  and  management  and  was 
codified in legislation with the introduction of the EMA extended mandate, Regulation 
(EU) 2022/123. 

The  2023  Communication  therefore  put  a  particular  focus  on  the  need  for  preventative 
measures to ensure the security of supply of the most critical medicines at all times. It 
highlighted the need to publish a Union list of critical medicines prior to the adoption 
of the revised EU pharmaceutical legislation. The first Union list of critical medicines, 
identified by combining the criteria of seriousness of the  disease and the availability of 
alternative  medicines,  was  published  by  the  European  Commission,  the  EMA  and  the 
Heads of Medicines Agencies of the Member States in December 2023. A second version 
was  published  in  December 2024 (24). The list includes  276 individual active substance 

(20)  Reform of the EU general pharmaceutical legislation (europa.eu) 

(21)  Regulation  (EU)  2022/123  of  the  European  Parliament  and  of  the  Council  of  25  January  2022  on  a 
reinforced  role  for  the  European  Medicines  Agency  in  crisis  preparedness  and  management  for 
medicinal products and medical devices 

(22)  Regulation (EU) 2021/2282 of the European Parliament and of the Council of 15 December 2021 on 

health technology assessment and amending Directive 2011/24/EU  

(23)  Communication on addressing medicine shortages in the EU – European Commission (europa.eu) 

(24)  Union list of critical medicines | European Medicines Agency (EMA) 

9 

 
 
groups,  covering  treatments  for  various  illnesses  such  as  infections,  cardiovascular 
diseases, mental health conditions and cancer. It provides a first list of medicines whose 
supply chain vulnerabilities should be analysed and where further actions may be needed 
to  reinforce  supply  chains.  In  2024,  the  Commission  conducted  a  vulnerability 
assessment pilot on 11 critical medicines included on the Union list. The technical report 
published in July 2024 provides a summary of the main findings  as  well as the lessons 
learnt on the data management, methodology and stakeholders’ engagement (25).  

As an additional measure towards boosting the security of supply of critical medicines, the 
Commission also announced in its Communication the creation of a ‘Critical Medicines 
Alliance’ in preparation of a proposal for a Critical Medicines Act (26). This Alliance was 
formally launched in April 2024 (27). The main objective of the Alliance was to ‘identify 
challenges resulting from vulnerabilities and the most appropriate actions and instruments 
to address the vulnerabilities in the supply chains of critical medicines, with the primary 
public health goal of reducing the risk of shortages of those critical medicines’. It brought 
together  over  300  organisations,  including  industry,  patient  organisations,  scientific 
researchers,  healthcare  providers  and  public  authorities.  The  work  of  the  Alliance 
culminated with its Strategic Report including a set of recommendations on 28 February 
2025 (28). 

In  2024,  the  Commission  organised  several  ad  hoc  meetings  of  the  Pharmaceutical 
Committee (29)  in  response  to  Member  States’  call  for  further  coordinated  actions  on 
contingency stocks (30). These meetings aimed at  sharing  information  between Member 
States  on  existing  or  planned  national  measures  on  contingency  stocks  to  increase 
transparency  and  at  discussing  common  principles  of  proportionality,  solidarity  and 
transparency for these national contingency stock requirements.  

In  recent  years,  the  EU  has  also  been  actively  working  to  improve  our  emergency 
preparedness and response capacity. This includes not only possible future pandemics, but 
also  natural  disasters  or  conflict  scenarios arising from  growing  geopolitical  instability. 
With the Emergency Framework Regulation (31), the EMA and the Commission will be 
empowered to gather information related to availability of medical countermeasures from 
Member States  and economic operators, in case of a declared emergency. Furthermore, 
strengthening  supply  chains,  where  medical  countermeasures  are  concerned,  will  also 
contribute to the crisis preparedness strategy. 

(25)  Commission  assessment  shows  the  need  to  reinforce  resilience  of  critical  medicines  supply  chains  - 

European Commission, 2024 

(26)  Critical Medicines Alliance - European Commission 

(27)  Launch of the Critical Medicines Alliance  

(28)  Strategic Report of the Critical Medicines Alliance 

(29)  Human Pharmaceutical Committee - Meetings - European Commission 

(30)  Contingency stock requirements refer to obligations imposed by Member States on supply chain actors 

to hold buffer stocks of certain medicines to mitigate the risk of supply chain disruptions.  

(31)  Council  Regulation  (EU)  2022/2372  on  a  framework  of  measures  for  ensuring  the  supply  of  crisis-

relevant medical countermeasures in the event of a public health emergency at Union level 

10 

 
 
Collaborative procurement 

Prior  to  the  COVID-19  pandemic,  there  was  the  possibility  for  joint  procurement  of 
medicines at EU level under the Joint Procurement Agreement for which the legal basis 
was  Decision  No  1082/2013/EU  of  the  European  Parliament  and  of  the  Council  of  22 
October 2013 on serious cross-border threats to health (32). The use of this instrument had 
been limited so far to procurements of pandemic influenza vaccines. 

The COVID-19 pandemic saw major developments in the area of joint procurement. The 
Joint  Procurement  Agreement  was  used  to  procure  a  wide  range  of  medical 
countermeasures (33)  and  equipment.  An  entirely  separate  temporary  legal  basis  was 
created by the Commission and Member States  on the basis of the  Emergency Support 
Instrument  for  the  urgent  procurement  of  COVID-19  vaccines  by  the  Commission  on 
behalf  of  the  Member  States  which  at  the  time  was  not  provided  for  in  the  Financial 
Regulation. While the COVID-19 vaccines procurement remains a unique example of the 
Commission’s procurement on behalf of Member States, from 2020 onwards, the amount 
of joint procurement carried out at EU level has increased significantly and is still used to 
improve the preparedness of participating countries by securing medical countermeasures 
against any cross-border threat to health (e.g. procurement of the mpox vaccine (34)). 

Since the end of the COVID-19 pandemic, the Joint Procurement Agreement’s legal basis 
has been revised and replaced by Regulation (EU) 2022/2371 of the European Parliament 
and  of  the  Council  of  23  November  2022  on  serious  cross-border  threats  to  health. 
Moreover, Council Regulation  (EU) 2022/2372  of 24 October 2022 on a framework of 
measures for ensuring the supply of crisis-relevant medical countermeasures in the event 
of  a  public  health  emergency  at  Union  level  has  provided  a  permanent  legal  basis  for 
procurement in a crisis scenario. 

In  addition,  national  governments  have  established  different  forms  of  regional 
collaboration for cross-border procurement of medicines or related activities such as joint 
price  (or  reimbursement)  negotiations.  Member  States  have  the  possibility  to  initiate 
procurement procedures between contracting authorities from different Member States on 
the basis of Article 39 of Directive 2014/24/EU  of the European Parliament  and of the 
Council on public procurement. Successful examples of such  cross-border procurement 
include the Baltic Procurement Initiative (joint procurement of vaccines included in the 
national  immunisation schedules of at  least  two of the three member countries Estonia, 
Latvia, and Lithuania) or the joint Nordic tenders conducted by some of the members of 
the  Nordic  Pharmaceutical  Forum  (Denmark,  Iceland,  Norway,  Sweden)  to  jointly 
purchase  mainly  “old”  (well-established)  hospital  medicines.  Differently  to  these  two 
initiatives,  the  Beneluxa  Initiative  -  which  brings  together  Belgium,  the  Netherlands, 
Luxembourg, Austria and Ireland - focuses on high-cost, potentially innovative medicines 

(32) Joint Procurement Agreement – European Commission    

(33)  Medical  countermeasures  encompass  vaccines,  therapeutics,  diagnostics,  and  personal  protective 
equipment  (PPE).  They  play  a  vital  role  to  enhance  our  protection  from  current  and  future  health 
emergencies, including those arising from infectious disease outbreaks, antimicrobial resistance (AMR), 
chemical,  biological,  radiological  or  nuclear  (CBRN)  threats,  or  other  large-scale  cross-border 
emergencies. 

(34)  Procurement of vaccines for Africa Mpox outbreak 

11 

 
 
and does not conduct joint procurement. However, member countries have conducted joint 
price negotiations. 

2.3.  Critical medicines and other medicines of common interest  

2.3.1. 

The EU pharmaceutical industry  

The pharmaceutical industry is of significant importance to the EU, not only for its critical 
role in developing treatments that improve health and quality of life for patients, but also 
for its substantial contribution to the EU economy. 

According to the exploratory study dedicated to the Critical Medicines Act (35), the total 
production value of basic pharmaceutical products (36) fluctuated between EUR 21 billion 
and EUR 26 billion between 2013 and 2018. Over 2018-2023, the basic pharmaceutical 
production  in  the  EU  experienced  significant  growth,  driven  in  part  by  the  increased 
demand during the COVID-19 pandemic, reaching a record high of EUR 44bn in 2023. 
This  was  in  line  with  global  trends  that  saw  the  demand  for  prescription  medicines 
worldwide steadily increasing by about 13% per year.  

 Figure 1 - Sold production of basic pharmaceutical products, EU, 2013-2023 (in EUR 

billion)  

Source: Eurostat (available here)  Note: EU except Cyprus, Luxembourg and Malta. 

(35)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

(36)  This class comprises medicinal active substances to be used for their pharmacological properties in the 
manufacture of medicines such as antibiotics, basic vitamins, salicylic and O-acetylsalicylic acids etc 
but also processing of blood (here) and non-medical products, such as the manufacture of chemically 
pure sugars. 

12 

 
 
 
 
The European Federation of Pharmaceutical Industries and Associations (EFPIA) reports 
that the total pharmaceutical production, beyond basic pharmaceutical products, in the EU 
reached EUR 266bn in 2022, with an estimated value of EUR 285bn in 2023. This reflects 
a consistent upward trend in output over the past decade. In absolute terms, the largest EU 
production markets are Italy, Belgium, Germany, and France, which together account for 
60% of total pharmaceutical production (see Figure 2). However, when measured relative 
to GDP (data not shown), key production markets include Slovenia, Belgium, Denmark 
and  Ireland,  highlighting  their  significant  contribution  to  the  pharmaceutical  sector 
compared to their overall economic size. This growth has been driven by various factors, 
such  as  the  increased  demand  for  medicines  due  the  rising  healthcare  needs,  especially 
during  the  COVID-19  pandemic,  or  the  growing  focus  on  high-value  products  like 
biologicals and advanced therapies. 

Figure 2 – Total EU pharmaceutical production, 2022 (EUR bn) 

Source: Ecorys calculations based on EFPIA (2024), available  here. Data not available for Luxembourg, Estonia and 
Lithuania. 

2.3.2. 

Critical medicines: a diverse set of pharmaceuticals 

Critical medicines are defined as medicines for which insufficient supply results in serious 
harm or risk of serious harm to patients (37). These medicines are identified using the EU 
methodology  outlined  in  the  proposed  pharmaceutical  legislation.  They  span  a  diverse 
spectrum of medicines (for human use) for which continued supply is considered a priority 
in the EU. Overall, these medicines are necessary for the normal functioning of healthcare 
systems and avoidance of serious harm to patients. 

(37)  See Article 2(13) of the proposed pharma Regulation (COM(2023) 193) final) and Article 3(4) of the 

Critical Medicines Act proposal 

13 

 
 
 
 
A first version of the Union List of Critical Medicines (38) has already been prepared in 
anticipation of the implementation of the revised EU pharmaceutical legislation and the 
Critical Medicines Act. This list has been compiled using the expertise of the Heads of 
Medicines Agencies of the Member States, the European Commission, and the EMA, in 
consultation  with  key  stakeholders,  including  healthcare  professional  and  patient 
organisations and industry associations. It includes medicines that are widely used such as 
antibiotics  (e.g.  amoxicillin),  but  also  orphan  medicines,  which  target  rare  diseases 
(affecting ≤5 in 10,000 people in the EU (39)) or speciality medicines like biologicals for 
treatment of cancer or autoimmune diseases.   

Published for the first time in December 2023 and updated one year later, the most recent 
list contains 276 active substances used in medicines for human use that are deemed critical 
using  an  agreed  methodology,  based  on  two  key  criteria:  1.  the  medicine's  therapeutic 
indication; 2. the availability of appropriate alternatives (40). It represents currently 18700 
medicinal products on the EU market.  

Medicines are included on the Union list if they meet the above-mentioned criteria on their 
critical status and if they meet additional conditions, such as the number of Member States 
considering the medicine critical or the marketing status of the medicine (41). It is important 
to note that inclusion on the list does not necessarily indicate an imminent shortage, rather 
it prioritises prevention efforts for these critical medicines. 

According  to  the  exploratory  study  on  a  Critical  Medicines  Act (42),  critical  medicines 
represent a significant and essential segment of the EU pharmaceutical market.  Sales of 
critical  medicines  accounted  for  over  EUR  30bn  in  2023,  based  on  IQVIA  MIDAS 
data (43), with a steady increase since 2019. Critical medicines can be dispensed either in 
hospitals  or  in  pharmacies  (retail).  Hospital  sales  accounted  for  slightly  more  than  half 
(52%) of total EU sales of critical medicines in 2023 (see Figure 3). Such distinction is 
important as the distribution channels are different for the two sectors: certain procurement 
practices are particularly relevant in the hospital sector.   

(38)  Union list of critical medicines | European Medicines Agency (EMA) 

(39)  Orphan medicinal products - European Commission 

(40)  Union list of critical medicines | European Medicines Agency (EMA) 

(41)  Member States carry out the criticality assessment according to an agreed matrix. The outcomes for each 
medicine are processed by EMA and reviewed according to the agreed conditions to identify medicines 
as  critical  for  inclusion  in  the  Union  list.  As  part  of  this  assessment,  targeted  consultations  with 
stakeholders, including patients, consumers and healthcare professionals, may take place.  

(42)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

(43)  Use of the WHO ATC Level 5 codes to identify medicinal products listed on the Union List of Critical 
Medicines (updated version published in December 2024). While an exact match with ATC codes was 
possible for most products, certain products were instead identified by matching their active substances 
(leading possibly to a slight overestimation of the market size/volume of critical medicines). 

14 

 
 
 
 
Figure  3  -  Sales  (EUR)  of  critical  medicines  in  the  EU,  by  year  and  distribution 
channel 

Source: Ecorys based on IQVIA MIDAS®: value sales data of critical medicines in the EU for period January 2019 to 
December 2023 reflecting estimates of real-world activity. Copyright IQVIA. All rights reserved. 

Figure  4  further  breaks  down  the  sales  of  critical  medicines  in  the  EU  by  country  and 
distribution  channel  for  2023.  It  highlights  substantial  disparities  in  market  size  and 
sectoral  distribution  across  Member  States,  reflecting  the  varying  roles  of  healthcare 
systems and retail distribution channels in different countries. 

France,  Germany,  Italy,  and  Spain  dominate  the  sales  landscape  of  critical  medicines, 
accounting  for  more  than  70%  of  the  EU  market.  This  reflects  their  large  national 
healthcare  markets  for  critical  medicines  and  may  also  be  driven  by  price  differentials 
across Member States. In these countries, with the exception of Germany, hospital sales 
surpass retail sales, highlighting the critical role of hospitals in the distribution of these 
medicines.  In  France,  the  distribution  is  relatively  more  balanced,  with  57%  of  sales 
through hospitals and 43% through retail. In contrast, Italy (72% hospital, 28% retail) and 
Spain  (69%  hospital,  31%  retail)  demonstrate  a  significant  dominance  of  the  hospital 
sector.  Conversely,  Germany  stands  out  with  retail  as  the  primary  distribution  channel, 
accounting  for  72%  of  total  sales.  Mid-sized  markets,  including  Belgium,  Austria,  and 
Sweden, display similar trends with a prevalence of hospital sales. Overall, the data reflects 
the significant variations in healthcare infrastructure and market dynamics across the EU. 

15 

 
 
 
 
 
 
Figure 4 - EU sales (EUR) of critical medicines, by country and distribution channel 

(2023) 

Source: Ecorys Study based on IQVIA MIDAS®: value sales data for period January 2023 to December 2023 reflecting 
estimates of real-world activity. Copyright IQVIA. All rights reserved. *Note: for Greece and Estonia only retail data 
are available. 

Figure 5 illustrates the distribution of EU sales for critical medicines in 2023 (44). Non-
generic  products  represent  the  largest  share  in  terms  of  value  of  critical  medicines, 
amounting to EUR 16 billion (51.7%). Generic products, while contributing a substantial 
EUR 9 billion (30.6%), represent a comparatively smaller share of the value. This disparity 
appears to be driven by the relatively higher prices of non-generic medicines. However, 
when considering volumes of sales, generic products account for over 65% of total sales 
of  critical  medicines  within  the  EU,  although  non-generic  products  still  maintain  a 
significant share, slightly below one-third.  

(44)  Critical medicines are categorised by legal status into non-generic products (also known as innovator or 
reference products), generic products (medicines with same qualitative and quantitative composition in 
active substances and same pharmaceutical form as the reference medicine – they are marketed after the 
patent and exclusivity rights of the reference product has expired) and non-categorised products (when 
the legal status of is not specified in the database)  

16 

 
 
 
 
 
 
Figure 5 - EU sales of critical medicines, by legal status (2023) 

Source: Ecorys study based on IQVIA MIDAS®: value and volume sales data for period January 2023 to December 
2023 reflecting estimates of real-world activity. Copyright IQVIA. All rights reserved. Note: Quantities are expressed in 
Standard  Units  (SU),  which  is  a  unit  of  measure  designed  to  standardise  comparisons  across  different  markets, 
formulations, and packaging. It is agnostic to pack size and represents the smallest measurable dose of a product, such 
as a single tablet capsule, vial or millimetre of liquid medication.  

2.3.3. 

Medicines of common interest  

Medicines of common interest are defined as medicines, other than critical medicines, for 
which in three or more Member States the functioning of the market does not sufficiently 
ensure  the  availability  and  accessibility  to  patients  in  the  quantities  and  presentations 
necessary to cover the needs of patients in those Member States (45). Medicines of common 
interest can comprise all types of medicines - novel medicines, off-patent molecules, or 
others - if a market failure prevents the medicine from being available and accessible to 
patients  in  affected  Member  States.  Similarly  to  critical  medicines,  the  medicines  of 
common interest span a wide range of therapeutic areas, from orphan medicines to novel 
antibiotics.  

The  category  of  medicines  of  common  interest  could  include  any  of  the  approved 
medicines in Europe, other than critical medicines, including newly authorised medicines 
at EU-level, providing that a market failure exists (46).  

(45)  See Article 3(5) of the Critical Medicines Act proposal 

(46)  In 2024, EMA recommended 114 medicines for marketing authorisation, including 46 with new active 
substances.  Over  the  past  years,  on  average  45  new  medicines  were  authorised  by  the  Commission 
through the centralised procedure. From the impact assessment underpinning the general pharmaceutical 
legislation (section 5.1.1, page 30), it is noted that the life sciences sectors continue to invest in and 

17 

 
 
 
 
 
Policy actions related to medicines of common interest are restricted to those medicines 
where there is a need for EU intervention. Market failures may arise from various structural 
factors, such as limited population sizes (as seen with orphan medicines), or the nature of 
some medicines that are intended to be used only sparingly, such as novel antimicrobials. 
Estimating  the  probabilities  of  market  failures  leading  to  access  and  availability  issues 
requires  assumptions  on  the  likelihood  of  arising  market  failures,  the  likelihood  of 
addressing  the  problem  by  the  affected  Member  States,  and  the  probability  of  Member 
States agreeing on a set of actions. Making highly uncertain assumptions about the future 
state of markets and policy actions is outside the scope of this document.  

To  illustrate  the  problem  of  access,  and  as  a  proxy  for  the  problem  of  availability  of 
medicines,  the  unequal  access  of  EU  Member  States  to  innovative  medicines  can  be 
considered. While most likely only a fraction of innovative medicines are only marketed 
in  a  few  Member  States  due  to  market  failures,  figures  about  the  lack  of  access  of  EU 
Member States can give an upper bound estimate for the problem as follows: 

The impact assessment underpinning the general pharmaceutical legislation (47)  has shown 
that approximately 90 million of EU citizens or 20% of the EU population lack complete 
access to the average new medicine 5 years after that new medicine received marketing 
approval in the EU. This estimate is a rather conservative approximation of the possible 
scope of medicines of common interest because it does not include medicines which are 
available  but  hardly  or  not  affordable,  for  example  when  not  dispensed  due  to  price 
constraints. 

The lack of access has been illustrated more recently in a case study of medicines approved 
in  2011  reported  in  the  Draghi’s  report (48)  (see  below).  Figure  6  displays,  by  Member 
State, the number of medicines brought to the market between 2011 and 2022 from the 
group  of  medicines  for  human  use  (excluding  generics  and  biosimilars)  that  received 
central  marketing  authorisation  in  2011.  The  graph  highlights  that  a  maximum  of  30 
medicines (“products”) of that sample were launched in Germany (DE) between 2011 and 
2022. In 2022, after 11 years, a maximum of 20 new medicines of the same sample were 
launched  in  the  countries  with  the  least  newly  launched  medicines  (LT,  HR,  LV).  The 
graph  illustrates  with  the  sample  of  2011  authorised  medicines,  that  10  medicines,  or 
around 30% of all newly launched medicines, were not available in at least three countries 
after 11 years (49).  

Figure 6 also shows that, even after 11 years, in 2022, a group of 8 Member States (approx. 
19% of the EU population) lacked access to at least 20% of medicines that were approved 
in 2011. The Member States which lacked access to at least 20% of the approved medicines 

advance  innovative  therapeutics  and  vaccines,  the  total  number  of  products  that  are  in  active 
development globally exceeds 6,000, up 68% over the 2016 level. (‘Global Trends in R&D: overview 
through 2021,’ IQVIA Institute for Human Data Science, February 2022.) Rich pipelines translate to 
more  medicine  authorisations,  and  it  is  assumed  that  the  current  annual  30-40  authorisations  of 
medicines with new active substances in the EU will expand to 50-60 in the next 15 years. In a dynamic 
baseline,  the  IA  considers  the  middle  value  at  the  middle  of  the  next  15-year  period,  45  innovative 
medicines per year.    

(47)  Impact assessment underpinning the general pharmaceutical legislation - Annex 4, Figure 3, page 48. 

(48)  Draghi’s report on “The future of European competitiveness, part B”, figure 7, p. 194. 

(49)  The graph does not inform us whether the 10 medicines which are not available in at least three MS 

were actually the same medicines. 

18 

 
 
after 11 years (Figure 7, Draghi report) miss out access to 8 medicines (26% of all approved 
medicines in 2011) on average. Even for the medicines that were ultimately launched in 
the group of 8 Member States, the average delay to the date of the marketing authorisation 
was up to 4 years and in many Member States more than 3 years. 

Figure 6 – Wide differences in national market launches  

Source: European Commission. Based on IQVIA MIDAS quarterly volume sales data for period 2012 – 2022 reflecting 
estimates of real-world activity. Copyright IQVIA All rights reserved  

3.  PROBLEM DEFINITION  

3.1. 

