The European Union has taken a significant regulatory step today with the advancement of the Critical Medicines Act, a legislative initiative designed to address persistent vulnerabilities in the region’s pharmaceutical supply chain and mitigate chronic shortages of key medicines. Following several years characterised by recurrent supply crises, particularly notable during the winter months when antibiotic availability had reached critical lows, the European Medicines Agency (EMA) now confirms that this winter, the EU does not foresee antibiotic shortages—a testament to recent years’ supply chain interventions.

Historically, antibiotic shortages were an acute challenge for the European market, with 19 European Economic Area (EEA) countries experiencing significant scarcities as recently as January 2024. Amoxicillin, Europe’s most dispensed