Problem  1:  Shortages  of  medicines  affecting  the  security  of  supply 
and availability of critical medicines 

The main problem  that the CMA proposal  aims  to  tackle is the  increasing challenge to 
secure a stable and resilient supply of medicines that are critical to ensure the health of EU 
patients.  The  potential  consequences  of  medicine  shortages  are  significant  for  both  EU 
citizens and society. They include:  

- 

- 

- 

reduced  quality  of  life  for  patients,  particularly  for  those  with  chronic  or  life-
threatening  conditions  and  potential  deterioration  of  their  health  status  due  to 
delays in treatment and suboptimal care;   
increased  healthcare  costs,  as  alternative  treatments  or  medicines  may  be  more 
expensive; and, 
additional  burden  on  healthcare  systems,  as  the  management  of  medicines 
shortages leads to substantial costs for public authorities while healthcare providers 
are  spending  significant  time  and  resources  managing  shortages  and  finding 
alternative treatments instead of dispensing care to their patients.  

In  2024,  among  the  1214  shortage  notifications  received  by  EMA  from  marketing 
authorisation holders of centrally authorised medicines (corresponding to shortages of 280 

19 

 
 
 
 
molecules), 35 molecules are included in the most recent version of the Union list of critical 
medicines (version 2) (50). 

In  addition,  among  the  63  notifications  of  critical  shortages  by  national  competent 
authorities to EMA via the SPOC working party, 29 molecules are included in the Union 
list of critical medicines (version 2) (51).  

Root causes of medicine shortages  

Causes for shortages are complex and multifactorial and can include challenges along the 
entire  pharmaceutical  value  chain,  such  as  quality  and  manufacturing  problems, 
commercial decisions, and complex supply chains. Since 2019, root causes of shortages 
have  been  classified  by  the  Medicine  Shortages  SPOC  working  Party  (formerly  known 
SPOC Network) under eight distinct categories to harmonise critical shortage detection, 
reporting and management across the EU medicines regulatory network. These have been 
further analysed in the context of the exploratory study in view of a Critical Medicines 
Act (52):    

-  Quality issues  
-  Manufacturing issues  
-  Regulatory issues  
-  Safety and efficacy issues  
-  Unpredicted major events or natural disasters  
-  Unexpected increased demand  
-  Distribution issues  
-  Commercial reasons 

(50)  Union list of critical medicines - European Medicines Agency  

(51)  These numbers should not be considered in isolation as there may be multiple shortage notifications for 
a  given  molecule/INN  in  cases  where  there  are  both  NAPs  and  CAP  authorisations  or  different 
presentations. 

(52)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

20 

 
 
 
 
 
Figure  7  –  SPOC  Network  (now  Medicine  Shortages  SPOC  Working  Party 
classification of root causes of shortages 

Source: Future-proofing pharmaceutical legislation - study on medicine shortages, December 2021 

The  2021  study  on  medicines  shortages (53)  pointed  to  the  fact  that  half  of  reported 
shortages  can  be  traced  back  to  issues  with  quality  and  manufacturing.  In  addition, 
commercial reasons, including market withdrawals, and unexpected increases in demand 
were also highlighted as other common causes of shortages. For example, the COVID-19 
pandemic posed a major challenge to the continued availability of medicines used in the 
treatment of COVID-19 patients due to a surge in demand. 

A recent survey conducted by the EU4Health programme-funded Joint Action of Member 
States on shortages (CHESSMEN) (54) confirmed these findings and identified that over 
50% of reported shortages are caused by manufacturing issues, a category which includes 
shortages related to the availability of active substances. 

(53)  Future-proofing pharmaceutical legislation - Study on medicine shortages, 2021 

(54)  CHESSMEN analysis report on root-causes, 2024  

21 

 
 
 
 
 
 
Figure 8 – Root causes of medicines shortages in 2022 and 2023 in EU/EEA countries 

Source: CHESSMEN joint action 

The CHESSMEN joint  action also  looked at  more granular reporting on root  causes of 
shortages  available  in  certain  countries.  In  this  context,  manufacturing  issues  such  as 
capacity  constraints  (representing  13,1%  in  2022  and  14,7%  in  2023),  delay  in 
manufacturing (7,4% in 2022 and 7,8% in 2023) or unavailability of API (2,4% in 2022 
and  2,3%  in  2023)  were  more  frequently  reported  by  marketing  authorisation  holders. 
Furthermore,  market  discontinuation  appears  to  be  the  first  cause  of  shortages  due  to 
commercial reasons, representing 4,9% in 2022 and 4,2% in 2023.   

The analysis of shortage reporting provides a good understanding of the most acute causes 
of shortages reported by the marketing authorisation holders but a more detailed analysis 
of the underlying supply challenges leading to these shortages is required (see section 3.3 
on problem drivers). It is therefore necessary to go beyond reported causes of shortages, to 
identify vulnerabilities in the supply chains, including dependency on third countries, lack 
of diversification and market concentration, that affect the resilience of supply chains as 
well as their ability to adapt and respond to unpredicted events, such as manufacturing and 
quality  issues  or  unexpected  increase  in  demand.  Other  external  factors,  such  as 
procurement  practices  and  pricing  policies  could  also  impact  the  decisions  of 
pharmaceutical companies to invest or not in resilient supply chains.  

3.2. 

Problem  2:  Market  failures  affecting  the  availability  of  and 
accessibility to medicines of common interest  

Medicines of common interest are medicines (other than critical medicines) for which, due 
to underlying market failures, availability or accessibility to patients in the quantities and 
presentations  necessary  to  meet  the  needs  of  patients  in  certain  Member  States  is  not 
sufficiently ensured. After marketing authorisation, certain medicines are not launched in 
all Member States or are launched with major delays or in insufficient quantities or  are 

22 

 
 
 
subsequently withdrawn.  Companies have the choice where and when to launch centrally 
authorised  medicines.  Under  the  current  legislation,  they  only  risk  to  lose  the  market 
authorisation, if the product is not launched in at least one Member State within three years 
of its authorisation (the so-called ‘sunset clause’). Some companies enter into pricing and 
reimbursement  negotiations  only  a  significant  time  after  the  marketing  authorisation  is 
granted or not at all. This creates an unpredictable situation for patients, healthcare systems 
and Member States. The decision for a company to launch and when depends on different 
commercial factors, for example the size of the patient population, or national pricing and 
reimbursement policies or the organisation of health systems. In some cases, these factors 
can result in a market failure – for example, when the patient population is very small, or 
when the characteristics of the medicine - such as novel antimicrobials intended for limited 
use, limit its potential uptake. 

More  specifically,  these  market  failures  are  evident  in  the  case  of  medicines  for  rare 
diseases, where availability or accessibility varies considerably between Member States. 
Germany,  France  or  Italy  for  instance  have  a  high  market  uptake,  with  more  than  100 
medicines for rare diseases available. On the contrary, countries like Lithuania, Bulgaria 
or Ireland had fewer than 50 orphan medicines available (55). Furthermore, compared with 
standard medicines, access conditions for patients are worse for orphan medicines. Out of 
the 190 orphan medicinal products developed and authorised in the 2000-2020 period, data 
were  collected  for  155  of  them  and  it  was  found  that  only  about  half  of  them  were 
accessible to patients in a majority of Member States (56).  

3.3.  What are the problem drivers? 

Vulnerabilities in the pharmaceutical supply chain  

The  structured  dialogue  on  security  of  medicines  supply  which  involved  supply  chain 
actors,  public  authorities,  representatives  of  patients  and  healthcare  providers  and  the 
research community, looked at the functioning of global pharmaceutical supply chains and 
identified causes and drivers of different potential vulnerabilities threatening the supply of 
critical medicines, active pharmaceutical ingredients (APIs) and raw materials (57). Several 
potential sources of supply chain vulnerabilities were identified and described, including 
the increasing complexity and specialisation of pharmaceutical supply chains, challenges 
linked to certain production process and technologies as well as dependencies especially 
when combined with the lack of geographical and consolidation of the supply chain.  

In 2024, the Commission conducted a technical assessment of supply chain vulnerabilities 
for critical medicines (58). The analysis focused on a selection of 11 critical medicines from 
the Union list. Six indicators were considered: a) EU industrial presence, b) diversification 
(number of manufacturing sites and countries), c) market concentration (concentration of 

(55)  Evaluation  of  the  medicines  for  rare  diseases  and  children  legislation  (2020);  Chapter  5.1.2. 

Effectiveness. Reference year 2016. 

(56)  Ibid.   

(57)  Structured dialogue on security of medicines supply, 2021 

(58)  Commission  assessment  shows  the  need  to  reinforce  resilience  of  critical  medicines  supply  chains  - 

European Commission, 2024 

23 

 
 
 
production  volumes  in  few  companies  or  countries),  d)  supply  chain  risks  (self-
assessment), e) unpredictable demand (lack of demand visibility and predictability) and f) 
economic  viability.  The  issues  identified  by  the  pilot  analysis  included  the  significant 
dependences  on  non-EU  active  substances  suppliers  and  risks  stemming  from  market 
concentration.  The  pilot  analysis  pointed  to  the  need  to  strengthen  resilience,  such  as 
diversifying  supply  sources,  increasing  production  capacity  flexibility  and  developing 
robust  risk  management  frameworks  to  handle  economic  and  market  variability 
effectively.  Finally,  the  exploratory  study  in  view  of  a  CMA  as  well  as  the  Critical 
Medicines Alliance also looked at the supply chain vulnerabilities. See more details under 
section 4.    

EU dependencies on third countries for the production of API and critical medicines  

The  COVID-19  pandemic  clearly  exposed  significant  vulnerabilities  in  the  EU’s 
pharmaceutical,  in  particular  the  heavy  dependence  on  foreign  sources  for  active 
substances.  This  situation  underscored  the  critical  importance  of  economic  security,  as 
disruptions in global supply chains—whether due to pandemics, geopolitical tensions, or 
other factors—can have severe implications for national and regional security, economic 
resilience, and public health.  

The production of active pharmaceutical ingredients (APIs) for generic medicines has been 
largely moved to Asian countries in the past years for economic reasons. The Structured 
Dialogue  findings  suggest  a  strong  position  of  Asian  producers  in  the  API  market  for 
generic  products  (59).  The  analysis  of  the  certification  database  of  EDQM (60)  covering 
chemical  APIs  confirms  the  heavy  dependence  of  the  Union  on  non-EU  manufacturers 
with approximately 75% of API production sites located outside the EU, notably in India 
and China (61). For approximately 21% of the APIs analysed in the exploratory study in 
view of a CMA, there was no production within the EU at all. This clearly represents a 
significant vulnerability in the event of international supply chain disruptions. Moreover, 
this is likely an underestimation of vulnerabilities during the production process, as these 
data only cover API production and do not account for stages further upstream (i.e., raw 
materials and intermediates), for which data are more limited (62).  

The shift  to  non-EU production could  be explained by economic factors,  as the cost  of 
APIs  sourced  in  Asia  can  be  20  to  40%  lower  than  those  produced  in  the  EU.  Also, 
significant  economies  of  scale  for  Asian  suppliers  of  APIs,  precursors  and 

(59)  Commission  Staff  Working  Document  on  vulnerabilities  of  the  global  supply  chains  of  medicines, 

October 2022   

(60)  The European Directorate for the Quality of Medicines & HealthCare (EDQM) maintains a Certification 
database which includes information on Certificates of Suitability (CEPs) granted by the EDQM. This 
database  contains  details  about  certified  API  manufacturers  and  their  production  sites.  According  to 
EDQM estimates, a significant proportion of manufacturers utilise the CEP procedure for substances 
with European Pharmacopoeia monographs. For older substances, such as paracetamol, this figure can 
exceed 95%. 

(61)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

(62)  Ibid.  

24 

 
 
intermediates can  lead  to  lower  production  costs  (63).  The  Structured  Dialogue  also 
emphasised  that  European  manufacturers  tend  to  focus  on  specific  APIs  (e.g.  low 
production  volumes,  complex  production  processes)  but  technical  know-how  and 
capacities  to  increase  European  API  production  are  still  available.  Nevertheless,  some 
technologies  used upstream  in  the manufacturing chain  of medicines may no longer be 
available  in  Europe.  This  high  dependency  on  non-EU  countries  for  API  production 
therefore exposes to disruptions resulting from external factors such as trade interruptions. 

The vulnerability assessment pilot confirmed the significant dependences on non-EU API 
suppliers,  with  a  high  vulnerability  of  4  out  of  11  substances  due  to  reliance  on  API 
manufacturing outside the EU. 

Lack of diversification and market concentration 

The  exploratory  study  in  view  of  a  CMA  identified  five  distinct  manufacturers  (or 
manufacturing  facilities)  for  each  API  used  for  production  of  critical  medicines  on  the 
Union list of critical medicines in average (median value). Nevertheless, a certain degree 
of concentration can be observed, with the number of manufacturers ranging from one to 
as many as thirty-five. Each API is produced in an average of three countries, again with 
significant variations (from one to nine different countries) (64).  

Reliance on a sole or limited number of suppliers, especially when they are in one single 
geographical  region  can  pose  significant  supply  risks,  especially  if  the  capacity  to 
manufacture  the  products  in  question  is  not  readily  available  in  the  EU.  In  case  of 
manufacturing or quality issues affecting a single source supplier, production cannot be 
quickly taken over by another supplier. Similarly, market cessation or withdrawal would 
result in a shortage in absence of alternative supplier.  

According to the vulnerability assessment pilot analysis, the level of diversification varies 
significantly  from  one  critical  medicine  to  another.  Nevertheless,  the  diversification  of 
manufacturing sites is not sufficient to ensure the resilience of supply chains given that a 
significant proportion of the production might come from a limited number of producers. 
In this respect, the vulnerability assessment pilot analysis highlighted that for all the critical 
medicines investigated,  over 30% of their supply was  coming from a single country or 
manufacturer, underscoring a risk of vulnerability. This concentration of production also 
increases the risk of supply chain disruption due to geopolitical issues, trade restrictions, 
or production problems.  

Increased complexity and specialisation of pharmaceutical supply chains 

The  increased  complexity  of  pharmaceutical  supply  chains  coupled  with  a  trend  of 
specialisation can also make them vulnerable (65). While the production of older chemical 
medicines  often  involves  several  manufacturers,  the  supply  chain  of  innovative  and 
biological  medicines  tends  to  be  more  integrated.  Complex  and  novel  innovative 

(63)  Commission  Staff  Working  Document  on  vulnerabilities  of  the  global  supply  chains  of  medicines, 

October 2022 

(64)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

(65)  Commission  Staff  Working  Document  on  vulnerabilities  of  the  global  supply  chains  of  medicines, 

October 2022 

25 

 
 
manufacturing  processes  of  innovative  medicines  pose  specific  challenges  such  as  the 
difficulty of dual sourcing or to make manufacturing adjustments. As a result, restoring 
supply after temporary disruption or  a  manufacturing  issue might  take significant  time. 
Ramping up production in response to increased demand would also be more difficult than 
for chemical medicines.  

Fragmented procurement practices and pricing policies  

Overall,  generic  competition  and  Member  States  procurement  practices  have  a  positive 
impact  on  the  affordability  and  availability  of  medicines.  In  markets  with  multiple 
suppliers, competition may lead to diverse and more resilient supply chains. 

While price competition for off-patent medicines improves affordability and availability 
of  medicines  for  patients,  pharmaceutical  firms  may  adapt  production  technologies  and 
supply chains to maximise profits by reducing production costs, for example, relocating 
production to non-EU countries. Some of the industry’s measures to maximise profits may 
have effects on the resilience of supply chains.  

For example, in the short-run, profit maximising firms may choose to produce products 
with the highest profits leading to undersupplied markets or not supplied markets at all. As 
a  result  in  the  short  run,  this  can  lead  to  less  resilience  due  to  less  suppliers  in  certain 
markets,  i.e.  higher  market  concentration (66).  Generally,  in  the  long-run,  entry  of  new 
suppliers can be expected to fill the gaps in the supply chain. However, in certain cases, 
investments to enter a market may not be profitable to sustain entry. 

Another  example  shows,  as  suggested  by  the  study  on  medicines  shortages (67),  that 
national  procurement  practices  can  have  an  impact  on  short-term  supply  shocks.  For 
example,  “winner-takes-all”  tenders,  whereby  the  winning  bidder  becomes  the  sole 
supplier to a market for a given period for a specific medicine, may reduce the number of 
firms in the market. Losing tenderers may decide to stop production (and potentially  to 
withdraw from other markets or not renew the marketing authorisation) for that medicine 
altogether  as  their  market  share  has  become  too  small  to  be  economically  attractive  or 
viable. In the short run, this again can have the effect of thinning out competition, leaving 
the market dependent on a single or only a few suppliers and leaving society vulnerable to 
supply shocks, for example, due to production problems. 

Nevertheless, it is also important to distinguish between generic medicines and innovative 
medicines. Some of the market dynamics which are observable for generic medicines do 
not necessarily apply to innovative medicines.  

Limited market size and other external factors  

Issues  with  availability  of  certain  medicines  can  be  due  to  the  size  of  the  targeted 
population or limited intended use of the medicine. Limited attractiveness of the market is 
as a key barrier encountered in several countries (68), in particular for small countries. Due 
to their size, these markets are often considered as less attractive by the pharmaceutical 

(66)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

(67)  Future-proofing pharmaceutical legislation - Publications Office of the EU 

(68)  Study on Best Practices in the Public Procurement of Medicines, September 2022 

26 

 
 
industry, leading to significant delays or even no access to potentially lifesaving treatments 
for patients. Moreover, these countries, frequently may have a more limited negotiating 
power, eventually resulting also in higher prices for innovative treatments.  

More recently, the potential impact of certain national contingency stock requirements on 
the  availability  of  medicines  in  other  Member  States  has  also  been  raised  by  certain 
stakeholders, including some Member States (69).  

3.4. How likely is the problem to persist? 

Based on the analysis of the problems and drivers (see sections 3.1 and 3.3), without action, 
it is highly likely that medicines shortages will continue to be a significant issue in  the 
absence of additional preventive measures to reinforce the resilience of supply chains of 
critical medicines and reduce our dependencies on third countries. The number of reported 
shortages has been progressively increasing over the past decade. Shortages are attributed 
to  various  factors,  including  supply  chain  vulnerabilities  and  external  factors,  which 
require  long-term  structural  changes  to  address  effectively.  In  addition  to  monitoring 
measures included in EMA’s extended mandate (Regulation (EU) 2022/123), the proposed 
extension of systems and processes to mitigate and manage critical shortages and improve 
the  supply  security  of  critical  medicines  is  set  out  in  the  proposed  revision  of 
pharmaceutical  legislation,  with  a  focus  on  regulatory  measures.  These  regulatory 
measures are expected to support the security of supply of critical medicines by requiring 
companies  to  hold  shortage  prevention  plans,  establishing  the  Union  list  of  critical 
medicines, assessing the supply chain vulnerabilities, empowering the MSSG to provide 
targeted recommendations to the relevant stakeholders and empowering the Commission 
to take additional measures. Nevertheless, these measures should be complemented by an 
industrial  policy  toolbox  combining  measures  to  support  increased  investment  in  EU 
manufacturing capacity (push measures) and measures incentivising and rewarding supply 
chain resilience and diversification (demand side measures). These measures are required 
to address the identified supply chain vulnerabilities, reverse the current trend related to 
the  decreasing  number  of  suppliers  of  critical  medicines  and  the  overreliance  on  third 
country  suppliers  for  the  production  of  their  active  substances  but  also  to  ensure  that 
procurement  practices  adequately  take  into  account  the  security  of  supply  of  critical 
medicines.  

Similarly for other medicines of common interest, the identified problem and related driver 
(see  sections  3.2  and  3.3)  are  expected  to  persist  without  targeted  measures  to  further 
support their accessibility and availability.  

(69) Employment, Social Policy, Health and Consumer Affairs Council (Health), 21 June 2024 

27 

 
 
 
 
4.  CONSULTATION AND USE OF EXPERTISE  

A rich evidence base and extensive stakeholder input concerning medicine shortages and 
critical medicines have been gathered and analysed in preparation for the revision of the 
pharmaceutical  reform.  The  Critical  Medicines  Act  proposal  was  preceded  by 
comprehensive  consultations  with  stakeholders  through  the  Structured  Dialogue  on  the 
security  of  medicines  supply (70)  and  in  the  Critical  Medicines  Alliance (71).  The 
evaluation of the EU pharmaceutical legislation (72) highlighted that medicine shortages 
are an increasing problem in the EU and that they have grown worse since the COVID-19 
pandemic. Overall, there has been a marked increase in the number of reported shortages 
across  the  EU.  These  shortages  are  placing  a  significant  burden  on  health  systems  and 
health professionals, putting patients at risk of sub-optimal care and health systems at risk 
of higher healthcare costs (73).  

In  February  2021,  the  Commission  consulted  stakeholders  in  a  structured  dialogue  on 
security of medicines supply (74). Participants in this dialogue included: (i) actors in the 
supply  chains  of  critical  medicines;  (ii)  public  authorities;  (iii)  patient  and  health  non-
governmental  organisations;  and  (iv) the  research  community.  This  dialogue  further 
deepened the understanding of the complexity of global pharmaceutical supply chains.  

These  consultations  also  explored  the  stakeholders’  view  on  this  topic (75).  These 
consultations  confirmed  that  stakeholders  (in  particular,  civil  society  organisations  and 
healthcare professionals) see medicine shortages as a crucial issue. In the targeted surveys, 
civil society, public authorities and health service stakeholders considered that the area that 
legislation was the least effective in addressing was issues related to security of supply and 
medicine  shortages.  They  also  gave  their  view  on  policy  measures,  such  as  shortage 
prevention plans, a shortage monitoring system at EU level or the shortage notification. 
Furthermore, a dedicated validation workshop was held on supply chains in April 2022. 
During  this  workshop,  various  stakeholders  explained  that  diversification  of  the  supply 
chain  is  challenging  and  not  always  feasible  due  to  the  difficulty  of  finding  alternative 
suppliers upstream in the supply chain (76).  

Furthermore, the preparatory work on the Critical  Medicines  Act  proposal  included the 
consultation  of  relevant  stakeholders  through  the  Critical  Medicines  Alliance,  the 
publication  of  a  call  for  evidence  as  well  as  a  survey,  targeted  consultations  and  other 
outreach activities in the context of a supporting study. Stakeholders feedback on the Call 
for Evidence has been analysed and duly taken into account during the preparation of the 
proposal.  The  aim  of  the  consultation  strategy  was  to  receive  input  from  relevant 

(70)  Structured dialogue on security of medicines supply - European Commission 

(71)  Critical Medicines Alliance - European Commission 

(72)  Reform of the EU pharmaceutical legislation - European Commission 

(73)  Future-proofing pharmaceutical legislation - Study on medicine shortages, 2021 

(74)  The list of organisations can be consulted here  

(75)  Reform of the EU pharmaceutical legislation - European Commission 

(76)  See  Annex  2  synopsis  report  (stakeholder  consultation)  for  the  reform  of  the  EU  pharmaceutical 

legislation. 

28 

 
 
stakeholders throughout the pharmaceutical manufacturing and distribution chain, as well 
as citizens, patients, public administrations and healthcare providers.  

4.1. Critical Medicines Alliance  

More than 300 stakeholders of critical medicine supply chains, as members of the Critical 
Medicines  Alliance  that  includes  industry  representatives,  trade  associations,  patient 
organisations, medical profession organisations and Member States, have been consulted 
on key topics of interest for critical medicines’ supply chain strengthening. After the launch 
of the Alliance in 2024, technical discussions took place at working group level throughout 
the rest of the year.  Specifically, the Steering Board of the Alliance, the main governing 
body  that  includes  representatives  of  the  trio  of  current  Council  presidencies, 
representatives from five pharmaceutical associations and two civil society groups, created 
two Working Groups, one on incentives to strengthen manufacturing capacity in the EU 
while the second looked at diversification of supply chains through partnerships with like-
minded  non-EU  countries.  Each  working  group,  further  subdivided  into  subgroups  and 
taskforces,  met  on  a  regular  basis  over  2024  to  discuss,  at  expert  technical  level  key 
challenges and considerations on topics and objectives of the working groups. Together, 
the  subgroup/taskforces  created  specific  recommendations  for  the  consideration  of  the 
Steering  Board.  The  results  of  these  recommendations,  endorsed  and  compiled  by  the 
Steering Board in its Strategic Report (77), provide for actions on vulnerability assessment, 
incentives for investments in manufacturing capacity, contingency stocks and procurement 
approaches, as well as leveraging partnerships with non-EU countries. In particular, the 
Alliance recommended: (i) establishing a European list of Critical Vulnerable Medicines; 
(ii)  implementing  a  European  Investment  plan  to  strengthen  production  capacities  for 
critical  medicines in  Europe by  combining  EU funding  programmes and State aid;  (iii) 
implementing  a  comprehensive  harmonised  and  balanced  framework  on  contingency 
stocks; (iv) promoting virtuous public procurement practices by means of applying specific 
‘MEAT’  criteria (78)  and  making  further  use  of  joint  procurement;  and  (v)  promoting a 
level  playing  field  for  environmental  and  social  standards,  as  well  as  fair  competition 
between  critical  medicines  manufactured  in  the  EU  and  in  the  rest  of  the  world.  On 
partnerships with non-EU countries, the Alliance specifically recommended making use of 
the  developed  methodology  to  assess  the  prospects  of  countries  for  different  types  of 
partnerships.  

Finally,  the  Alliance  recommended  that  the  MSSG  (Executive  Steering  Group  on 
Shortages and Safety of Medicinal Products) formalises the possibility for outreach to non-
EU country jurisdictions, as part of the Voluntary Solidarity Mechanism (79). 

(77)  Critical Medicines Alliance - European Commission 

(78)  Most  economically  advantageous  tender  which  allows  for  more  prominence  to  be  given  to  quality 

beyond price considerations alone.  

(79)  A summary of the Strategic Report’s main recommendations can be found in Annex 1.  

29 

 
 
4.2. Call for Evidence 

A general consultation on the proposed Regulation was launched in a Call for Evidence 
that  was  published  on  30  January  2025 (80).  The  Call  for  Evidence  took  place  from  30 
January to 27 February 2025 (81). The document was published on the Better Regulation 
portal  of  the  European  Commission  (also  known  as  ‘Have  Your  Say’  Portal),)  to  give 
stakeholders an opportunity to comment on the need for action and the envisaged initiative; 
and to provide input on any further issues to be considered when developing this policy 
field. 

The  Commission  received  121  valid  contributions  to  the  Call  for  Evidence  request, 
submitted by business associations (26%), company/businesses (25%), non-governmental 
organisations  (22%),  EU  citizen  (5%),  public  authorities  (5%),  trade  unions  (4%), 
consumer organisations (2%), academic/research institutions (1%), and other (9%).  The 
chart below shows the share of responses by the various stakeholders’ groups. 

Figure 9 – Categories of respondents  

A  majority  of  the  responses  received  were  submitted  by  business  associations  and 
companies,  though  NGOs  and  consumer  organisations  also  accounted  for  a  significant 
share of replies. The responses came from 22 countries (including 5 non-EU countries). 
Among  these,  Belgium  was  the  most  represented  (32%)  as  most  European  business 
associations and civil society organisations are headquartered in the country, followed by 
Germany (15%), France (7%), Italy (6%) and Spain (5%). 

A  broad  majority  of  the  responses  supported  the  Commission  in  tabling  a  Critical 
Medicines Act, seeing it as a crucial tool to  prevent shortages of critical  medicines. To 
highlight  some  key  considerations,  the  various  stakeholders’  groups,  companies  and 
business associations noted the persistent dependencies on non-EU suppliers, particularly 
for active pharmaceutical ingredients (APIs), and the resulting increased risk of medicine 
shortages.  They welcomed the European Commission's commitment to  securing supply 

(80)  Critical Medicines Act 

30 

 
 
 
 
chains, and call for a comprehensive legal framework, promoting EU-based production of 
APIs, coupled with improved access to funding mechanisms.  

To ensure transparency, accountability and efficiency, many NGOs proposed regular risk 
assessments  and  vulnerability  analysis  of  the  pharmaceutical  supply  chains  and  a 
coordinated  monitoring  system  taking  into  account  existing  national  systems  to  avoid 
duplications.  

Public  authorities  in  particular  supported  the  voluntary  joint  procurement  of  critical 
medicines.  Responses  from  various  stakeholder  groups  noted  the  need  to  address 
fragmentation  stemming  from  national  stockpiling  requirements.  There  was  also  wide 
support on the importance of global partnerships to maintaining robust supply chains. 

4.3. Targeted consultations  

This  evidence  gathering  process  was  complemented  by  targeted  consultations  through 
exploratory and targeted interviews and through targeted surveys (82) in the context of the 
supporting study.  

Between August and September 2024, a total of 11 exploratory interviews were conducted 
with  key  stakeholders  with  experience  and  knowledge  relevant  to  critical  medicines 
shortages. The primary objective was to further expand the overall understanding of the 
context of the study.  

These exploratory interviews were conducted with key stakeholders from the following 
groups: EU institutions and agencies; national authorities; producer and suppliers; NGOs; 
and international organisations.  

Targeted interviews were subsequently conducted in two different rounds. In the first part, 
these interviews mainly served to enhance the knowledge gathered through desk research 
and to collect stakeholders’ view in particular on the problem drivers. In the second part, 
the information gathered through the interviews was used to complement the information 
collected through a targeted survey by providing possible quantification of the anticipated 
economic impacts.  

The targeted interviews comprised 17 interviews in the first round, primarily contributing 
to study objective 1 (establishing an up-to-date understanding of the main problem drivers 
for  critical  medicine  shortages),  and  informing  objective  2  (establishing  a  dynamic 
baseline by providing an overview of the status-quo at EU or MS level) and objective 3 
(identifying  policy  options  to  reduce  shortages  of  critical  medicines  in  the  EU).  These 
interviews aimed to validate the problem tree, substantiate problem drivers and develop 
the baseline scenario, assess drivers by importance qualitatively, gauge policy measures to 
address drivers, and identify additional sources or contacts for analysis.  

All targeted stakeholder interviews contained a combination of questions applicable to all 
interviewees and more in-depth questions that could be answered by specific stakeholder 
groups.  During  the  second  round  of  interviews  two  interview  guides  were  used:  one 
tailored to stakeholders from the pharmaceutical industry, and another tailored to public 
authorities.  

(82)  Ibid.  

31 

 
 
The second round of interviews comprised 13 targeted interviews. This set of interviews 
was  mainly  used  to  support  the  quantification  of  the  economic  impacts  and  targeted 
primarily two sets of stakeholders: pharmaceutical companies and public authorities. 

The targeted surveys targeted five stakeholder groups separately with a primary focus on 
the  identification  and  assessment  of  the  expected  significant  economic,  social,  and 
environmental impacts of the policy options. Additionally, the surveys were intended to 
contribute to further validating and substantiating the analysis of the main problem drivers. 
Similarly, they were intended to provide quantitative insights for the baseline and further 
contributed to the overall market analysis of critical medicines.  

4.4.  Other sources of evidence 

Different other sources of evidence taken into account by the Commission, such as, for 
example,  the  Study  on  best  practices  in  the  Public  Procurement of  Medicines  (83),  are 
referred to in the specific context where they are relevant. 

5.  MAIN MEASURES OF THE LEGISLATIVE PROPOSAL  

5.1. Objectives of the proposal  

In light of the current geopolitical situation and the importance of a viable European based 
pharmaceutical industry for the EU’s economic security, the proposed Regulation aims to 
complement the measures proposed in the revision of the EU pharmaceutical legislation in 
order  to  address  the  supply  chain  vulnerabilities  of  critical  medicines  and  support  the 
security of supply and availability of these medicines.  

The scope of the proposed Regulation is primarily focused on critical medicines on the 
Union List of Critical Medicinal Products which is formally established in the proposed 
pharmaceutical Regulation.  

The proposed Regulation also introduces non-regulatory actions to improve access to and 
availability of medicines of common interest, to ensure patients across the EU can benefit 
from  these  medicines  when  and  where  they  need  them.  These  medicines  can  include 
medicines for rare diseases (orphan medicinal products) (84) or novel antimicrobials.  

The general  objective of this Regulation  is  to  strengthen the security  of supply  and the 
availability of critical medicines within the EU, thereby ensuring a high  level of public 
health protection and supporting the security of the Union, and to improve the availability 
and accessibility of other specific medicines, where the functioning of the market does not 
otherwise sufficiently ensure their availability and accessibility to patients, whilst giving 
due consideration to the appropriateness to ensure the affordability of medicinal products.  

The specific objectives of the initiative are:  

− 

to  facilitate  investments  in  manufacturing  capacities  for  critical  medicines,  their 
active substances and other key inputs in the EU;  

(83)  Study on Best Practices in the Public Procurement of Medicines, September 2022 

(84)  Orphan medicinal products - European Commission 

32 

 
 
− 

− 

− 

to lower the risk of supply disruptions and strengthen availability by incentivising 
supply  chain  diversification and resilience in  the public procurement procedures 
for critical medicines and other medicinal products of common interest; 

to  leverage  the  aggregated  demand  of  participating  Member  States  through 
collaborative procurement procedures; and, 

to support the diversification of supply chains also by facilitating the conclusion of 
strategic partnerships. 

5.2. Choice of the legal instrument and legal basis  

The proposal takes the form of a Regulation of the European Parliament and of the Council. 
The selection of a Regulation over a Directive is driven by the need for immediate and 
uniform application across the EU and supported by the assessment of proportionality of 
the EU intervention. This choice ensures legal certainty by minimising the risk of divergent 
interpretations  and  implementations  by  Member  States.  In  addition,  the  cross-border 
implications  of  the  legislation  require  a  cohesive  and  consistent  approach,  achievable 
through a Regulation.  

The proposal is based on Article 114 of the Treaty on the Functioning of the European 
Union  (TFEU),  as  the  measures  it  introduces  aim  to  ensure  smooth  functioning  of  the 
internal  market.  The  proposal  also  has  important  public  health  objectives  and  Article 
114(3) TFEU integrates considerations related to ensuring a high level of health protection. 

5.3. EU added value / necessity for EU action  

The objectives of this proposal cannot be sufficiently achieved by Member States acting 
individually,  as  the  challenges  of  medicine  shortages  and  supply  chain  vulnerabilities 
extend  beyond  national  borders.  In  addition,  uncoordinated  Member  States  efforts  may 
undermine  the  smooth  functioning  of  the  internal  market.  EU-level  action  is  needed  to 
ensure a coordinated and effective response to these cross-border issues. 

The  proposal  takes  into  account  this  principle  in  the  design  of  the  individual  actions, 
particularly when procuring critical medicines and other medicinal products of common 
interest. 

The proposal targets critical medicines for which there is a demonstrated need to intervene, 
and the selected intervention can lead to  an effective reduction in the risk of shortages. 
Specific measures also apply to other medicines of common interest affected by market 
access issues in Member States.  

5.4.  Complementarity  with  other  EU  legislative  initiatives  on  medicine 

shortages  

To improve the security of supply and availability of medicines, including those of critical 
medicines, the EU has implemented several measures in the recent years. Regulation (EU) 
2022/123  has  strengthened  the  EMA’s  role  in  monitoring  of  events  and  coordinated 
prevention  and  mitigation  of  medicine  shortages  in  preparation  for  and  during  crisis 
situations. The establishment of EMA’s Medicines Shortages Steering Group (MSSG) and 
the  Medicine  Shortages  Single  Point  of  Contact  working  party  (SPOC  WP)  aims  to 
enhance crisis preparedness and response but also monitoring of supply and demand of 
medicines considered as critical in the context  of a public health emergency or a major 
event. Launched in February 2025, the European Shortages Monitoring Platform (ESMP) 

33 

 
supports data collection and monitoring of medicines supply and demand under different 
MSSG-led preparedness and during crisis situations.  

In addition, the proposed revision of the EU pharmaceutical legislation, currently under 
discussion  by  the  co-legislators,  includes  new  obligations  to  support  prevention  and 
mitigation  of  medicines  shortages  and  strengthen  the  security  of  supply  of  critical 
medicines at all times. Proposed measures include:  

− 

− 

− 

− 

− 

− 

− 

the  reinforcement  of  obligations  on  marketing  authorisation  holders  (MAHs)  to 
share information with authorities, incl. early notification of shortages, temporary 
suspension as well as market cessation and permanent withdrawal; 
the  obligation  for  MAHs  to  prepare  shortage  prevention  plans  (SPP)  for  all 
medicines;  
the definition of the roles and responsibilities of NCAs and EMA in relation to the 
monitoring of shortages and coordination of responses to manage critical shortages; 
the identification and management of critical medicines via the establishment of a 
Union  list  of  critical  medicines  (based  on  a  common  EU  methodology  which 
includes the vulnerability assessment of supply chains (85)); 
the  extension  of  the  scope  of  the  ESMP,  including  to  support  the  notification 
obligations and data exchange on stock, supply and demand data;  
the provision of MSSG recommendations to address critical shortages and ensure 
security of supply of critical medicines; and,  
the  possibility  for  the  EC  to  take  additional  measures  to  ensure  the  security  of 
supply of critical medicines, including by imposing EU wide contingency stocks 
requirements.  

The dedicated expert groups (MSSG and SPOC Working Party) formally established under 
the EMA mandate  extension  have  already  demonstrated an improved  collaboration and 
communication between the relevant stakeholders. Their mandates are extended beyond 
public health emergencies and major events under the proposed pharmaceutical legislation. 
The extension of established systems and processes and introduction of new measures will 
support early identification, prevention and mitigation of potential medicines shortages, 
including  of  critical  medicines,  through  improved  monitoring  and  coordination. 
Furthermore, the proposed pharma package  legally  establishes the  Union list  of critical 
medicines  and  will  contribute  to  a  better  understanding  of  supply  chains  of  critical 
medicines, which is a precondition to reinforce supply chain resilience, by imposing an 
obligation on MAHs to provide relevant data. In this respect, Shortage Prevention Plans 
are an essential tool to support the assessment of supply chain vulnerabilities. These are 
complemented  by  additional  obligations  for  MAHs  and  other  actors  to  provide  the 
necessary  information  to  the  authorities.  Without  this  obligation,  competent  authorities 
rely of pharmaceutical companies to voluntarily provide the relevant data as emphasised 
in the vulnerability pilot performed on 11 molecules.  

Nevertheless,  while those measures provide much needed  regulatory  replies to  mitigate 
and prevent shortages and reinforce the security of supply of critical medicines, they should 

(85)  According  to  the  proposed  revision  of  the  EU  pharmaceutical  legislation,  the  European  Medicines 
Agency (EMA) will be tasked to develop this common EU methodology in collaboration with Member 
States. This work has already been initiated by EMA, in cooperation with MSSG members, and will take 
into  consideration  previous  initiatives,  including  the  vulnerability  assessment  pilot  conducted  by  the 
Commission and the recommendations of the Critical Medicines Alliance.  

34 

 
 
be complemented by industrial policy tools to act on upstream vulnerabilities in the supply 
chains with the main goal to reduce the number of shortages and their impact. The purpose 
of the Critical Medicines Act is to establish these complementary tools.    

5.5. 

Intervention logic of the proposal 

Figure 10 – intervention logic diagram  

5.6. Description of the proposed measures (preferred option) 

The proposed Regulation puts forward an industrial policy toolbox to address supply chain 
vulnerabilities  and  reinforce  the  resilience  of  supply  chains  of  critical  medicines.  In 
addition,  it  contains  specific  measures  that  are  also  relevant  to  improve  access  and 
availability of other medicines of common interest.  

In order to  avoid  duplications and  divergence during the negotiation process,  the CMA 
proposal  relies  on  certain  concepts,  definitions  and  processes  already  introduced  in  the 
proposed pharmaceutical package:  

- 

In terms of scope, as regards the critical medicinal products, the proposed Act refers 
to  the  Union  list  of  Critical  Medicines  envisaged  under  the  proposal  for  the 
pharmaceutical  legislation.  The  proposed  pharmaceutical  Regulation  introduces 
the concept  of the Union List of  critical  medicines, as  well as  the  processes for 
adoption and review. This Union list should be prepared based on a common EU 
methodology which will incorporate the evaluation of supply chain vulnerabilities.  

-  Specific measures  of the proposed  Act require the completion of  a vulnerability 
evaluation.  This  vulnerability  evaluation  builds  on  the  one  outlined  in  the  new 
pharmaceutical  legislation.  The  proposed  pharmaceutical  Regulation  already 
outlines the data collection process, common EU methodology and implementation 
of  the  vulnerability  evaluation.  The  CMA  proposal  will  look  at  EU  level 

35 

 
 
 
 
vulnerabilities. It also mandates the Critical Medicines Coordination group (CMG) 
to provide advice to the MSSG on the prioritisation, review or update of critical 
medicines for the vulnerability evaluation. 

In  addition,  the  CMA  proposal  complements  the  regulatory  measures  on  access  to 
medicines that are included in the proposed pharmaceutical legislation to further support 
access to and availability of other medicines of common interest.  

The proposed Act also includes the possibility for the Commission or national authorities 
to request the information necessary for the application of the Regulation from marketing 
authorisation holders and other actors in the supply and distribution chain of the medicines 
in  scope  of  the  Regulation,  whilst  avoiding  duplication.  This  may  include  certain 
information on supply chain vulnerabilities, if not available under the reform of the general 
pharmaceutical legislation, information needed for the application of different measures of 
the proposal or necessary for the purpose of its evaluation.  

The CMA proposal is articulated around four pillars:  

-  Strategic projects to facilitate investments in manufacturing capacity in the EU 

-  Public procurement to incentivise supply chain resilience and diversification  

-  Collaborative  procurement  to  leverage  the  aggregated  demand  of  the  Member 

States 

-  Strategic partnerships to support supply chain diversification  

While  the  four  pillars  of  the  CMA  proposal  are  applicable  to  critical  medicines,  only 
specific measures are  considered as relevant  to  ensure  increased access  and availability 
other  medicines  of  common  interest,  namely  certain  demand-side  measures  related  to 
public procurement and collaborative procurement.  

5.6.1. Enabling conditions for investment  

To address EU dependencies on third countries for the production of critical medicines and 
their  active  substances  identified  as  a  problem  driver  under  section  3.3,  the  necessary 
conditions to support investments in manufacturing capacities in the EU should be put in 
place.  

Criteria and procedure for the recognition of strategic projects  

The  proposed  Regulation  includes  the  recognition  of  industrial  projects  that  create, 
increase  or  modernise  EU  manufacturing  capacity  of  critical  medicines,  their  active 
substances and other key inputs as strategic projects.  

To be considered as a strategic project, an industrial project needs to meet at least one the 
following criteria:  

a)  it creates or increases manufacturing capacity for one or more critical medicinal 

products or for collecting or manufacturing their active substances;  

b)  it  modernises  an  existing  manufacturing  site  for  one  or  more  critical  medicinal 
products  or  their  active  substances  to  ensure  greater  sustainability  or  increased 
efficiency;  

36 

 
c)  it  creates  or  increases  manufacturing  capacity  for  key  inputs  necessary  for  the 
manufacturing of one or more critical medicinal products or their active substances; 
or,  

d)  it contributes to the roll-out of a technology that plays a key role in enabling the 
manufacturing of one or more critical medicinal products, their active substances 
or key inputs.   

These  criteria  are  broad,  covering  a  wide  spectrum  of  industrial  projects  that  create  or 
increase  EU  manufacturing  capacity  not  only  of  critical  medicines  but  also  their  active 
substances and other key inputs. 

In terms of recognition  procedure, the proposed Regulation relies on  existing structures 
and processes to avoid unnecessary delays and the creation of additional administrative 
layers, such as a one-stop shop at national or EU level. A decentralised approach for the 
recognition  of  strategic  projects  at  national  level  whereby  a  project  promotor  can  go 
directly to the relevant authority to request a specific benefit was therefore retained. When 
receiving such request, the concerned authority will be required to verify compliance with 
one of the criteria defined in Article 5. If needed, this authority can request confirmation 
that the criteria are met to a designated authority. Member States are required to identify 
such designated authority and inform the Commission.  

Facilitating administrative and permit-granting processes 

National permit-granting processes can be unpredictable and, in certain cases, excessively 
lengthy,  undermining  the  planning  and  investment  security  needed  for  an  effective 
development  of  new  manufacturing  projects  in  the  EU.  The  proposed  Regulation 
introduces  several  enabling  measures  to  ensure  the  timely  implementation  of  strategic 
projects.  

First  of  all,  strategic  projects  are  considered  to  be  in  the  public  interest,  meaning  that 
Member States shall ensure permit granting processes are carried out in the fastest way 
possible. This priority status will ensure the fast-tracking of permit-granting procedures at 
national level, in particular considering any form of accelerated procedures that exist in 
applicable  Union  and  national  law.  This  can  include  digital  submission  of  required 
information. When provided for in national law, project promotors may also request the 
status  of  the  highest  national  significance  and  the  application  of  urgency  procedure  for 
dispute resolution.  

Strategic projects may also receive, upon request, administrative, regulatory and scientific 
support  from  Member  States,  with  particular  attention  for  SMEs.  The  administrative 
support covers not only the permit-granting process but also compliance with applicable 
administrative and regulatory obligations. Regulatory support by Member State includes 
the  prioritisation  of  GMP  inspections  for  new,  extended  or  modernised  manufacturing 
sites. Finally, the proposed Regulation includes the possibility to request scientific advice 
by  the  European  Medicines  Agency  on  innovative  manufacturing  processes  for  active 
substances,  critical  medicinal  products  and  key  inputs  that  can  increase  manufacturing 
efficiency and reduce manufacturing costs through digitalisation and automation. This is 
an  area  where  the  EU  could  lead  and  have  a  competitive  advantage  compared  to  third 
countries.  It  is  proposed to  establish a mechanism  whereby EMA  can  assist  and advise 
project  promoters  of  innovative  technologies  and  manufacturing  processes  for  critical 
medicines and their active substances.  

37 

 
One reason that can lead to unpredictable timelines of permit-granting procedures is that 
the procedure for performing the necessary environmental assessments is not consistently 
implemented, within and across Member States,  especially regarding timing.  The CMA 
proposal includes the possibility for coordinated or joint environmental assessments upon 
request by a project promotor under defined timelines, which typically are the procedures 
that can take the longest during permitting.  

The  CMA  approach  therefore  rests  on  a  large  procedural  margin  for  organising  the 
environmental  assessments  granted  inter  alia  in  the  Environmental  Impact  Assessment 
Directive, through the possibility of performing joint or coordinated assessments, when the 
obligation to perform such an assessment arises simultaneously. Given that this possibility 
already exists under the CMRA and NZIA, Member States will be able to rely on similar 
procedures  to  ensure  accelerated  environmental  assessment  of  strategic  projects. 
Furthermore,  these  strategic  projects  may  be  considered  to  have  an  overriding  public 
interest with regards to environmental impacts in a series of environmental legislations.  

Finally,  authorities  shall  consider  including  provisions  for  development  of  strategic 
projects in planning (zoning, spatial plans, land use plans).  

Financial incentives  

The proposed Regulation covers funding opportunities at national and EU level.  

At national level, Member States may prioritise strategic projects that address an identified 
vulnerability  in  the  supply  chain  of  a  critical  medicine.  Undertakings  that  benefit  from 
financial support shall prioritise supply to Member States and use their very best efforts to 
ensure that the critical medicine concerned remains available in the Member States where 
it is being marketed. The Member State that provides the financial support to a strategic 
project may submit a request, on its own behalf or on behalf of another Member State that 
encounters a threat of shortages of the critical medicine in question, to the undertaking to 
provide the necessary supplies of a critical medicine, active substance or key inputs, as 
applicable, to the Union market to avoid shortages in one or several Member States.  

At EU level, the proposed Regulation focuses on funding opportunities under the current 
Multiannual Financial Framework (MFF) given it is not possible to pre-empt the results of 
the political  negotiations on the future  budget  of the European Union.  Under the 2021-
2027  MFF,  strategic  projects  may  be  supported  by  EU  funding  programmes,  including 
EU4Health, Horizon Europe, Digital Europe Programme if the applicable requirements are 
met. The Legal Financial Digital Statement of the proposal provides for a total of EUR 80 
million for the period 2026-2027 to finance manufacturing investments and manufacturing 
capacity through grants under the EU4Health programme.  

In  addition,  the  CMA  proposal  amends  Regulation  2024/795  establishing  the  Strategic 
Technologiesfor Europe  Platform  (STEP) which  aims to  support the European industry 
and boost investment  in  critical  technologies in  Europe  by raising and steering funding 
across  11  EU  programmes  to  three  target  investment  areas:  a)  digital  technologies  and 
deep-tech innovation; b) clean and resource-efficient technologies and c) biotechnologies, 
including critical medicines. This aims to allow facilitated financial support to strategic 
projects addressing a supply chain vulnerability.  

These strategic projects addressing a supply chain vulnerability shall be deemed to fulfil 
the STEP objectives, which in turns facilitates the awarding of the STEP sovereignty seal 
through  existing  EU  funding  programmes  such  as  the  EU4Health  programme.  The 

38 

 
possession of the STEP sovereignty seal will facilitate strategic projects’ access to shared 
management funds such as the Cohesion funds. Indeed, they may be fast-tracked (direct 
award possibility) under Cohesion policy funds (ERDF, ESF+) and must be considered as 
a priority for funding under national Recovery and Resilience Plans (RRF). In addition, 
strategic  projects  that  obtained  the  STEP  sovereignty  seal  can  receive  cumulative  or 
combined  funding  from  other  Union  programmes,  including  funds  under  shared 
management.  In order to enhance visibility and help them attract public funding, these 
projects will also be listed on the STEP Portal. Under InvestEU, these projects are to be 
taken  into  account  by  the  Commission  in  its  ‘policy  check’  and  the  project  is  to  be 
examined by implementing partners. These different advantages aim to facilitate access to 
funding for projects that received the STEP sovereignty seal. 

Finally, the coordination of financial support provided at national and EU level to strategic 
projects  will  be  ensured  within  the  Critical  Medicines  Coordination  Group  (CMG)  to 
ensure  synergies  between  the  different  initiatives  and  avoid  duplications  (see  section 
5.6.3).  Given  the  limited  financial  resources,  it  is  essential  that  Member  States  and  the 
Commission coordinate their efforts. This is why the proposal introduces an obligation for 
Member  States  to  inform  the  CMG  about  the  intention  to  provide  financial  support  to 
strategic projects sufficiently in advance, to allow the CMG to carry out its coordination 
task. Similarly, the Commission will have to inform the CMG of the strategic projects that 
benefited from financial support from the Union. In addition, the Commission may inform 
the CMG of the intention to propose the establishment of funding possibilities specifically 
designed to address vulnerabilities in the supply chains or any other programme that may 
benefit  the  availability  of  critical  medicines.  Nevertheless,  this  information  possibility 
needs to comply with the specific rules and conditions of these Union funding programmes, 
that clarifies  the involvement  of Member States and  stakeholders in  these  programmes. 
The  CMA,  while  relying  on  these  mechanisms  for  funding  implementation,  facilitates 
information sharing and national coordination.  

5.6.2 Demand side measures  

Public procurement requirements and related measures  

The Commission study on public procurement of medicines (86) found that most medicines 
are  still  procured  by  lowest  price  with  little  use  of  additional  quality  requirements  or 
criteria.  

The study also found that procurement can be a powerful policy tool to encourage better 
resilience of supply chains and diversified suppliers. This can be done through the use of 
quality requirements and criteria, the use of multiple winner tenders and joint/collaborative 
procurement (87). 

Therefore, the proposed Regulation includes a set of measures that lower the risk of supply 
disruptions  and  strengthen  availability  by  incentivising  supply  chain  resilience  in  the 
public procurement procedures of critical medicinal products and other medicinal products 
of common interest.  

(86)  Study on Best Practices in the Public Procurement of Medicines, September 2022 

(87)  Ibid. 

39 

 
 
First, when procuring critical medicines for the procurement procedures that fall under the 
scope  of  the  Directive  2014/24/EU,  contracting  authorities  will  be  obliged  to  use 
procurement requirements other than price-only award criteria that promote the resilience 
of supply in the Union. The proposal is not prescriptive as to the type of requirements that 
shall be used, (award criteria, selection criteria, tender specifications, contract clauses…), 
the exact criteria to be used, nor the weight that shall be given to these non-price criteria. 
This is intended to keep a level of flexibility depending on the type of medicine procured, 
the  number  of  suppliers,  national  health  setting  etc.  Possible  approaches  are  the  use  of 
stockholding  obligations,  the  number  of  diversified  suppliers,  contract  performance 
clauses  on  timely  delivery,  monitoring  of  supply  chains  and  their  transparency  to  the 
contracting  authorities.  Exceptions  are  possible  where  justified  by  market  analysis  or 
considerations related to the financing of health services.  

Second, specifically for critical medicines where a high dependency on a single or limited 
number  of  suppliers  has  been  demonstrated  through  a  supply  chain  vulnerability 
evaluation, contracting authorities will be obliged, where justified, to apply procurement 
requirements  that  favour  suppliers  that  manufacture  a  significant  proportion  of  these 
critical  medicines  in  the  EU.  This  will  have  to  be  applied  in  compliance  with  the  EU 
international  commitments  and  shall  take  into  consideration  existing  international 
agreements in the field of public procurement. 

Similarly,  for  other  medicines  of  common  interest,  it  will  be  possible  (although  not 
mandatory) to apply similar preference for EU production in public procurement, when 
justified by market analysis and public health considerations and again in compliance with 
the EU international commitments. In both cases, exceptions will also be possible.   

In general, these measures do not exclude the use of additional qualitative requirements, 
including in relation to environmental sustainability and social rights.  

To  complement  these  measures,  Member  States  will  be  required  to  develop  national 
programmes  that  will  cover  public  procurement  practices  to  promote  consistent  use  of 
requirements within a Member State. These will include measures to promote the use of 
multi-winner tenders and potentially also measures related to pricing and reimbursement, 
in order to cover medicines that are not acquired through public procurement. Indeed, not 
all  critical  medicines  reaching  patients  are  purchased  via  public  procurement—for 
example, in many Member States, medicines dispensed in community pharmacies are not 
publicly  procured  but  might  only  be  assigned  a  price  and  reimbursement  status  by  the 
authorities.  To  ensure  these  medicines  are  also  addressed,  national  programmes  may 
incorporate supply security requirements within pricing and reimbursement policies. 

In addition, the Commission will issue guidelines on procurement practices, to support the 
implementation of these measures. The guidelines will build on best practices identified in 
the  context  of  the  cooperation  of  national  competent  authorities  on  pricing  and 
reimbursement  and  public  health  care  payers  (NCAPR)  and  will  detail  procurement 
practices that support availability and security of supply.  

Finally, Member States will have to notify their programmes to the Commission, who will 
distribute  the  programmes  to  the  CMG.  The  Critical  Medicines  Group  will  facilitate  a 
discussion aiming to ensure coordination of national programmes, incl. the application of 
criteria  to  favour  EU  manufacturing  of  critical  medicines  with  high  dependencies.  The 
CMG may issue an opinion on the national programmes, which Member States will need 
to give due consideration and may take into account when revising their programmes. 

40 

 
Contingency stocks  

The proposed regulation includes specific measures with regard to national contingency 
stock requirements and other security of supply measures. Contingency stock requirements 
refer to obligations imposed by Member States on supply chain actors to hold buffer stocks 
of certain medicines to mitigate the risk of supply chain disruptions. This should not be 
confused with the concept of ‘stockpiling’ whereby a (public) health institution owns/buys 
a  certain  stock  to  anticipate  and  manage  specific  crisis  (e.g.  stockpiles  of  medical 
countermeasures related to chemical, biological, radiological and nuclear (CBRN) threats).  

The proposed Regulation introduces an obligation for the Member States to ensure that 
any  such  measures  on  security  of  supply,  does  not  negatively  impact  supply  to  other 
Member  States,  in  particular  when  proposing  and  defining  the  scope  and  timing  of 
contingency stock requirements. 

In  addition,  Member  States  must  ensure  that  contingency  stock  requirements  are 
proportionate and respect the principles of transparency and solidarity. To support Member 
States for the implementation of this measure, the Commission will issue guidelines. When 
preparing  these  guidelines,  the  Commission  will  consider  the  previous  work  and 
discussions that took place in the context of the Pharmaceutical Committee.  

These  measures  complement  the  measures  proposed  in  the  Pharma  Package,  which 
provides  the  possibility  to  impose  EU  wide  contingency  stock  requirements  for  critical 
medicines  (active  pharmaceutical  ingredient  or  finished  dosage  forms)  on  marketing 
authorisation  holders,  wholesale  distributors  or  other  relevant  entities  via  Commission 
implementing acts.  

Collaborative procurements  

Availability  and  access  disparities  exist  for  critical  medicinal  products  and  medicinal 
products  of  common  interest  throughout  the  Union,  disproportionately  affecting  some 
Member  States.  As  the  experience  of  different  cross-country  collaborations  and  the 
COVID-19 vaccines show, collaborative procurement can be a powerful tool to increase 
economies  of  scale,  bargaining  power  and  equal  access  to  medicines (88).  The  Critical 
Medicines Act therefore provides a framework for Member States to request Commission 
support in the use of different collaborative procurement tools for critical medicines and 
other medicines of common interest. 

The relevant provisions build on already existing mechanisms, making available different 
tools to adapt to different context and needs for Commission’s support. For ‘cross-border 
procurement’, Article 39 of Directive 2014/24/EU of the European Parliament and of the 
Council provides for the possibility of procurement involving contracting authorities from 
different Member States. For ‘Commission procurement on behalf of or in the name of 
Member  States’,  as  well  as  the  Commission  and  Member  States  engagement  in  ‘Joint 
Procurement’,  the  EU’s  recast  Financial  Regulation  sets  out  the  general  procedural 
framework (Article 168(2) and 168(3)).  

(88)   

Study on Best Practices in the Public Procurement of Medicines, September 2022 

41 

 
 
 
The Act provides a sectoral basis for these collaborative procurement tools and limits them 
to  defined  cases,  where  it  contributes  to  the  achievement  of  the  above-mentioned 
objectives and respecting the principles of subsidiarity and proportionality.   

Cross-border procurement 

The Baltic Procurement Initiative - jointly undertaken by at least two of the three member 
countries  (Estonia,  Latvia,  and  Lithuania)  for  vaccines  included  in  their  national 
immunisation schedules – and the Nordic Pharmaceutical Forum – comprising Denmark, 
Iceland,  Norway,  and  Sweden,  which  focuses  on  joint  purchases  of  well-established 
hospital  medicines,  have  respectively  concluded  cross-border  procurements  of  vaccines 
and off-patent medicines such as antibiotics. An example is Iceland, which benefitted from 
cross-country  joint  procurement  with  Denmark  and  Norway  (joint  Nordic  tenders)  to 
increase the number of medicines available to patients (89). These experiences have shown 
that this tool can be useful to improve access and availability of medicines, however its 
implementation  is  time-  and  resource-intensive,  especially  in  the  starting  phase,  and 
considered a barrier. Challenges encountered in cross-border joint procurement include, 
amongst others, the differences between national legal, policy and administrative systems 
and processes, the requirement for more resources compared to national procurement and 
the need to address language issues. 

To  further  facilitate  the  deployment  of  such  initiatives,  Article  21  of  the  proposed  Act 
provides for the possibility of three or more Member States to request the Commission to 
provide  its  assistance  during  the  preliminary  phase  of  setting  up  such  a  procurement 
initiative  for  medicinal  products  of  common  interest.  Following  such  a  request,  the 
Commission  informs  all  other  Member  States  of  this  initiative  and  sets  an  appropriate 
deadline for them to declare interest, while assessing the request in light of the objectives 
of the Regulation, all of which should take no more than three weeks.  

If the Commission accepts the request, it has to provide secretarial and logistic support, 
facilitate communication and cooperation between Member States, and provide advice on 
applicable Union public procurement rules and on regulatory matters related to medicinal 
products. Under Article 21, the Commission does not participate in the actual procurement 
procedure  and  therefore  cannot  be  held  responsible  nor  liable  for  any  breaches  of 
procurement law or the implementation of the procedure.  

Commission procurement on behalf of or in the name of Member States 

Nine or more Member States may request the Commission to procure on their behalf or in 
their name critical medicines with a vulnerability in their supply chains or for which the 
MSSG has recommended a common procurement initiative, as well as medicinal products 
of common interest, for which a Joint Clinical Assessment (JCA) report has been published 
or which have undergone a clinical assessment carried out under the voluntary cooperation 
among Member States according to the HTA Regulation. Since this type of procurement 
requires considerably more resources for the Commission, the higher threshold of Member 
states  participating  in  the  procedure  and  eligibility  criteria  as  regards  the  medicinal 
products reflect the assessment of where the Commission intervention would be the most 
appropriate in the light of the objectives of the act. The requirement for a published JCA 

(89)  Amgros.  Second  Joint  Nordic  Tendering  Procedure  for  Medicines  completed.  2022.  Available  from: 
https://amgros.dk/en/knowledge-and-analyses/articles/second-jointnordic-tendering-procedure-for-
medicines-completed/ 

42 

 
 
or a completed voluntary joint clinical assessment is intended to ensure that the procedure 
can be carried out effectively, supported by a shared understanding of the clinical evidence 
on the relative effects of the procured medicine on health outcomes. 

Participation in this procurement procedure is open to all Member States, who are informed 
of the request by the Commission through the Critical Medicines Group. The Commission 
assesses  the  request  and  informs  interested  Member  States  of  its  decision  within  one 
month. This longer timeline is needed to assess the utility, necessity and proportionality of 
the request. In particular, taking into account that the procurement procedure that involves 
several Member States may have impact on the market including the impact on the access 
and  availability  of  medicinal  products  for  markets  of  the  Member  States  that  do  not 
participate in the procedure, the Commission has to verify whether the procurement could 
constitute discrimination or restriction to trade or a distortion to competition.  

If the Commission accepts the request, it conducts the procurement in line with the recast 
Financial Regulation Article 168(3), following an agreement with the Member States that 
determines the practical arrangements, liabilities to be assumed and the decision-making 
process. The agreement may include conditions to conduct the procurement as exclusive 
for the Member States or to agree to minimum binding quantities, upon acceptance of these 
conditions by the Member States. The Member States also provide resources necessary for 
the successful conclusion of the procedure, in particular through involvement of staff with 
expertise and knowledge.  

Joint procurement  

The  threshold  of  interested  Member  States  and  products  eligible  for  joint  procurement 
under Article 23 is the same as for Commission procurement on behalf of or in the name 
of the Member States. Additionally, the Joint Procurement procedure may also be initiated 
at the Commission’s initiative, in particular when the Commission identifies the need to 
procure for the purpose of donating or for its own needs.  

Participation to the procurement procedure, the Commission assessment of the request and 
the agreement also follow the same process as for Commission procurement on behalf of 
or in the name of Member States.  

The  procurement  procedure  is  conducted  in  line  with  the  recast  Financial  Regulation 
Article 168(2).  

To note that the relevant provisions are without prejudice to and do not prevent the use of 
other collaborative procurement tools established under sectoral legislation, such as joint 
procurement  of  medical  countermeasures  under  Regulation  (EU)  2022/2371  of  the 
European Parliament. Where there is an overlap between the medicines in scope of this 
Act  and  medical  countermeasures  under  the  Serious  Cross-Border  Threats  to  Health 
Regulation,  the  objective  of  the  joint  procurement  initiative  should  determine  the 
applicable framework.  

43 

 
 
 
 
Figure  11  –  Summary  table  of  the  different  collaborative  procurement  tools 
introduced in the CMA proposal  

5.6.3. Critical Medicines Coordination Group 

The  proposed  Act  establishes  the  Critical  Medicines  Coordination  Group  (“Critical 
Medicines Group” or CMG), composed of the Member States and the Commission. Each 
Member State shall appoint up to two high-level permanent representatives with relevant 
expertise for implementing the Regulation.  

As the tasks of the CMG cover multiple policy areas, requiring a broad set of expertise 
covering  industrial  policy,  public  health,  regulatory  aspects  and  public  procurement, 
Member States may appoint different representatives depending on the tasks of the group. 
Nevertheless, the representatives are responsible for ensuring national coordination.  

The European Medicines Agency holds observer status. Although the remit of the CMG 
and the MSSG are of distinct nature, the Critical Medicines Group is to work closely with 
the MSSG, the Agency, and national authorities responsible for medicinal products, and 
may hold joint meetings with the MSSG when regulatory input is needed. The Commission 
will  organise  and  coordinate  the  Group’s  work  through  a  Secretariat  and  will  chair  its 
meetings. The Group may set up working groups and shall aim to reach consensus where 
possible, while allowing members to have their differing positions formally recorded. 

The  proposed  Act  outlines  the  tasks  of  the  Critical  Medicines  Group,  which  include 
facilitating  coordination  in  the  implementation  of  the  Regulation  and  advising  the 
Commission, so as to maximise the impact and avoid unintended effects on the internal 
market.  

Specific tasks include the facilitation of coordination on strategic orientation of financial 
support for strategic projects, sharing information on manufacturing capacity for a given 
critical medicinal product, and discussing Union-wide capacity needs. The Group will also 
facilitate  exchanges  on  the  need  for  a  collaborative  procurement  initiative  and  on  the 
national  programmes.  It  will enable cooperation  on and coordination of  Member States 
public procurement  policies for  critical  medicines. As critical  medicines’ supply chains 

44 

 
 
 
may  evolve,  the  group  will  be  able  to  advise  the  MSSG  on  prioritisation  of  critical 
medicines for vulnerability evaluations and may suggest the MSSG to review or update 
the existing evaluations. Additionally, it shall periodically discuss strategic partnerships 
and prioritisation of third countries, as well as consistency and synergies between national 
and EU international actions or cooperation. The Group may also provide opinions upon 
the Commission’s request on matters related to applying the Regulation. 

5.6.4. International cooperation 

The  CMA  proposal  also  introduces  measures  to  further  support  the  diversification  of 
supply  chains,  to  complement  other  measures  that  increase  diversification  (such  as  the 
measures  on  non-price  criteria  in  procurement).  International  trade  agreements  or  other 
forms of international cooperation can enhance the availability and security of supply of 
critical  medicinal products  by providing access  to  alternative sources of supply in third 
countries. These objectives can be pursued by building partnerships relying on the network 
of existing trade agreements and by additionally pursuing strategic partnerships with third 
countries to further deepen bilateral cooperation, including with EU candidate countries, 
and potential candidate countries.  

Recognising  the  important  role  of  the  Council  regarding  the  EU’s  international 
commitments,  the  Commission  may  support  these  objectives  by  identifying  existing 
commitments  and  assessing  whether  they  effectively  contribute  to  the  objectives  as 
mentioned above or whether they could be improved or upgraded. The Commission may 
also identify what types of potential partnerships could be concluded with the most relevant 
third countries. 

To this end, the Commission will explore the possibilities to establish strategic partnerships 
with likeminded regions/countries, to aim at diversification of supply chains. In addition, 
the Commission will also build on already existing cooperation forms.  

The  ‘strategic  partnerships’  as  defined  in  the  Critical  Medicines  Act  are  non-binding 
agreements. They are defined as a commitment between the EU and a third country, group 
of third countries or international organisations to increase cooperation related to one or 
more critical medicinal products that is established through a non-binding instrument and 
which facilitates beneficial outcomes for both the EU and the relevant third country, group 
of third countries or international organisation. 

The CMG will support these measures by discussing a) the potential contribution of such 
partnerships  to  the  CMA  objectives,  b)  the  prioritisation  of  third  countries  and  c) 
consistency and synergies between national and EU actions.  

5.7. Options considered and measures discarded   

In  the  context  of  the  preparatory  work  on  the  Critical  Medicines  Act  proposal,  several 
policy  measures  were  considered  and  discarded  early  in  the  process  while  others  were 
discarded later in the process looking at their potential impacts (see also section 6 on the 
analysis of the main impacts). The exploratory study in view of a Critical Medicines Act 
also looked at different policy options and assessed their impacts (90).  

(90)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

45 

 
 
Scope of the CMA proposal 

Given  that  the  pharmaceutical  package  already  establishes  the  Union  List  of  Critical 
Medicines, which includes a vulnerability evaluation of the supply chains, the option of 
including specific provisions on the Union list of critical medicines and the vulnerability 
evaluation  was  discarded,  to  avoid  confusion  and  duplication  of  concepts  as  well  as  to 
prevent potential risk of divergence during the co-decision process.  

Instead, the proposed Act builds on the Union list of Critical Medicines and vulnerability 
evaluation as envisaged under the new pharmaceutical proposed legislation, as explained 
in section 5.5.  

Benchmarks for EU production of APIs and finished critical medicines  

Both the Critical Raw Materials Act and the Net Zero Industry Act have defined specific 
benchmarks  for  the  EU  production  of  specific  materials  and  technologies  by  a  certain 
deadline. This approach could have been considered in the Critical Medicines Act where 
benchmarks  for  EU  production  of  APIs  and  EU  finished  critical  medicines  would  be 
defined with clear values, such as ‘at least XX% of EU production of critical medicines 
and their  active substances by 2035 with the objective to  decrease shortages by XX%’. 
This policy measure was discarded given that benchmarks alone do not address the root 
causes of supply chain vulnerabilities or shortages of medicines. Even more importantly, 
given the specificities of the different categories of critical medicines and the very different 
challenges they face in terms of supply chain resilience, it is not possible to define a single 
benchmark that would be applicable across the range of critical medicines. In addition, the 
concern  had  been  raised  that  implementation  of  benchmarks  would  require  extensive 
reporting by all concerned stakeholders.  

EU production capacity reservation  

The  possibility  to  reserve  production  capacity  following  the  limited  experience  of  the 
framework contract for the reservation of capacities for the manufacturing of vaccines (EU 
FAB) was considered at an early stage for strategic projects but discarded for the following 
reasons.  While  the  EU  FAB  model  has  its  value  in  a  crisis  preparedness  context, 
particularly for rapid response to public health emergencies, it is considered less suited to 
addressing  the  broader  challenge  of  structurally  securing  supply  chains  and  preventing 
shortages of critical medicines as a long-term solution. With over 270 molecules currently 
on the Union list of critical medicines, reserving production capacity for  an appreciable 
number  of  these  medicines  was  considered  logistically  difficult  and  cost  ineffective. 
Unlike pandemic scenarios, which typically involve a limited number of vaccines and can 
benefit  from  platform  technologies,  the  wide  variety  of  critical  medicines,  spanning 
different therapeutic areas and requiring distinct manufacturing technologies, makes a one-
size-fits-all  capacity  reservation  model  impractical.  Instead  of  relying  on  reactive 
mechanisms that activate only once a shortage arises, the proposed Act focuses on long-
term  measures  to  strengthen  supply  continuity  outside  crisis  times.  This  includes 
supporting resilient and active EU-based manufacturing sites that can respond flexibly to 
supply pressures. The objective to foster a robust manufacturing and operating ecosystem 
in the EU through strategic investments. EU level financial support for critical medicines’ 
strategic  projects  would  be  complemented  by  financial  support  by  Member  States, 
covering  the  broadest  number  of  critical  medicines  and  their  APIs  possible,  with 
coordination  ensured  through  the  CMG.  In  addition,  stronger  supply  chains  would  be 
incentivised through demand-side measures, creating the conditions for sustainable EU-

46 

 
based production. Through these means, the Act aims to reduce dependencies and address 
vulnerabilities in supply chains to prevent shortages from occurring in the first place. 

EU-wide stockpiles of critical medicines  

‘Stockpiling’ refers to stockpiles established by a (public) institution in order to anticipate 
and manage a specific crisis, in contrast with the notion of “contingency stocks” which 
refers to an obligation imposed by Member States on supply chain actors to hold a certain 
amount of buffer stocks of certain medicines to mitigate the risk of supply disruptions.  

The option of establishing an EU-wide stockpile of critical medicines to mitigate the risk 
of shortages was carefully considered but ultimately not included in the proposed Act, for 
several reasons. Most importantly, the proposed reform of the pharmaceutical legislation 
already  proposes  a  legal  framework  to  impose  EU-wide  contingency  stocks,  either  of 
finished  products  or  APIs,  on  supply  chain  actors  for  certain  critical  medicines.  This 
mechanism enables the creation of distributed, rotational stock (91) within the supply chain 
itself, which is considered a more sustainable, cost-effective, and targeted solution than 
public sector  buying  and storing  critical  medicines  for use in  normal  times,  i.e.  outside 
crisis scenario. Unlike a centralised stockpile, these contingency stocks are integrated into 
the normal flow of production and distribution, reducing the cost of stock management and 
risk of waste and ensuring products are closer to the point of need. 

Moreover, establishing and maintaining a centralised EU-wide stockpile for the wide range 
of critical medicines - currently over 270 molecules - would present significant logistical, 
operational,  and  financial  challenges.  It  would  require  complex  infrastructure  to  store 
medicines with varying shelf lives, storage conditions (e.g., cold chain requirements), and 
turnover  rates.  Central  stockpiles  also  risk  becoming  static,  leading  to  inefficiencies, 
expiration  of  unused  stock,  and  high  management  costs  without  necessarily  improving 
timely access during shortages. In contrast, decentralised, rotational EU-wide contingency 
stock requirements ensure that medicines remain usable, up to date, and readily accessible 
across the Member States. Finally, central stockpiling does not address the root causes of 
shortages.  The  proposed  Act  takes  a  forward-looking  approach, to  reduce  the  need  for 
emergency stockpiling altogether by making supply chains more resilient and less prone 
to disruption.  

New EU platform/database to monitor stock levels  

The establishment of an IT system that monitors in real time the stock levels of critical 
medicines across the entire supply chain (92) in all Member States, and level of demand for 
each critical medicine in each Member State (or aggregated at EU level) was considered 
but discarded as it would be very difficult, if not impossible, to implement. In addition, 
such real-time monitoring would not help addressing the root causes of shortages such as 
those related to manufacturing or quality issues. The measures proposed under the reform 
of the pharmaceutical legislation allow for structured data collection on demand and supply 
through the European Shortages Monitoring Platform  (ESMP), both  in  the context of a 
critical shortage requiring EU-coordinated action, and for critical medicines also outside 

(91)  It means that stocks are regularly used and replaced  as part of the normal the supply chain. Rotating 
stocks through normal use allows to replenish stocks, avoid expiration and make sure that supplies are 
ready for deployment when needed.  

(92)  Upstream  and  downstream  – from  the  sourcing  of  raw  materials  and  APIs  until  the  delivery  of  the 

critical medicine to the patient.  

47 

 
 
the context of a shortage. The reform explicitly includes an expanded scope for the ESMP 
for this purpose, thereby facilitating data collection on stocks, supply, and demand. Going 
further  to  establish  real-time,  continuous  monitoring  of  stock  levels  at  the  level  of  the 
suppliers,  wholesale  distributors  and  pharmacies  was  not  considered  cost-effective, 
particularly in light of the high implementation and maintenance costs such system would 
entail,  coupled  with  the  limited  added  value  compared  to  the  functionalities  already 
included in the ESMP.  

New EU funding programme 

The Commission cannot pre-empt the outcome of the MFF negotiations. Therefore, it was 
not possible to provide for any specific financing mechanism or fund beyond 2027 in a 
proposal for sectorial legislation.  

Specific State aid rules for critical medicines  

When  Member  States  decide  to  finance  strategic  projects  or  otherwise  support  critical 
medicines or API production in Europe, compliance with State aid rules should be ensured. 
To assist national authorities, the Commission has provided a guidance document on how 
such support could be designed while minimising the potentially negative effects on the 
market (93).  

Based on the information available at this stage, including the description of the typical 
project  by  the  Critical  Medicines  Alliance,  a  new,  dedicated  State  aid  framework 
introducing new specific rules for critical medicines was discarded. The current State aid 
rules were considered sufficient to address the needs of the sector. In particular, the State 
aid  rules  regarding  Services  of  General  Economic  Interest  are  already  an  appropriate 
instrument to address the security of supply issues in the field of critical medicines since: 

− 

− 

they enable Member States to coordinate to tackle supply chain vulnerabilities of 
critical medicines by entrusting operators to reserve capacity, produce, or stockpile 
critical  medicines  or  key  ingredients  needed  for  the  production  of  these  critical 
medicines.  

they are very flexible as (i) they can address market failures at national or EU level, 
(ii) they allow the financing of Strategic Projects but also of the operating deficit 
(if any) of producing critical Medicines and (iii) they do not require a notification 
below EUR 15 million/year which should cover most of the projects envisaged by 
the sector (94). 

Supply chain resilience score 

The  possibility  of  introducing  a  scoring  system  to  assess  and  publicly  disclose  the 
reliability  and  robustness  of  the  supply  chain  for  individual  medicines  was  carefully 
considered  but  ultimately  discarded.  While  such  a  system  could  support  contracting 
authorities  in  applying  and  assessing  non-price  criteria  in  their  public  procurement 

(93)  For more information see: Guidance on the application of State aid rules in the context of the Critical 

Medicines Act 

(94)  The  strategic report of the  Critical Medicines Alliance states that a typical  project support would be 

between EUR 5 to 20 million depending on the complexity of the product.  

48 

 
 
procedures, it raises significant legal and practical concerns, notably in terms of liability 
but also due to the rapidly evolving supply chains. 

Level playing field in application of standards  

Several stakeholders called for measures to ensure a level playing field between EU and 
non-EU producers of  critical  medicines  and their  APIs. These proposals  were carefully 
considered  but  ultimately  not  included  in  the  legislative  proposal,  either  because  the 
proposals depend on enforcement of other existing legal instruments, or due to concerns 
about  their  potential  unintended  consequences  on  availability  and  affordability  of 
medicines and lack of strong evidence that this would contribute to attain the objectives of 
the  proposed  Act.  Nevertheless,  the  proposal  preserves  the  flexibility  for  contracting 
authorities to include social and environmental criteria as part of their public procurement 
processes,  in  line  with  existing  EU  rules.  This  approach  supports  voluntary  uptake  of 
sustainability-based incentives without creating disproportionate burdens or trade barriers. 

International voluntary solidarity mechanism  

Following the Communication on addressing medicines shortages in the EU, the Voluntary 
Solidarity Mechanism (VSM) was launched in October 2023. The mechanism is intended 
as a last-resort solution allowing Member States to request support from other Member 
States in obtaining stocks of medicines for which they experience a critical shortage. The 
VSM has been launched several times since its establishment and for each case a solution 
could be found within the EU. 

The  establishment  of  an  international  VSM  that  would  extend  this  mechanism  to  third 
countries  was  considered  but  discarded  for  the  following  reasons.  While  the  Critical 
Medicines Act  proposes  proactive measures to  prevent  the risk of shortages for critical 
medicines,  it  does  not  introduce  reactive  measures  to  mitigate  ongoing  shortages.  The 
Commission has already proposed a comprehensive set of measures to mitigate ongoing 
or  potential  or  actual  shortages  as  part  of  the  reform  of  the  general  pharmaceutical 
legislation. This includes earlier notification of shortages to be able to mitigate the risks 
before shortages occur, including through EU coordinated action.  

Already  today,  the  European  Medicines  Agency  and  the  national  competent  authorities 
work  closely  together  to  mitigate  critical  shortages.  When  critical  shortages  cannot  be 
resolved  at  national  level,  Member  States  can  use  the  (European)  Voluntary  Solidarity 
Mechanism. The cases addressed so far have been successfully resolved within the EU, 
indicating that there is no structural need to extend this mechanism to third countries. In 
very specific cases and when absolutely necessary, supply can already today be sourced 
from  outside  the  EU  to  solve  a  critical  shortage  under  the  existing  pharmaceutical 
legislation (Article 5 and 126a of Directive 2001/83). Nevertheless, this possibility should 
be  reserved  to  very  specific  situations  and  is  not  intended  to  be  systematically  used  to 
mitigate shortages.  To safeguard safety, quality, and efficacy of medicines for EU patients, 
it was deemed inappropriate to introduce a structural framework for import of stocks from 
third countries of medicines that are not authorised within the EU.  

Skills  

The need for specialised skills in the pharmaceutical manufacturing is recognised but EU 
initiatives  in  this  field  do  not  require  new  measures  under  the  CMA  proposal.  In  this 
respect, the Commission already announced a number of ongoing initiatives in the 2023 
Communication  on  addressing  medicine  shortages  in  the  EU,  including  the  EU  Skills 

49 

 
Agenda to address the widespread issue of skills gaps across the EU and the 'Pact for Skills' 
to tackle the most pressing industry skills gaps with active involvement of industry and 
key actors in education and training.  

6.  ANALYSIS OF THE MAIN IMPACTS FOR THE PROPOSED MEASURES  

The presented analysis takes predominantly the form of a reasoned qualitative assessment, 
drawing on previous studies, a wide range of responses to consultations and other sources, 
including the recent exploratory study in view of a Critical Medicines Act (95). 

While  the  above-mentioned  studies  and  consultations  may  provide  certain  specific 
scenarios  that  show  some  potential  quantitative  impacts  of  various  policy  options,  the 
inherent variability in the scope and implementation of the proposed measures, coupled 
with the heterogeneous nature of their attributable impacts across different contexts and 
stakeholders,  precluded  any  meaningful  direct  and  aggregated  quantitative  assessment. 
This complexity arises from factors such as differing national healthcare systems, varying 
market dynamics, the diversity of the medicines in scope and the multi-faceted nature of 
some interventions. For instance, the impact of public procurement measures on prices will 
notably depend on, and vary between, (i) the type of critical medicine and (ii) the specific 
market  situation,  but  also  (iii)  the  specific  procurement  measure  and  overall  approach 
chosen in the given Member State or region within a Member State, including the specific 
non-price criteria or requirements that will be applied by the contracting authorities and 
weight  given  to  these  non-price  criteria.  For  the  reasons,  any  aggregated  quantitative 
projection or modelling, as for instance attempted in the exploratory study in view of a 
Critical  Medicines  Act,  can  only  be  based  on  a  high  number  of  (often  very  strong  and 
uncertain) assumptions, greatly limiting the robustness, reliability and informative value 
of such attempts of aggregated quantification. Against this background, the choice in this 
SWD  of  a  predominantly  qualitative  assessment,  complemented  by,  where  possible, 
disaggregated  quantitative  evidence  and  illustrations,  is  clearly  a  more  reliable  and 
informative approach.  

6.1. Baseline  

The pharmaceutical industry’s supply chain for many critical medicines is highly complex, 
global and fragmented. External factors such as procurement practices and pricing policies 
led to further market consolidation and supply chain vulnerabilities as described in section 
3.3. Such supply chain vulnerabilities increase the risk and impact of medicine shortages, 
which have detrimental consequences for patients and healthcare systems in the EU.  

The burden of medicine shortages is significant not only for individual patients (patient 
health impact), but also  for the society (price increases, administrative costs and use of 
healthcare resources).  

Patients face increasing difficulty to get the medicines they need, affecting their quality of 
life and leading to a potential deterioration of their health status due to delays in treatment 
and  suboptimal  care.  Consumer  surveys  show  that  between  January  2023  and  January 
2024,  nearly  40%  of  households  experienced  a  medicine  shortage,  with  16%  facing 
recurring shortages. Amongst those affected, 53% reported experiencing health problems, 
and 40% noted a worsening of symptoms, 13% had to take temporary sick leave, and 12% 

(95)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study). 

50 

 
 
experienced side effects from alternative or substitute medications (96). In 2023, hospital 
pharmacists identified delays in care or therapy (59%), suboptimal treatment (43%) and 
cancellation  of  care  (35%)  as  the  main  consequences  of  medicines  shortages  in  the 
hospitals where they practice (97). 

The potential impact of shortages on the overall health of patients is significant with an 
aggravated  effect  for  critical  medicines  treating  severe  conditions  for  which  a  limited 
number of alternative treatments are available, and insufficient supply may result in serious 
harm or risk of serious harm to patients.   

In case of shortages affecting a critical medicine, it may not be possible to treat patients 
with the most appropriate treatment in line with the current standard clinical guidelines. 
This can lead to treatment delays and suboptimal care, as well as medication errors and 
adverse events. As an example, shortages of certain antibiotics, especially in absence of 
equivalent  alternative  treatment,  can  be  detrimental  given  the  risk  of  antimicrobial 
resistance. In shortage situations, public authorities (national competent authorities in the 
Member States, in coordination with the European Medicines Agency, as necessary) may 
have to take measures to mitigate and manage the shortage until normal supply is resumed. 
For instance, shortages  of several  live-saving medicines, including  immunoglobulins  or 
thrombolytics, has led public authorities to take measures to prioritise treatment of patients 
based on limited available supply of the medicine. Similarly, in cases of critical shortages 
of older cancer treatments, public authorities may also need to take mitigation measures 
such as recommending not to initiate such treatment for new patients in case of the limited 
availability.  

However, in the absence of such mitigation measures, the impact of shortages on patients 
would likely be even more significant.  

In  addition,  the  management  of  medicines  shortages  leads  to  substantial  costs  for  both 
public authorities and healthcare providers and lead to severe inequalities among patients 
in the EU. The Office of Health Economics (OHE) (98) has looked at the cost of medicines 
shortages (99)  and  identified  price  increases  as  a  key  feature,  notably  due  to  the  cost  of 
switching  to  higher-cost  alternatives.  It  also  emphasises  the  cost  of  using  additional 
healthcare resource for the management of medicine shortages, including time and labour 
costs, particularly for pharmacists, to identify alternatives and substitution protocols, adjust 
inventories and modify purchasing practices as well as to coordinate with other healthcare 
providers and relevant stakeholders. The European organisation representing community 
pharmacists  (PGEU)  highlighted  in  their  annual  report  on  medicine  shortages  that 
community pharmacists spent an average of 10.6 hours a week dealing with shortages in 
2024 – three times more than a decade ago (100).  

(96)  BEUC Drug shortages survey report   The survey has been conducted  in 2024 with 4,017 consumers 

aged between 25 and 74 years from Belgium, Italy, Spain and Portugal. 

(97)  EAHP 2023 Shortages Survey report 

(98)  The Office of Health Economics (OHE) is an independent health economics research organisation. 

(99)  OHE publication on the cost of drug shortages, September 2024. 

(100) PGEU Medicine Shortages Report 2024 

51 

 
 
The draft conclusions of the exploratory study on the Critical Medicines Act (101) provided 
broad estimations of certain costs attributable to shortages, acknowledging that much of 
the  available  evidence  focuses  on  medicine  shortages  in  general.  The  costs  are  broken 
down into the following categories: 

−  additional  costs  of  treatment: shortages  can  lead  to  increased  healthcare 
expenditure.  Examples  include  an  estimated  potential  EUR  51-135  million  to  a 
statin shortage in the EU and potential EUR 5.2-172 million cost attributable to a 
trastuzumab shortage (102). Furthermore, consumer surveys also report that 27% of 
respondents  incurred  additional  costs  due  to  the  supply  issues.  On  average, 
consumers  spent  an  additional  EUR  19  to  obtain  replacement  medicines,  with 
country-level averages ranging from EUR 7 to EUR 36. In rare cases, individual 
costs reached as high as EUR 400 (103).  

−  workload  of  healthcare  providers,  with  a  focus  on  pharmacists: managing 
medicine shortages significantly increases the workload of pharmacists. Based on 
the estimated time spent by community pharmacists to mitigate medicine shortages 
of  critical  medicines  annually,  it  has  been  estimated  that  the  EU-wide  costs  for 
community pharmacists reach EUR 399–793 million annually (104). Another 2024 
study  by  the  Royal  Dutch  Society  for  the  Advancement  of  Pharmacy  found 
management of all medicine shortages (critical and non-critical) in the Netherlands 
required 2,000 full-time employees, translating to an annual cost of €220 million 
in  the  Netherlands (105).  Health  care  providers  other  than  pharmacists  are  also 
affected to a certain extent. 

−  administrative  costs: these  include  the  burden  on  EU  administrations,  national 
competent  authorities  and  businesses.  For  example,  EMA’s  annual  costs  for 
shortage  management  alone  are  estimated  to  be  around  EUR  5–15  million.(106) 
While the regulatory measures proposed in the revision of the EU pharmaceutical 

(101) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

(102) Estimates are provided by the OHE publication on the cost of drug shortages, September 2024. Both are 
based on research modelling on the potential cost impact of hypothetical medicine shortages in the EU, 
taking into account patient health impact (delayed or no access to treatment, leading to poorer health 
outcomes), additional healthcare resources use (time and costs associated with shortage management) 
and medicine acquisition costs (costs associated with switching to higher cost alternatives). The potential 
estimated  costs  of  the  shortage  scenarios  vary  widely  depending  on  model  assumptions,  including 
QALY (metric that combines the quantity (length of life) and quality (health status) of life into a single 
measure to evaluate the cost-effectiveness of health interventions) losses per patient, the value assigned 
to  QALYs  lost,  the  proportion  of  products  in  shortage  and  the  share  of  patients  able  to  switch  to 
alternative products. 

(103) BEUC Drug shortages survey report   

(104) Estimation provided by the exploratory study in view of a Critical Medicines Act (Ecorys, forthcoming 
study) based on the findings of PGEU Medicine Shortages Report 2024. This estimation extrapolates at 
EU level the average time spent per pharmacy to mitigate shortages of critical medicines, applying the 
average hourly cost for pharmacists. It is assumed that 15-30% of the shortage instances concern critical 
medicines. 

(105) 10 jaar geneesmiddelentekorten: enorme impact | KNMP 

(106) These estimates are drawn from the exploratory study for the Critical Medicines Act (Ecorys, forthcoming 
study).  The  calculations  are  based  on  the  assumptions  that  approximately  1–3%  of  the  annual  EMA 
budget is spent on addressing shortages – a figure inferred from the EMA annual activity report 2024, 
given an annual EMA budget of EUR 492 million in 2024, this would equate to EUR 5–15 million. 

52 

 
 
legislation are expected to ensure a coordinated approach for the management of 
critical  shortages  at  EU  level  and  to  support  the  security  of  supply  of  critical 
medicines, complementary measures of industrial nature are needed to address the 
underlining supply chain vulnerabilities with the ultimate goal to reduce the risk of 
occurrence and impact of shortages of critical medicines (see section 3.4).  

6.2.  Economic and social impacts of the proposal 

6.2.1   Economic impacts 

innovative  processes  and  new  production 

The proposed Critical Medicines Act is expected to have a positive impact on supply chain 
resilience  and  security  by  enhancing  domestic  production  capabilities  and  reducing 
external dependencies, as well as by supporting supply chain diversification through public 
procurement and strategic partnerships. Some measures may encourage investments in EU 
thereby 
manufacturing, 
contributing  to the competitiveness  of the EU’s pharmaceutical  sector.  In addition, the 
proposed Regulation intends to reduce the fragmentation of the internal market by ensuring 
exchange  of  information  and  coordination  between  national  authorities  on  financial 
support to strategic projects and public procurement strategies and by reducing the need 
for  additional  national  measures  to  ensure  security  of  supply.  Finally,  the  proposed 
Regulation aims to improve the availability and accessibility of other medicinal products, 
where the functioning of the market does not otherwise sufficiently ensure the availability 
and accessibility of those medicinal products to patients, whilst giving due consideration 
to the appropriateness to ensure the affordability of medicinal products. 

technologies, 

Security of supply and resilience 

By  incentivising  and  supporting  Strategic  Projects,  the  CMA  proposal  is  expected  to 
increase the production of critical medicines, their active substances and key inputs in the 
EU, and reduce dependencies on third countries. The proposed policy actions are expected 
to mitigate the risks of supply chain disruptions due to overreliance on a limited number 
of suppliers located outside the EU. 

The  draft  conclusions  of  the  exploratory  study  on  the  Critical  Medicines  Act (107) 
demonstrate  the  large  consensus  among  key  stakeholder  groups  supporting  Strategic 
Projects,  aiming  to  increase  EU  manufacturing  capacity.  The  designation  of  Strategic 
Projects received overwhelming support (95% support among survey respondents) with 
national  authorities  stressing 
these  projects  could  significantly  strengthen 
manufacturing  capacity,  provided  that  issues  like  administrative  complexity  and 
coordination  are  well  managed.  Fast-tracked  administrative  procedures  were  highly 
supported, with 86% expecting favourable impacts. The provision of dedicated financial 
support based on existing EU funding instruments gathered strong approval (82% support) 
while  86%  of  respondents  considered  the  clarification  of  State  aid  rules  essential  for 
stimulating investments that secure priority supply to the EU during shortages.  

that 

(107)  Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

53 

 
 
 
The proposed measures  on  public procurement, as  well as  pricing  and reimbursement 
policies,  are  expected  to  incentivise  greater  investment  in  resilient  supply  chains. 
According to the study on best practices in the Public Procurement of Medicines (PPM) 
(108) published in 2022, the objective of supply security can be supported / reinforced using 
relevant  award  criteria,  awarding  multiple  winners  and  collaborative  procurement. 
Nevertheless,  the  impact  of  PPM  on  medicines  shortages  has  not  been  quantitatively 
assessed in the literature, given the challenges with consistently measuring and comparing 
medicines shortages across countries. In the context of the exploratory study in view of a 
CMA (109), financial estimates for the burden of administrative and procurement-related 
adjustments  were  provided  by  a  single  stakeholder.  They  are  consistent  with  known 
benchmarks  in  EU public administration. For example, the estimated  EUR  350,000 per 
Member  State  to  prepare  national  strategies  aligns  with  average  costs  for  public  sector 
strategy  initiatives  under  Interreg  Europe  (110).  The  EUR  200,000  –  EUR  400,000  per 
Member State range to adopt MEAT criteria mirrors findings from co-financing schemes 
in  Slovak  regional  authorities,  where  adoption  of  such  models  involved  considerable 
administrative  effort  (111).  These  figures  give  a  certain  indication,  but  significant 
particularities  are  likely  to  exist  for  procurement  in  the  pharma  sector,  and  between 
Member  States  –  not  only  due  to  their  very  different  size  but  also  due  to  major 
organisational differences between the national health systems.  

Furthermore, collaborative procurement initiatives could also support supply security by 
pooling demand at EU level and reducing transactional costs for pharmaceutical companies 
and making the EU a more attractive place to conduct business. According to the PPM 
study (112), mitigating supply issues for older medicines is seen as an important purpose of 
collaborative procurement initiatives, including for the joint procurement of vaccines by 
the  Baltic  countries  and  the  joint  Nordic  tenders.  Potential  benefits  of  collaborative 
procurement in addressing medicines shortages are not limited to small countries. France 
has also considered international collaborations, including joint procurement, as strategic 
pillar to address medicines shortages in an OECD report on shortages (113). In this respect, 
the draft conclusions of the exploratory study in view of a CMA (114) highlighted that more 
systematic cross-border procurement among Member States on voluntary basis (72% of 
respondents  anticipating  positive  outcomes)  would  complement  Strategic  Projects  by 
consolidating demand and reinforcing investment incentives. 

Finally, by promoting supply chain diversification through the establishment of strategic 
partnerships with selected third countries, the CMA proposal is also expected to make 
supply chains more resilient to disruptions and shocks. While the CMA proposal aims to 
reinforce  manufacturing  capacity  in  the  EU,  it  would  not  be  realistic  to  reshore  the 

(108) Study on best practices in the public procurement of medicines, October 2022 

(109) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

(110) https://www.interregeurope.eu/help-centre/apply-for-funding/project-budget  

(111) https://www.nature.com/articles/s41599-024-04129-4  

(112) Ibid 

(113) Chapman S, Dedet G, Lopert R. Shortages of medicines in OECD countries. OECD Health Working 

Paper No. 137. Paris: OECD, 2022.  

(114) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

54 

 
 
production of all critical medicines and their APIs within the EU. It may rather be sufficient 
to reshore only a proportion of this production to ensure increased resilience and supply 
security. Therefore, it is equally important to be able to rely on manufacturing capacity in 
like-minded  countries,  especially  EU  candidate  countries  and  potential  candidate 
countries, to increase the number of suppliers and diversify their location.  

Based on the pharmaceutical industry study in prospective EU members (115), specifically 
in  the  Western  Balkans  and  Ukraine,  a  key  preliminary  finding  is  that  out  of  the  276 
products listed in the updated Union List of Critical Medicines (ULCM), over 100 — more 
than  one  third  —  are  already  produced  in  the  seven  assessed  markets,  with  many 
production capacities currently underutilised. Despite existing regulatory challenges, this 
suggests there is still significant potential to leverage existing manufacturing capacity in 
EU candidate and potential candidates.  

International trade and dependencies  

The  CMA  proposal  is  expected  to  deliver  an  impact  on  reducing  global  supply  chain 
dependencies  by  more  actively  supporting  reshoring  and  investment  in  EU-based 
production capacity.  

The designation of Strategic Projects, coupled with administrative fast-tracking, financial 
incentives, and clearer State aid rules, supports significant expansion in EU pharmaceutical 
manufacturing.  These  proactive  measures  aim  to  decrease  reliance  on  third-country 
suppliers, especially for critical medicines and APIs, thereby mitigating vulnerability to 
international trade disruptions. Clear State aid rules and financial incentives are expected 
to  improve  investment  predictability,  enabling  more  reshoring  efforts  without  severely 
restricting global trade. On the other hand, creation of manufacturing capacities in the EU 
for critical medicines and their active ingredients, with highly consolidated supply chains, 
would  benefit  the  EU  trading  partners  and  increase  the  global  supply  chain  resilience. 
Overall,  the  CMA  proposal  would  enhance  EU  self-reliance  and  negotiating  power, 
moderately  influencing  international  pharmaceutical  trade  dynamics  while  remaining 
within established global regulatory frameworks.   

The proposed measures on public procurement, in particular the requirements favouring 
suppliers of critical medicines produced in the EU, are also expected to support efforts to 
reduce our dependencies on third country suppliers for specific critical medicines while 
limiting  the  impact  on  international  trade.  This  measure  targets  only  specific  critical 
medicines where a high dependency on a single or limited number of third countries has 
been identified based on the outcomes of the vulnerability evaluation, reducing the impact 
of the proposed measure on global trade. In addition, the CMA proposal clarifies that these 
requirements are to be applied in compliance with the EU’s international commitments.   

Competitiveness and capacity to innovate  

The  CMA  proposal  is  expected  to  have  a  positive  impact  on  the  competitiveness  of 
pharmaceutical companies operating in the EU by encouraging investment in resilient and 

(115) Ongoing  pharmaceutical  industry  study  in  prospective  EU  member  countries  conducted  by  NTU 
International Consortium. The study is specifically looking at the Western Balkans, i.e. Albania, Bosnia 
and  Herzegovina  (BiH),  Montenegro,  North  Macedonia  and  Serbia  (EU  candidate  countries)  and 
Kosovo (a potential EU candidate), and Ukraine (EU candidate country).  

55 

 
 
 
 
modern  supply  chains  and  scaling  up  production  facilities  in  the  EU.  Moreover,  the 
proposed  measures  in  the  CMA  are  expected  to  build,  expand  and  keep  the  relevant 
expertise to produce medicines in the EU. 

Public investments to maintain and extend production facilities for critical medicines in 
the EU will leverage and complement private investments and make more investments in 
EU  production  facilities  profitable.  It  is  expected  that  the  investments  will  flow  into 
building new facilities or upgrading existing production lines. As a result, the investment 
will lead to more modern, state-of-the-art, potentially more environmentally sustainable, 
and cost-efficient production facilities in the EU.  

The proposed measures to support Strategic Projects, such as fast-tracked permit-granting 
procedures,  dedicated  administrative  and  regulatory  support  to  projects  promoters  and 
facilitated financial support, are expected to incentivise companies to invest in the creation, 
extension and modernisation of manufacturing sites of critical medicines and their APIs 
and  key  inputs  in  the  EU.  The  strategic  report  of  the  Critical  Medicines  Alliance 
highlighted that infrastructure and capital expenditure (CAPEX) investment support has 
been identified by its members when consulted on investment strategies and objectives as 
the  top  priority,  particularly  investing  in  modernisation  and  greener  production 
technologies, and enhancing process efficiency, notably in the manufacture of APIs. In this 
context,  members  of  the  Alliance  (representing  industry,  civil  society  and  the  Member 
States) have agreed that a typical project support would be between EUR 5 to 20 million 
depending on the complexity of the product (116).  

The proposed measures in the CMA proposal, in particular financial incentives as well as 
regulatory and scientific support to Strategic Projects, are expected to primarily support 
innovation in new manufacturing processes with the objective to increase efficiency and 
support sustainable production. The draft conclusions of the exploratory study in view of 
a CMA indicate that simplified processes and transparent state aid rules could encourage 
investment in greener and more resilient manufacturing. 

Through the measures proposed in the CMA, public and private investment will also flow 
into  the  innovation  of  production  technologies  and  facilities,  creating  incentives  for 
innovation. The potentially newly developed technologies would make the pharmaceutical 
industry in Europe more competitive. 

The CMA proposal provides measures to support building better integrated supply chains, 
also locally in the EU, will create a more stable and predictable business environment if 
supply  chains  become  less  vulnerable  to  disruptions.  The  increase  in  stability  and 
predictability reduces the uncertainty of investments in the EU pharma sector and could 
trigger even more investments in EU medicines production. 

If the proposed measures in the CMA will lead to an increase in production capacity in the 
EU,  the  increase  in  scale  can  lead  to  economies  of  scale,  potentially  leading  to  lower 
production costs in the EU. Making production in Europe more productive through more 
innovative  production  technologies  and  benefitting  from  potential  economies  of  scale 
would lead to a more competitive pharmaceutical sector in the EU. 

(116) Strategic Report of the Critical Medicines Alliance, February 2025 

56 

 
 
 
Functioning of the Single Market 

The impacts of the CMA proposal on the functioning of the single market are expected to 
be  positive.  Taking  the  form  of  a  Regulation,  the  CMA  proposal  aims  to  provide  a 
sufficient  level  of  harmonisation  and  to  reduce  the  EU’s  market  fragmentation  by 
establishing  clear  criteria  for  the  identification  and  recognition  of  strategic  projects, 
conditions for administrative and financial support of such strategic projects as well as by 
mandating the use of non-price requirements by public procurers and measures to avoid 
any negative impact of contingency stock requirements imposed at national level.  

The  CMA  proposal  will  help  strengthening  the  resilience  of  critical  medicines  supply 
chains  within  the  Single  Market,  with  an  important  role  for  the  Critical  Medicines 
Coordination  Group  (CMG)  to  assist  and  facilitate  exchange  of  information  between 
public authorities. This coordination group will have a central role for the coordination of 
financial  support  provided  by  national  authorities  and  the  Commission  to  project 
promotors. It is expected to reduce the risks of distortion of competition, subsidy race and 
single market fragmentation due to State aid interventions.  

For Strategic projects receiving financial support, the obligation to prioritise supply to 
the Union market and ensure that the concerned critical medicine remains available in the 
concerned Member States is also expected to support the functioning of the Single Market. 
In this context, the relevant Member State may request the necessary supplies of the critical 
medicine, active substance or key input to the Union market to avoid shortages in one or 
several Member States.   

The proposed measures on public procurement, especially the requirements to use other 
criteria than price-only for critical medicines and to favour EU production when a high 
dependency  on  a  single  or  limited  number  of  third  countries  has  been  identified,  will 
increase  harmonisation  between  public  procurement  practices  while  leaving  sufficient 
room for manoeuvre at national level to  adapt these practices depending on the type of 
critical medicines and the specificities of national healthcare systems.  

To  avoid  negative  impacts  on  the  Single  Market,  the  CMA  proposal  requires  Member 
States  to  ensure  that  national  contingency  stock  requirements  are  proportionate  and 
respect  principles  of  transparency  and  solidarity.  This  obligation  is  expected  to  have  a 
beneficial impact on marketing authorisation holders and wholesalers that are confronted 
with  an  increasing  number  of  national  requirements  imposing  to  hold  additional  safety 
stocks for the different markets. Ensuring proportionality of these national requirements, 
when it comes to the medicines in scope, the size of stocks and the timeline to build them, 
as well as solidarity between Member States to facilitate the sharing of these contingency 
stocks in case of shortages in another country will improve the functioning of the single 
market.  

Moreover, collaborative procurement will contribute to improving the Single Market for 
medicines by supporting the availability and accessibility of medicines authorised in the 
EU.  In  this  context,  it  should  be  noted  that  the  Commission  will  further  support  these 
collaborative procurement initiatives while avoiding negative impact on the Single Market. 
More  specifically,  in  the  context  of  EU  joint  procurement,  the  Commission  will  verify 
whether  the  procurement  could  constitute  discrimination  or  restriction  to  trade  or  a 
distortion  to  competition.  This  measure  is  expected  to  limit  negative  impact  of  joint 
procurement initiatives on the single market. 

57 

 
Overall, the CMA proposal aims to strengthen the security of supply of critical medicines 
in  the  Union,  to  reduce  the  occurrence  and  impact  of  shortages  of  critical  medicines, 
reducing the need for national authorities to take additional measures to mitigate the impact 
of such shortages. It is therefore expected that, in the long term, the number of national 
measures on export restrictions due to supply disruptions will be reduced, having a positive 
impact on the single market.   

Affordability of medicines  

The suggested policy actions in the CMA proposal may impact pharmaceutical prices and, 
thus, on the affordability of medicines. Given the wide variety of proposed measures and 
the flexibility in the implementation of certain policies, positive or negative price effects 
are difficult  to  quantify. The following  paragraphs shed light on a possible direction of 
exemplary  price  effects  due  to  changes  in  criteria  in  public  procurement  or  due  to 
collaborative procurement. 

Given that the proposed measures on public procurement include (additional) procurement 
requirements other than price-only, the submitted offers may take into account the higher 
costs of the additional procurement requirements and eventually lead to price increases for 
critical  medicines.  According  to  a  stakeholder  survey  carried  out  in  the  context  of  the 
exploratory study in view of the Critical Medicines Act, 59% of respondents expected price 
increases from resilience-based procurement, and 75% expected increases due to broader 
MEAT criteria. Views on cross-border/joint procurement were mixed: 37–42% expected 
price reductions, whilst 31–33% expected rather increases. Currently, globally integrated 
supply chains can be highly vulnerable but are also efficient. Production of medicines in 
Europe or sourcing of API from Europe tends to be more expensive than sourcing from 
other  parts  of  the  world (117).  If  public  procurement  requirements  favour  sourcing  of 
medicines or API from Europe, or require or incentivise the use of multiple suppliers, the 
establishment of buffer stocks or other requirements, the submitted tenders are expected to 
reflect the associated rising costs.   

However,  the  quantification  of  production  costs  and  the  expected  impacts  of  public 
procurement  measures  on  prices  will  notably  depend  on  the  following  aspects:  type  of 
critical  medicine  (e.g.  off-patent/on-patent),  market  situation  (e.g.  number  of  different 
suppliers that may compete for a tender), the specific non-price criteria or requirements 
selected by the contracting authorities (stockholding obligation which can range from few 
weeks to several months depending on various factors, number of diversified suppliers, 
supply chain monitoring, contact performance causes on timely delivery or transparency 
requirements), the use of award criteria compared to minimum requirements or inclusion 
of  requirements  in  the  tender  specifications,  weight  given  to  the  non-price  criteria,  the 
potential use of the exemptions when justified by market analysis or considerations related 
to the financing of health services and whether the companies would pass on the costs to 
the  customers.  While  certain  non-price  criteria/requirements  are  not  expected  to  entail 
significant price increases, other might have more substantial impacts. Other factors may 
limit  the  price  increase,  such  as  lower  transport  costs,  less  compliance  with  trade 
regulation, or economies of scale if more API or pharmaceuticals are sourced from the EU. 
Yet other factors may limit the budgetary impact on health systems, such as higher supply 

(117)For example, compare to the Decision “State Aid SA.62915 (2022/N) – Austria – Aid for maintaining 

Sandoz penicillin production in Kundl (Tyrol)” 

58 

 
 
security/sustainability  and  less  costs  due  to  shortages.  Consequently,  it  is  difficult  to 
estimate with accuracy a potential price increase that may apply to critical medicines.  

Moreover,  some  studies  indicate  that  the  proposed  measures  on  collaborative 
procurement  could  support  the  affordability  of  the  concerned  critical  medicines  and 
medicines of common interest. Nevertheless, it will depend on various factors such as the 
type  of  medicine  subject  to  the  collaborative  procurement,  the  volumes  and  the  market 
size.  According  to  the  PPM  study,  collaborative  procurement,  including  within  country 
and cross-country, can help achieve lower prices and make small markets attractive for 
suppliers,  thereby  achieving  better  availability  of  medicines  and  mitigating  the  risk  of 
shortages.  Collaborative  procurement  also  provides  other  benefits,  such  as  information 
sharing and capacity building. However, the stakeholder consultation in the context of the 
PPM study did not clarify whether collaborative procurement is expected to lead to lower 
prices. The draft conclusions of the exploratory study in view of a CMA (118) also revealed 
divergences of opinion regarding the impact of collaborative procurement on prices, with 
around  40%  of  stakeholders  expecting  price  decreases  (particularly  for  high-cost,  low-
volume products) and a third expecting increases.  

While characteristics of  the procurement system  can have an impact  on pharmaceutical 
price, the characteristics of procurements are different across Member States and a precise 
quantification at  EU-level  is  probably impossible to  conduct.  For  example, in  the PPM 
study (119), the analysis of quantitative data showed that lower unit prices were observed 
in countries with more advanced PPM (i.e. more centralised procurement, use of different 
PPM  procedures  and  techniques,  MEAT  award  criteria,  and  application  of  supporting 
policies and tools). This is consistent with previous studies which have generally found 
that collaborative procurement (e.g. through the use of a Central Purchasing Body – CPB) 
results in lower prices. Nevertheless, the relationship between affordability and specific 
procurement  characteristics  is  not  straightforward  as  for  certain  individual  countries  a 
different trend can be observed.  The PPM study found that stakeholders from the public 
sector  generally  consider  PPM  to  positively  impact  affordability.  More  advanced 
procurement  practices,  such  as  the  use  of  framework  agreements,  Dynamic  Purchasing 
Systems  (DPS),  and  application  of  MEAT  criteria  were  assessed  as  contributing  to 
improved affordability in an online survey. 

SMEs  

In addition to fast-tracked permit-granting procedures and financial incentives to strategic 
projects,  the  proposed  Regulation  includes  specific  measures  to  provide  administrative, 
regulatory and scientific support to pharmaceutical companies, with a specific focus on 
Small  and  Medium-sizes  Enterprises  (SMEs).  SME’s  may  for  instance  benefit  from 
dedicated  advice  from  EMA  when  developing  projects  relying  on 
innovative 
manufacturing  processes.  Where appropriate,  Member  States  will have  to  establish  a 
dedicated  channel  for  communication  with  SMEs  to  provide  guidance  and  respond  to 
queries related to the implementation of the Act. Finally, SME’s already benefit from less 
demanding  conditions  in  order  to  be  granted  State  aid,  which  may  facilitate  access  to 
financing of strategic projects.   

(118) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

(119) Study on best practices in the public procurement of medicines, October 2022 

59 

 
 
The draft conclusions of the exploratory study  in view of a Critical Medicines Act (120) 
found that the proposed measures could positively impact SMEs by reducing entry barriers 
and  lowering  initial  investment  risks.  While  the  increased  availability  of  financial  and 
administrative  support  may  positively  impact  SMEs  by  reducing  entry  barriers  and 
lowering initial investment risks, the complexity of administrative processes and resource 
requirements might still favour larger firms, for example in applying for and leveraging 
strategic  project  designations.  Improvements  to  the  investment  environment,  such  as 
dedicated financial support and clarified State aid rules could particularly benefit SMEs by 
providing  clearer  investment  frameworks  and  reducing  compliance  uncertainties,  thus 
somewhat  enhancing  SMEs'  competitive  positioning  by  comparison  with  other  policy 
options. 

Employment 

The  proposal  is  anticipated  to  have  positive  employment  impacts.  The  designation  of 
Strategic Projects, coupled with fast-tracked administrative support and targeted financial 
incentives is expected to incentivise substantial investment in EU-based manufacturing. 
This  would  likely  lead  to  job  creation  in  the  EU  in  API  production,  formulation,  and 
supporting  supply chain  functions, especially  in  regions with  available infrastructure or 
prior pharmaceutical industrial activity.  

(120) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

60 

 
 
 
 
6.2.2. 

Social impacts 

Health impacts 

Reduction in shortages of critical medicines 

Overall,  the  CMA  proposal  is  designed  to  complement  the  proposed  revision  of  the 
pharmaceutical  legislation  to  reduce  the  occurrence  and  impact  of  shortages  of  critical 
medicines  by  fostering  supply  chain  resilience,  reinforcing  domestic  manufacturing 
capacities  and  promoting  supply  chain  diversification.  The  expected  impacts  of  the 
proposed  measures  on  health  are  expected  to  materialise  in  the  medium  or  long-term. 
Patients are expected to be less affected by critical medicine shortages. Reducing medicine 
shortages  would  not  only  alleviate  the  current  burden  related  to  the  management  of 
shortages (see the section 6.1 on the baseline) but also improve patients’ health, by limiting 
the risk of deterioration of their health status due to sub-optimal care or delayed treatment.  

The draft conclusions of the exploratory study in view of a Critical Medicines Act (121) 
found  that  the  proposed  measures  create  a  coherent  framework  of  enabling  conditions 
which,  is  likely  to  overcome  key  barriers  to  expanding  EU-based  manufacturing  with 
concomitant results in terms of reducing the risk of shortages and thereby negative effects 
on patient health. Moreover, a reduction in shortages of critical medicines would in turn 
lead to healthcare professionals benefitting from fewer treatment disruptions, reducing thus 
the  time  spent  on  searching  for  therapeutics  substitutions  and  associated  administrative 
tasks. Several stakeholders highlighted the opportunity to redirect saved time and resources 
toward patient care. 

Improved availability and accessibility of medicines of common interest 

Effects  of  the  proposed  measures  related  to  collaborative  procurement  on  access  and 
availability of medicines of common interest  are expected to materialise in the  short or 
medium  term.  More  specifically,  EU-led  collaborative  procurement  should  support  the 
availability of medicines of common interest, particularly for smaller and lower-income 
Member States, where it can overcome a market failure due to limited patient population. 
Broader,  improved  availability  of  these  medicines  is  anticipated  to  yield  strong  health 
benefits.  

The draft conclusions of the exploratory study on the Critical Medicines Act (122) showed 
that  cross-border  procurement  for  medicines  of  common  interest  was  consistently 
supported (68% positive), as seen to reduce inequalities in access. Nevertheless, concerns 
persisted around packaging differences, legal constraints, and labelling requirements that 
could  hinder  harmonisation  and  patient  safety.  On  joint  procurement  for  medicines  of 
common interest, stakeholders noted that this could help reduce disparities in access, but 
only if linked to meaningful transparency and coordinated demand planning. Some flagged 
the risk of unintended consequences for generics markets, including reduced competition 
and supplier withdrawal. 

(121) Exploratory study in view of a Critical Medicines Act by Ecorys (forthcoming study) 

(122) Ibid. 

61 

 
 
6.2.3.  Environmental impacts 

The legislative proposal’s environmental impacts are in line with the climate objectives. 
The  measures’  support  for  EU-based  manufacturing  through  Strategic  Projects  relocate 
production capacity to the EU where carbon emission fall under the EU Emission Trading 
System (EU-ETS) and the environment is strongly protected against pollution by chemical 
production processes, all are possible positive environmental impacts. More specifically, 
one of the designation criteria for Strategic Project consists of the modernisation of existing 
manufacturing  site  in  view  of  ensuring  greater  sustainability  or  increased  efficiency. 
Furthermore, the CMA measures could reduce long-haul freight emissions and associated 
carbon intensity by shortening  supply routes. However, increased production  of critical 
medicines  and  their  APIs  in  the  EU  may  increase  energy  consumption  and  emissions, 
particularly in energy-intensive API synthesis.  

6.3. Other impacts  

Digital readiness  

While the CMA proposal does not include a new database or IT platform to support the 
implementation of the proposed measures, it will rely on existing IT platforms, such as the 
European Shortages Monitoring Platform (ESMP) (see section 5.4). The ESMP is notably 
expected  to  support  the  vulnerability  evaluation  of  critical  medicines  supply  chains, 
requested for the implementation of certain measures of the CMA proposal.    

The  Act  follows  the  ‘only-once’  principle  by  not  duplicating  data  collection  for 
identification of critical medicines and evaluation of vulnerabilities in their supply chains, 
by re-using data collected and processed established under the proposed pharmaceutical 
legislation. 

In order to guarantee the interoperability of data regarding  critical  medicines and other 
medicines of common interest and facilitate seamless, automated electronic exchanges, the 
Commission  and  the  EMA  are  expected  to  maintain  these  data  in  appropriate  and 
interoperable formats. This includes utilising commonly used, machine-readable formats 
such as application programming interfaces (APIs), and employing controlled vocabularies 
where available, to facilitate data reuse. The digital implementation is executed by EMA, 
relying on existing tools, procedures and artefacts. 

In addition, according to Article 6 of the CMA proposal, Member States will be requested 
to designate an authority (‘designated authority’) that shall confirm, upon request, whether 
a  specific  project  constitutes  a  strategic  project.  Member  States  shall  inform  the 
Commission  of their designated authority. This notification  will be done  electronically. 
The list of Member States’ authorities designated for assessing and confirming Strategic 
Projects will be published on the ec.europa.eu website, relying on its standards for being 
findable and accessible.  

Member  States  will  also  be  required  to  notify  their  national  programmes  to  the 
Commission  in  its  role of  the  secretariat  of  the  Critical  Medicines  Group,  according  to 
Article  16.  The  Commission  will  then  ensure  the  distribution  to  all  members  of  the 
coordination group. This notification and distribution will be done electronically. 

Furthermore,  the  Commission  will  display  details  of  Strategic  Projects  that  address  a 
vulnerability in the supply chains of critical medicines on the STEP Sovereignty Portal, a 

62 

 
publicly available website providing information about funding opportunities for projects 
linked to the STEP objectives and enhancing the visibility of those projects.  

Fundamental rights 

The  proposal  helps  achieve  a  high  level  of  human  health  protection  and  is  therefore 
consistent with Article 35 of the Charter of Fundamental Rights of the European Union 
(‘the Charter’). Article 16 of the Charter provides for the freedom to conduct a business. 
The measures under this proposal support creation or expansion of manufacturing capacity 
and  foster  demand  for  critical  medicines  and  other  medicines  of  common  interest  with 
resilient  supply  chains,  which  can  reinforce  the  freedom  to  conduct  a  business  in 
accordance with Union law and national laws and practices. 

6.4. Costs and benefits of the proposal  

In terms of overall benefits, these are expected to be significant. Increasing supply chain 
resilience and diversification of critical medicines and pooling demand for medicines of 
common  interest  is  expected  to  improve  the  availability  of  these  medicines,  leading  to 
positive health impacts for patients. Reducing the risk of supply disruptions will decrease 
unintended effects on patients related to sub-optimal care and delays in treatment, while 
giving the possibility to healthcare providers to reallocate resources towards patient care. 
The  proposal’s  benefits  will  materialise  over  an  extended  period,  while  the  impact  on 
patient outcomes, healthcare systems and the economy may evolve and change. 

In  terms  of  administrative  costs,  the  proposal  does  not  entail  significant  additional 
regulatory burden for businesses. For undertakings developing a strategic project, it will 
facilitate the creation or expansion of manufacturing capacities of critical medicines, their 
active substances and key inputs in the EU by fast-tracking permit-granting procedures, 
streamlining environmental assessments and providing targeted support when needed.  

The proposed measures, especially the designation and support to strategic projects as well 
as the changes  required  in  public procurement practices,  are expected to  trigger certain 
compliance  costs  for  national  authorities.  In  addition,  certain  reporting  obligations  are 
included  in  relation  to  financial  support  provided  to  strategic  projects,  national 
programmes to ensure sustainability and resilience in public procurement and collaborative 
procurement  initiatives.  These  reporting  obligations  are  expected  to  support  effective 
coordination  between  Member  States  and  ensure  coordinated  approach  not  only  on 
financial  support  to  strategic  projects  but  also  on  public  procurement  approaches  to 
maximise  impact  on  the  market  and  efficiency  gains.  Consequently,  the  proposed 
Regulation  will  generate  further  synergies  and  ensure  efficient  coordination  and 
collaboration between Member States to reach the Union’s strategic objective to strengthen 
the security of supply and availability of critical medicines.  

Finally,  while  the  proposed  measures  may  have  an  impact  on  the  prices  of  critical 
medicines (see section 6.2 on economic and social impacts), these effects are expected to 
be compensated by the anticipated savings resulting from a reduction of shortages costs 
(see section 6.1 on the current burden of medicine shortages). 

A  mapping  of  the  expected  costs  and  benefits  of  the  legislative  proposal  features  is 
presented  in  Annex  2.  The  Commission  will  continue  to  gather  and  analyse  relevant 
information and data which will be taken into account in the implementation of the Act.  

63 

 
 
GOVERNANCE, MONITORING AND EVALUATION  

The  proposal  for  the  Critical  Medicines  Act  emphasises  the  importance  of  accurate 
monitoring and governance as key mechanisms to minimise the costs of implementation. 
Accurate monitoring and governance help reduce unnecessary expenditure and contribute 
to maximising the economic benefits of the Act. 

The  proposal  establishes  the  Critical  Medicines  Coordination  Group  to  facilitate 
coordination in  the implementation of the  proposed Regulation and,  where appropriate, 
advise the Commission, to maximise the impact of the measures envisaged and to avoid 
any unintended effects on the internal market. Members will consist of Member States, 
with  a  maximum  of  two  representatives  per  Member  State,  and  the  Commission.  The 
coordination  group  will  be  chaired  by  the  Commission,  who  will  also  provide  its 
secretariat. EMA will have an observer status.  

The main tasks of this coordination group will be to:  

-  Facilitate  coordination  on  strategic  orientation  for  financial  support  of  Strategic 

Projects  

-  Enable exchanges, cooperation and coordination on public procurement policies  
-  Facilitate discussion on collaborative procurement needs  
-  Advise MSSG to prioritise, review and update vulnerability evaluations 
-  Discuss periodically on international cooperation 

This proposal introduces a requirement for Member States to inform the Critical Medicines 
Coordination Group about their intention to provide national financial support to strategic 
projects, as well as for the Commission to periodically inform the Critical Medicines Group 
of the Strategic Projects that benefited from financial support from the Union and of setting 
up any new funding possibilities. The data gathered is necessary to monitor and evaluate 
the success of this Regulation over time. 

The  Commission  will  evaluate  the  impact  of  this  proposed  Regulation  and  whether  its 
objectives have been achieved by five years after the date of application and every five 
years thereafter. The main findings of the evaluation will be presented in a report to the 
European Parliament and the Council, which will be made public.  

The following indicators have been identified to evaluate impact of the proposed measures 
on each of the objectives:  

-  Number of medicines on the Union List of critical medicines  

-  Number of critical shortages escalated to the SPOC WP for critical medicines on 

the Union list  

-  Proportion  of  critical  shortages  escalated  to  the  SPOC  WP  that  correspond  to  a 

critical medicine on the Union list  

-  Number of strategic projects identified as addressing an existing vulnerability in 

the supply chains of critical medicines  

-  Number  of  strategic  projects  for  critical  medicines  that  benefit  from  national 

financial support 

64 

 
 
 
-  Number  of  strategic  projects  for  critical  medicines  that  benefit  from  financial 

support from the Union 

-  Number of dedicated advice provided by EMA to project promoters of Strategic 

Projects with innovative manufacturing processes 

-  Number of national programmes issued 

-  Number of cross-border procurement, procurement on behalf or joint procurements 

for critical medicines and other medicines of common interest 

-  Number of countries  benefiting from  cross-border procurement, procurement on 
behalf or joint procurements for critical medicines and other medicines of common 
interest 

The monitoring will strongly rely on the work of the European Medicines Agency and the 
Executive  Steering  Group  on  Shortages  and  Safety  of  Medicinal  Products  (MSSG), 
including representatives of EU Member States, the European Commission and EMA via 
the  European  Shortages  Monitoring  Platform.  Data  with  regards  to  critical  shortages 
escalated to SPOC WP that correspond to critical medicines is collected on a continuous 
basis by the EMA (123). In addition, the recently redesigned Tenders Electronic Daily portal 
(‘TED’) serves  as an efficient tool for sharing and monitoring procurement procedures, 
including to monitor the uptake of non-price criteria in the public procurement of critical 
medicines.  

(123) Public information on medicine shortages – European Medicines Agency  

65 

 
 
 
 
ANNEX 1 - CRITICAL MEDICINES ALLIANCE RECOMMENDATIONS 

On 28 February 2025, the Critical Medicines Alliance published its first Strategic Report. 
The  report  outlines  key  findings  and  recommendations  to  enhance  the  security  and 
resilience of the EU’s Critical Medicines supply chains. 

It highlights the critical vulnerabilities within Europe’s pharmaceutical supply chains, and 
proposes  substantial  investment  in  strategic  projects,  addresses  procurement  policies, 
while advocating for a harmonised and balanced framework of stockpiling requirements 
to ensure the security of supply. Recognising the interconnected nature of pharmaceutical 
supply  chains,  the  Alliance  also  recommends  strengthening  partnerships  with  third 
countries to bolster supply resilience. 

Key Sections and Recommendations 

1.  Assessing Vulnerabilities in Supply Chains 

In April 2024, the Commission conducted a pilot exercise to assess the structural and non-
structural  vulnerabilities of selected medicines’ industrial  supply chains.  Results of this 
pilot exercise and lessons learned (including data limitations, notably in the absence of the 
proposed  pharmaceutical  legislation)  led  the  Alliance  to  identifying  the  need  to  further 
improve  the  methodology  assessing  the  vulnerability  of  products  on the  list  in  order  to 
prioritise efforts on those products most in need and to give patients the most benefit. The 
Alliance considers that an analysis of industrial vulnerabilities of medicines belonging to 
the Union list of Critical Medicines should result in a sub-set list of Critical Vulnerable 
Medicines. This assessment should be evidence-based in order for the EU to prioritise its 
policy  instruments  and  financial  efforts  on  manufacturing  supply  chains  for  which 
structural vulnerabilities have been identified. 

•  The Alliance recommends the establishment of a European list of Critical Vulnerable 
Medicines based on an assessment of structural vulnerabilities within their industrial 
supply chains (preliminary draft list by mid-2025) (the “Vulnerability Assessment”). 
•  Specifically,  the  Alliance  recommends  the  EU  to  implement  the  proposed  revised 
methodology to perform a Vulnerability Assessment of medicines. The aim being to 
achieve an actionable list at the earliest time and to conduct periodic updates of the List 
of Critical Vulnerable Medicines.  

•  Specially, the Alliance recommends the EU to maintain involvement of the relevant 
Alliance stakeholders in the development of the list of Critical Vulnerable Medicines. 

2.  Strengthening European Manufacturing 

The  structural  low  profitability  of  ‘mature  drugs’,  mainly  off-patent  generic  medicines, 
caused by intense downward price pressure,  along  with  a growing  competitiveness  gap 
with Asian producers of raw materials, intermediaries, and APIs, has led to offshoring and 
concentration of strategic commodities’ production primarily in China and India. Lower 
production costs and less stringent regulatory standards, in concomitance with consistent 

66 

 
  
and well-defined investment strategies in India and China have driven the transfer of API 
production to these countries. To assess the relevance of existing EU funding instruments 
to strengthen manufacturing capacities in the EU, the Alliance conducted an analysis of 
the existing  financial incentives tools in the  EU in addressing the identified needs. The 
Alliance  developed  a  dedicated  matrix  of  relevant  EU  programmes  and  State  aid  tools 
matched against areas most vulnerable to global supply chain disruptions.  

•  The  Alliance  emphasizes  the  need  for  an  ambitious  European  investment  plan  to 
strengthen production capacities for Critical Medicines in Europe, and for ensuring an 
EU-level coordinated approach to implement it 

•  The Alliance recommends the creation of a Critical Medicines production-specific one-
stop-shop, under an EU funding program dedicated to production of APIs and essential 
medicines. 

•  The  Alliance  recommends  that  public  financing  tools  should  be  strategically 
coordinated  with  the  EIB,  multilateral  banks  and  private  sector  banks,  to  improve 
access to private finance for high-risk projects.  

•  Specifically, the Alliance recommends the consideration of a new State aid regulation, 
restricted to  Critical  Medicines, allowing differentiated funding of large  groups and 
SMEs  within  the  EU  for  production  capacity  investment  projects,  the  launch  of  a 
dedicated IPCEI, in specific cases, when documented evidence suggest a substantial 
competitivity gain potential from beyond state-of-the-art innovation and the launch of 
a Critical Medicines SGEI coordinated at EU level to limit the risk of critical shortages, 
through a compensated public service obligation, in specific cases of products with low 
market viability.  

•  The  Alliance  further  recommends  Member  States  to  earmark  parts  of  the  shared 

management European funds to contribute to the objectives of the CMA. 

•  The Alliance should support a coordinated approach to skills development to address 
sustainability  and 

shortages  and  ensure 

long-term 

immediate  workforce 
competitiveness within the sector. 

3.  Security of Supply 

On contingency stocks 

To mitigate the risk of shortages, several Member States have implemented contingency 
stock obligations, which mainly require suppliers to maintain national reserves of Critical 
Medicines. These mandated supplier stocks are regulated by authorities but remain under 
the  ownership  of  suppliers.  However,  these  stocks  are  typically  reserved  for  a  single 
country, hindering the equitable distribution of essential medicinal products according to 
patient needs. 

Current  level  of  coordination  among  Member  States  regarding  contingency  stock  shall 
improve.  Unilateral  national  stocks  fragment  the  market  and  negatively  impact  the 
patients´ access to medicinal products, as some countries might hoard supplies, worsening 

67 

 
  
shortages  elsewhere  and  increasing  health  inequalities  and  tensions  between  Member 
States. While committees such as the EMA’s Medicines Shortages Single Point of Contact 
Working  Party  and  the  MSSG  provide  essential  technical  oversight,  there  is  a  pressing 
need for enhanced strategic coordination at the EU level. 

•  The Alliance recommends the industry, Member States and/or the EU to implement a 
comprehensive  harmonised  and  balanced  framework  on  contingency  stocks  to  be 
defined in the Critical Medicines Act. 

The  Alliance  further  put  forward  specific  recommendations  towards  targeted  parties, 
namely  applying  to  mandated  supplier  contingency  stock,  when  there  is  a  requirement 
imposed by an authority (such as a government or regulatory body), but the responsibility 
for maintaining and owning the stock remains with the supplier, and contingency stock 
done,  managed  and  controlled  by  the  Member  States  or  EU  related  to  supply  chain 
disruptions and the prevention of shortages of medicinal  products  (strategic reserves of 
Member States or EU intended for use during emergencies, such as health threats, natural 
disasters, economic crises, are excluded), 

•  Specifically,  the  Alliance  recommends  targeted  parties  to  evaluate  relevant  data 
connected  to  manufacturing  and  storage  capacities  and  use  forecasting,  when 
implementing contingency stock obligations to ensure proportionality. 

•  Specifically, 

the  Alliance  recommends 

targeted  parties 

to 

implement  stock 

management strategies to ensure prevention of waste. 

•  Specifically,  the  Alliance  recommends  targeted  parties  to  transparently  share  data 
regarding  stock  requirements  and  related  measures,  and  to  develop  a  dedicated 
database. 

•  Specifically, the Alliance recommends for the targeted parties to assess the financial 

impact of contingency stocks obligations.  

•  Specifically, the Alliance recommends the prioritisation of EU contingency stocks for 
medicinal products with low consumption (such as orphans or innovative antibiotics) 
or with limited national contingency stocks obligations based on the agreement of the 
Member States. 

•  Specifically,  the  Alliance  recommends  the  targeted  parties  to  consider  contingency 

stocks of unfinished medicinal products and relevant applicable obligations. 

On public procurement 

Procurement of medicines is a national competence, whether in the realm of pricing and 
reimbursement or the definition per se of procurement criteria. EU procurement legislation 
gives the Member States a large margin of manoeuvre in setting up the criteria for their 
tenders for the supply of Critical Medicines. Current procurement practices by Member 
States – with a particular focus on price as the most important, or even the only meaningful 
procurement criterion – have been a significant driver of the current market dynamics for 
mature  medicines.  These  market  dynamics  have  led  to  consolidation  of  suppliers  and 
outsourcing to other jurisdictions outside the EU, of all or part of the manufacturing supply 
chains. 

68 

 
 
•  The Alliance therefore recommends the EU to promote virtuous public procurement 
practices within the scope of the Critical Medicines through the systematic integration 
of  essential  procurement  criteria  like  supply  security,  resilience,  and  environmental 
impact. 

•  Specifically, the Alliance recommends the systematic application of essential criteria 
in  Critical  Medicines  public  procurement  in  the  EU,  to  be  covered  by  the  Critical 
Medicines Act.  

•  Specifically,  the  Alliance  recommends  for  the  Critical  Medicines  Act  to  promote 
public procurement practices that reward the security of supply granted notably by EU 
production  and  contributing  to  sustainable  markets;  an  appropriate  legislative 
instrument that ensures legal certainty and uniform application of the criteria in the EU 
should be identified by the Commission; in addition, an implementing act should be 
adopted providing guidelines on the application of each criterion.  

•  Specifically, the Alliance recommends the EU to implement a mechanism prescribing 

specific selection criteria and weighting ranges in tender evaluations. 

On joint procurement 

Joint Procurement between Member States (at EU level or regional level in a decentralised 
manner)  on  a  voluntary  basis  can  contribute  to  improve  availability,  affordability  and 
security  of  supply  of  Critical  Medicines,  by  strengthening  the  negotiating  position  of 
Member  States,  but  also  allowing  for  a  stronger  reliance  on  MEAT  criteria  to  ensure 
overall positive effects on the supply chain. Joint Procurement can also improve demand 
signalling to incentivise production capacities. Joint procurement should ensure that there 
is no disruption to pre-existing (national or regional) contracts and participating Member 
States should not tender nationally/locally for the same medicines for the duration of the 
European  or  regional  joint  tender.  Competing  joint  and  national  procurement  would 
generate  shortages  as  manufacturers  would  need  to  produce  for  both  tenders  without 
knowing  which  one  takes  precedence.  In  order  for  this  joint  procurement  to  be  cost-
effective from a public health perspective we need to ensure that: (i) there are objective 
criteria  in  place  for  establishing  its  scope,  also  relying  on  transparent  and  detailed 
information  about  current  stocks  within  the  EU,  (ii)  that  it  does  not  distort  the  internal 
market and (iii) that price-setting is based on a methodology jointly established with the 
member states participating. 

•  The Alliance recommends making use of Joint Procurement as a way to address the 
fragmentation of the market and to update the Joint Procurement Agreement’s scope 
to tackle shortages of medicine. 

4.  Level-Playing Field 

Ensuring a fair level-playing field between the EU and the rest of the world, where relevant 
could  create  new  incentives  for  the  production  of  Critical  Medicines.  The  Alliance  has 

69 

 
 
  
identified various factors related to manufacturing that can impact the competitiveness of 
EU-based production of Critical Medicines and their APIs within the EU. 

In parallel, within the EU, due to diverse national laws and practices (e.g., priority status 
for strategic projects in permitting procedures, assistance on access to financing, and public 
procurement  criteria),  EU  member  states  have  significant  flexibility  to  incentivize 
production  and  investment.  However,  varying  levels  of  implementation  could  create 
uncertainty for investors and the industry, leading to an uneven playing field within the 
EU 

•  The  Alliance  recommends  for  the  EU  to  promote  a  level  playing  field,  concerning 
environmental  and  social  standards  but  also  fair  competition  between  Critical 
Medicines manufactured in the EU and in the rest of the world. 

•  The  EU  to  promote  environmentally  virtuous  products  manufactured  in  the  EU, 
through the introduction of environmental criteria in public tenders. More globally, the 
EU should work to create a fair and equitable environment for the development and 
production  of  Critical  Medicines  by  identifying,  promoting  and  rewarding  best 
practices. To address the level-playing field, the EU should introduce measures and 
including  EU-based 
that  will  support  best  manufacturing  practices, 
tools 
manufacturing of Critical Medicines, while ensuring their affordability. 

•  The Commission is recommended to promptly launch a study to:  

  To identify the sources of competitive disadvantage for EU manufacturers.  
  To provide a comparison of regulatory standards between EU and non-EU and 
quantify their impact on competitiveness, environmental risk and public health 
risk 

•  The  EU  to  stand  firm  against  unfair  trade  practices  through  active  monitoring  and 
addressing of unfair trade practices, by making more effective use of Trade Defence 
Instruments  (TDIs)  in  line  with  WTO  rules,  where  relevant  in  the  pharmaceutical 
sector. 

5.  International Cooperation 

While the Alliance focuses on strengthening the global competitiveness of the European 
pharmaceutical sector by stimulating local production in order to safeguard EU’s supply 
security, the EU cannot independently produce all Critical Medicines. 

As such, international cooperation and integration of the global pharmaceutical industry is 
a key determinant in securing Critical Medicines supply. Consequently, strengthening the 
resilience of the global pharmaceutical supply chain is fundamental. Given the complexity 
and  interconnected  nature  of  today’s  global  supply  networks,  a  collaborative  approach 
emphasising  flexibility,  adaptability  and  diversification  is  essential.  In  this  context,  the 
Alliance explored ways of strengthening strategic international partnerships as a means to 
diversify international supply chains and enhance security of supply for Critical Medicines 
and reduce supply disruption risks 

70 

 
  
•  The Alliance recommends the EU to leverage existing partnerships with third countries 

and to build new cooperation. 

•  The  Alliance  recommends  the  Commission  to  pursue  partnerships  with  established 
trade partner countries, large producer and spare capacity countries, neighbouring and 
strategically positioned countries, and capacity-development countries.  

•  The methodological framework it has developed should serve as a basis to assess the 
prospects of non-EU countries for different partnerships. Notably it should consider 
third-country  policy  and 
indicators  for  production  capacity,  ease  of 
geographical/geopolitical factors. 

trade, 

6.  International solidarity 

Following  the  Commission  Communication  “Addressing  shortages  of  medicines  in  the 
EU”, the Voluntary Solidarity Mechanism (VSM) was launched in October 2023 at the 
level of the Executive Steering Group of the European Medicines Agency on Shortages 
and Safety of Medicinal Products (MSSG) to support Member States experiencing critical 
shortages. It enables EU and European Economic Area (EEA) Member States, where all 
other possibilities are exhausted, to request assistance from the MSSG in obtaining stocks 
of  a  medicine  during  critical  shortages.  However,  in  a  situation  where  Member  States’ 
capacities would not be sufficient to address each other’s needs, support from international 
partners may be sought (and vice versa). 

•  The Alliance welcomes the efforts of the MSSG in the developments of a voluntary 
solidarity  mechanism  and  recommends  the  MSSG  to  formalise  the  possibility  for 
outreach to third-country jurisdictions, as part of the Voluntary Solidarity Mechanism.  
•  The  Alliance  specifically  recommends  the  MSSG  to  explore  the  possibilities  for 
increase  of  supply  to  Europe  on  a  temporary  basis,  including  in  view  of  seasonal 
demand peaks. The Alliance recommends the MSSG to create a dedicated, structured, 
transparent,  and  secure  repository  for  information  exchange  on  Member  States’ 
experience  as  regards  their  respective  bilateral  relations  with  international  partners 
when dealing with national shortages. 

71 

 
  
ANNEX  2  –  MAPPING  OF  EXPECTED  COSTS  AND  BENEFITS  OF  THE 
LEGISLATIVE PROPOSAL 

The mapping of the expected costs and benefits of the legislative proposal features is set 
out in the table below.  

Measure  

Costs  

Benefits  

Strategic projects  

Identification 
recognition 
strategic projects  

and 
of 

Limited 
additional 
adjustment costs are expected 
for  public  authorities  and 
that 
businesses  given 
the 
recognition 
strategic 
projects  relies  on  existing 
structures 
processes 
and 
without creating an additional 
administrative layer.  

of 

authorities 
are 
Public 
to  designate  an 
requested 
(specialised) 
existing 
authority 
to  verify,  upon 
request,  if  a  specific  project 
meets  one  of  the  defined 
criteria.  

The  status  of  strategic  projects 
provides  a  range  of  potential 
to  project  promoters, 
benefits 
fast-tracked  permit-
including 
granting 
procedures, 
administrative/ 
regulatory/scientific  support  as 
well as financial incentives both at 
level.  The 
national  and  EU 
industry  will 
from 
regulatory  clarity  on  strategic 
projects  and  enhanced  visibility, 
additional 
triggering 
possibly 
private  investment  to  match  and 
complement 
public 
support for strategic projects. 

potential 

benefit 

to  benefit,  via 

Patients  and  health  systems  are 
expected 
the 
identification  and  recognition  of 
strategic  projects,  from  targeted 
efforts and investments in areas of 
greatest 
ensuring 
need, 
prioritisation of critical medicines 
is 
and 
enhance 
expected 
manufacturing 
and 
improve  supply  security  in  the 
medium to long term.   

ingredients.  This 

capacity 

their 

to 

Fast-tracked permit-
granting procedures  

to  prioritise 

The  implementation  of  these 
measures  will  be  mainly  for 
public  authorities  that  are 
the 
requested 
handling  of  permit  requests 
by  strategic  projects  and 
expedite 
permit-granting 
procedures,  incl.  procedures 
relating to dispute resolution.  

from 
Industry  will  benefit 
accelerated  procedures,  reducing 
administrative  burden,  regulatory 
clarity and predictability, allowing 
implementation 
strategic 
projects in a faster way.  

of 

Patients  and  health  systems  are 
expected  to  benefit  from  faster 
implementation  and  expanded 

72 

 
  
  
  
Environmental 
assessments 
authorisation 

and 

Public  authorities  will  be 
requested  to  coordinate  or 
perform  joint  environmental 
assessment  within  a  strict 
timeline, upon request and to 
applying 
consider 
environmental 
flexibilities 
offered  by  EU  legislation  in 
specific cases.   

These  measures 
rely  on 
existing procedures that were 
introduced  in  other  similar 
sectorial  legislation,  thereby 
limiting  the  adjustment  costs 
for  authorities  to  implement 
these measures.   

Administrative, 
regulatory 
scientific support  

and 

Public  authorities  will  be 
requested 
provide 
to 
administrative, regulatory and 
scientific 
upon 
request by a project promotor.  

support 

manufacturing capacity of critical 
medicines,  leading  to  increased 
security  of  supply  of  critical 
medicines  in  the  medium  to  long 
term.  

and 

The  industry  will  benefit  from 
accelerated 
procedures, 
reduced 
harmonized 
administrative  burden,  regulatory 
clarity  and  predictability  and 
faster implementation of strategic 
projects.  Public 
support  can 
possibly  be faster if matched and 
complemented 
private 
investments. 

by 

Patients  and  health  systems  are 
expected  to  benefit  from  faster 
implementation  and  expanded 
manufacturing capacity of critical 
medicines,  leading  to  increased 
security  of  supply  of  critical 
medicines  in  the  medium  to  long 
term, without lowering the level of 
environmental protection.  

burden 

support, 

from 
Industry  will  benefit 
reducing 
targeted 
and 
administrative 
allowing  timely  implementation 
of  strategic  projects.  An  increase 
in  predictability  by  scientific 
support  will  potentially  trigger 
additional  private  investments  by 
the 
complementing 
industry, 
public support. 

Patients  and  health  systems  are 
expected  to  benefit  from  faster 
implementation  and  expanded 
manufacturing capacity of critical 
medicines,  including  innovative 
manufacturing  methods,  leading 
to increased security of supply of 
critical  medicines  in  the  medium 
to long term. 

73 

 
Financial support by 
Member States  

This  requirement  is  expected 
to  lead  to  a  very  limited 
increase 
in  administrative 
costs  for  public  authorities 
related  to  the  obligation  to 
inform  the  CMG  about  the 
intention to provide financial 
support to Strategic projects.   

financial  support 

Public authorities will be able to 
to 
prioritise 
strategic  projects  addressing  a 
supply  chain  vulnerability.  The 
allocation  of  funding  available  at 
national  level  will  remain  at  the 
discretion of each Member State.  

Public  authorities  will  be  able  to 
share  their  efforts  and  coordinate 
their  approach  in  the  CMG  by 
supporting 
strategic 
different 
projects in a complementary way, 
leading  to  more  cost-efficiency 
and 
redundancies. 
Member States will also be able to 
rely  on  additional  guarantees  to 
ensure 
the  critical  medicinal 
products  remain  available  in  the 
Member  States  where  they  are 
marketed. 

avoiding 

of 

The 
publication 
the 
the 
Commission  guidance  on 
application of State aid rules in the 
context  of  the  Critical  Medicines 
Act  further  creates  clarity  and 
legal  certainty  on  the  possible 
ways Member States may support 
strategic projects,  benefiting both 
national authorities and industry.  

Patients  and  health  systems  are 
expected to benefit from increased 
manufacturing capacity of critical 
medicines  and  their  ingredients, 
improving the security of supply, 
the 
of  critical  medicines 
medium  to  long  term.  Where 
financial 
been 
support 
has 
granted,  patients 
and  health 
from 
systems  will 
additional guarantees to ensure the 
availability in  the Member States 
where  the  critical  medicine  is 
marketed. 

benefit 

in 

Financial 
from the Union  

support 

The  Commission  may 
strategic  projects 
support 
the  current  MFF, 
under 

Industry  may  benefit  from  new 
funding  opportunities  under  the 
current MFF, especially under the 

74 

 
including  via  existing  EU 
as 
programmes 
EU4Health,  Horizon  Europe 
and 
Europe 
Programme.  

Digital 

such 

The  proposal  appropriates 
around  EUR  40  million  in 
2026  and  2027,  to  finance 
manufacturing 
investments 
and  manufacturing  capacity. 
be 
These 
the 
redeployed 
existing financial envelope of 
the  EU4Health  programme, 
without  change  in  the  total 
envelope. 

costs  will 
within 

Financial support at EU level 
after 2027 will depend on the 
outcome  of 
the  political 
discussions on the next MFF.  

Public 
procurement  and 
related measures  

Obligation  to  apply 
procurement 
requirements  other 
price-only, 
than 
promoting 
the 
resilience  of  supply 
in the Union 

Requires  public  authorities 
and procurers to adapt their 
procurement practices.  

The  industry  will  also  need 
to adapt internal processes to 
meet this new requirement.  

The requirement may have an 
impact  on  pharmaceutical 
prices which will depend on a 
large number of factors, incl. 
the  type  of  critical  medicine, 
specific 
market 
situation, 
or 
non-price 
requirements  used  by 
the 
procurer,  their  weight,  etc... 
(see section 6.2, affordability 
of medicines) 

criteria 

75 

programme 

EU4Health 
and 
facilitated  access  to  other  EU 
funding  opportunities,  including 
cohesion  funds,  when  receiving 
the  STEP  Seal 
for  Strategic 
projects addressing a supply chain 
vulnerability,  untapping  the  full 
potential  of  the  existing  funding 
opportunities at EU level.  

The increase in public funding and 
the  visibility  offered  through  the 
STEP Seal are expected to trigger 
complementary 
private 
investments. 

investments 

Patients  and  health  systems  are 
expected  to  significantly  benefit 
from  more 
in 
strategic  projects  and,  thereby, 
increased  security  of  supply  of 
critical  medicines  in  the  medium 
to long term.   

Change  in  public  procurement 
practices  is  expected  to  bring 
significant benefit to patients and 
health systems, by ensuring better 
security of supply and availability 
of  critical  medicines.  A  more 
resilient  supply  chain  means  less 
supply  disruptions,  hence  lower 
costs  of  dealing  with  shortages 
and  a  more  efficient  use  of 
resources.  Patients  will  benefit 
from 
of 
treatments,  including  less  side 
effects and adverse effects. 

interruptions 

less 

Industry will benefit from clearer 
criteria  of  procurements  and 
incentives  to  promote  resilience 
and  may 
investment 
trigger 
decisions in EU supply chains. 

 
  
  
Obligation  to  apply 
procurement 
requirements 
favouring  suppliers 
a 
producing 
significant 
proportion of critical 
medicines in the EU 
in  case  of  high 
dependency  on  a 
limited 
single  or 
number  of 
third 
countries 

to 
national 

Requirement 
establish 
programmes 
supporting  security 
of  supply  of  critical 
medicines  

for 

Specific  public  procurement 
procedures  will  have  to  be 
implemented 
certain 
critical medicines for which a 
third 
high  dependency  on 
countries  has  been  identified 
through 
vulnerability 
evaluation.  This  will  imply 
adjustment  costs  for  both 
public 
authorities/ 
procurers and the industry.  

a 

The requirement may have an 
impact  on  pharmaceutical 
prices which will depend on a 
large number of factors, incl. 
the  type  of  critical  medicine, 
market  situation, the existing 
capacity in the EU, etc... (see 
section  6.2,  affordability  of 
medicines) 

Public  authorities  will  be 
requested  to  prepare  national 
programmes  supporting  the 
security  of  supply  of  critical 
medicines  in  the  context  of 
public  procurement.  These 
national  programmes  might 
also 
and 
reimbursement policies.  

pricing 

cover 

effort 

task  will 

represent 
This 
administrative 
for 
public  authorities  that  will 
need  to  coordinate  this  work 
at  national  level,  especially 
for the initial development of 
these programs. 

Administrative  costs  for  the 
industry  are  expected  only 
for  the  monitoring  of  policy 
at  national 
developments 
level.  

76 

Change  in  public  procurement 
practices  is  expected  to  bring 
significant benefit to patients and 
health systems, by ensuring better 
security of supply and availability 
of critical medicines. By reducing 
dependencies  on  third  countries, 
health  systems  and  patients  are 
expected  to  be  less  prone  to  the 
risk of shortages, leading to lower 
costs  of  dealing  with  shortages 
and  a  more  efficient  use  of 
resources.  Patients  will  benefit 
from 
of 
treatments,  including  less  side 
effects and adverse effects. 

interruptions 

less 

Industry will benefit from clearer 
criteria  of  procurements  and 
incentives  to  promote  resilience 
and  may 
investment 
trigger 
decisions in EU supply chains. 

This  measure  will 
increase 
predictability  for  the  industry 
and procurers given that national 
programmes will define the public 
procurement 
framework 
applicable  at  national  level.  The 
industry will benefit from  clearer 
of 
criteria 
to 
procurements 
promote 
resilience  and  may 
trigger investment decisions in EU 
supply chains. 

in 

pricing 

Change  in  public  procurement 
practices,  incl.  encouraging  the 
use of multiple winner tenders and 
potentially 
introducing 
considerations  on  security  of 
and 
supply 
reimbursement 
is 
policies 
expected 
to  bring  significant 
benefit  to  patients  and  health 
ensuring  better 
systems,  by 
security of supply and availability 
of  critical  medicines.  A  more 
resilient  supply  chain  means  less 
supply  disruptions,  hence  lower 
costs  of  dealing  with  shortages 

 
and  a  more  efficient  use  of 
resources.  Patients  will  benefit 
from 
of 
treatments,  including  less  side 
effects and adverse effects. 

interruptions 

less 

industry 

This measure is expected to bring 
benefits 
that  are 
to 
increasing 
confronted  with  an 
number  of  national  requirements 
for  contingency  stocks.  It  should 
support proportionality in relation 
to  the  medicines  concerned,  size 
of requested stocks and timeline to 
build  them.  The  industry  should 
from  additional 
also  benefit 
predictability 
of 
transparency) and flexibility in the 
reallocation  of  stocks  between 
countries  in  cases  of  shortages 
(principle of solidarity).  

(principle 

This measure is expected to bring 
significant benefit to patients and 
health  systems  as  it  will  ensure 
that  national  measures  do  not 
create shortages in other countries, 
and  it  will  reduce  barriers  to 
reallocate  stocks  if  needed  to 
address a critical shortage. 

Public authorities in the Member 
States will benefit from additional 
support by the Commission when 
they  consider  a  cross-border 
procurement  initiative,  including 
administrative  and  legal  support, 
decreasing administrative costs on 
them.  

those 

Patients  and  health  systems, 
especially 
small 
countries,  are  expected  to  benefit 
from  increased  access  to  and 
availability  of  medicines  of 

from 

related 
national 
stock 
and 
security  of 

Safeguards 
to 
contingency 
requirements 
other 
supply measures  

authorities 

Public 
are 
requested  to  avoid  negative 
impact  of  national  measures 
on  security  of  supply,  in 
particular  contingency  stock 
other 
requirements, 
Member States.  

on 

a 

result, 

As 
authorities  will  have 
consider  and  mitigate 
impacts  of 
measures 
countries.  

public 
to 
the 
their  national 
other  EU 

on 

Collaborative 
procurement  

Commission 
facilitated  Member 
States’  cross-border 
procurement  

The  Commission 
will  require 
human resources.  

support 
the  necessary 

77 

 
  
  
 
 
common  interest  in  the  short  to 
medium term.  

The requirement may support the 
affordability  of 
the  concerned 
medicines,  depending  on  various 
type  of 
factors  such  as 
the 
medicine 
to 
the 
collaborative  procurement, 
volumes and the market size. (see 
section  6.2  on  affordability  of 
medicines) 

subject 

the 

Commission 
procurement 
on 
behalf  of  or  in  the 
name  of  Member 
States  

The  Commission 
will  require 
human resources.  

support 
the  necessary 

The  industry  may  benefit  from 
lower transaction costs by dealing 
with fewer fragmented authorities, 
also  products  may  be  brought 
earlier to market. 

Public authorities will be able to 
ask  the  Commission  to  perform 
procurement on behalf of or in the 
name 
States, 
of  Member 
leveraging the aggregated demand 
and 
substantially 
administrative  costs  on  them.  It 
should lead to economies of scale 
by replacing national procurement 
mechanism at national level.  

reducing 

from 

those 

Patients  and  health  systems, 
especially 
small 
countries,  are  expected  to  benefit 
from  increased  access  to  and 
availability  of  critical  medicines 
and  other  medicines  of  common 
interest  in  the  short  to  medium 
term. 

The requirement may support the 
affordability  of 
the  concerned 
medicines,  depending  on  various 
type  of 
factors  such  as 
the 
medicine 
to 
collaborative  procurement, 
the 
volumes and the market size. (see 
section  6.2  on  affordability  of 
medicines) 

subject 

the 

Industry may benefit from lower 
transaction  costs  by  dealing  with 

78 

 
Joint procurement   The  Commission 

support 
the  necessary 

will  require 
human resources.  

fewer fragmented authorities, also 
products may be brought earlier to 
market. 

Public authorities will be able to 
ask  the  Commission  to  perform 
joint  procurement,  leveraging  the 
aggregated  demand  and  reducing 
substantially  administrative  costs 
on  them.  It  will  lead  to  economy 
of  scale  by  replacing  national 
at 
procurement  mechanism 
national level.  

Patients and healthcare systems, 
especially  of  small  countries,  are 
expected to benefit from increased 
access 
to  and  availability  of 
critical  medicines  and  other 
medicines  of  common  interest  in 
the short to medium term. 

The requirement may support the 
the  concerned 
affordability  of 
medicines,  depending  on  various 
type  of 
factors  such  as 
the 
to 
medicine 
collaborative  procurement, 
the 
volumes and the market size. (see 
section  6.2  on  affordability  of 
medicines) 

subject 

the 

Industry may benefit from lower 
transaction  costs  by  dealing  with 
fewer fragmented authorities, also 
products may be brought earlier to 
market. 

International 
cooperation  

Requirement 
to 
explore  possibilities 
concluding 
of 
strategic 
partnerships  

The 
will 
Commission 
explore  potential  strategic 
partnerships with like-minded 
countries.  

Diversification  of  supply  through 
exploring strategic partnerships is 
to  bring  significant 
expected 
benefit  to  patients  and  health 
systems,  by 
ensuring  better 
security of supply and availability 
of critical medicines. 

79 

 
 
 
  
  
 
ANNEX 3 - COMPETITIVENESS CHECK  

1.  OVERVIEW OF IMPACTS ON COMPETITIVENESS 

Dimensions of 
Competitiveness 

Impact of the initiative 

(++ / + / 0 / - / -- / n.a.) 

References to sub-sections of 
the main report or annexes 

Cost and price competitiveness  +/++  

Sections 6.2 and 6.4 of the SWD 

International competitiveness  

+/++ 

Capacity to innovate 

SME competitiveness 

0/+  

0/+ 

2.  SYNTHETIC ASSESSMENT  

Section 6.2 of the SWD 

Section 6.2 of the SWD 

Section 6.2 of the SWD  

The  proposed  Critical  Medicines  Act  is  expected  to  improve  EU  competitiveness  by 
supporting  the  functioning  of  the  Single  Market,  enhancing  domestic  production 
capabilities and  reducing  external  dependencies,  as  well as  by  supporting  innovation  in 
new manufacturing processes. 

Cost and price competitiveness  

The  CMA  proposal  is  expected  to  have  a  positive  impact  on  the  competitiveness  of 
pharmaceutical companies operating in the EU by encouraging investment in resilient and 
modern  supply  chains  and  scaling  up  production  facilities  in  the  EU.  For  undertakings 
developing a strategic project, it will facilitate the creation or expansion of manufacturing 
capacities of critical medicines, their active substances and key inputs in the EU by fast-
tracking  permit-granting  procedures,  streamlining  environmental  assessments  and 
providing  targeted  support  when  needed,  without  leading  to  significant  additional 
regulatory burden for businesses.  

International competitiveness  

The  CMA  proposal  aims  at  strengthening  supply  chain  resilience  and  reducing  global 
dependencies  by  more  actively  supporting  reshoring  and  investment  in  EU-based 
production  capacity.  The  proposed  measures,  including  financial  support  to  strategic 
projects  and  public  procurement  requirements,  are  expected  to  support  European 
manufacturers’ ability to compete with suppliers located elsewhere. 

Capacity to innovate 

The  proposed  measures,  in  particular  financial  incentives  as  well  as  regulatory  and 
scientific  support  to  strategic  projects,  are  expected  to  support  innovation  in  new 
manufacturing processes with the objective to increase efficiency and support sustainable 
production.  

SME competitiveness 

Similar effects are expected for SMEs as compared to large companies for the different 
competitiveness dimensions. Nevertheless, specific measures of the proposed Regulation 
regarding administrative, regulatory and scientific support to pharmaceutical companies 
have a specific focus on Small and Medium-sizes Enterprises (SMEs).   

80 

 
 
3.  COMPETITIVE POSITION OF THE MOST AFFECTED SECTORS  

Producers  of  critical  medicines,  their  active  substances  and  key  inputs  as  well  as  other 
actors of the pharmaceutical supply chain are expected to be the most concerned by the 
proposed measures which aim at increasing manufacturing capacity in the EU and fostering 
supply chain resilience and diversification.  

In  addition,  the  CMA  proposal  is  expected  to  have  a  positive  impact  on  the  healthcare 
sector, including on healthcare providers such as pharmacists, by reducing the likelihood 
and impact of shortages and therefore the resulting costs.  

81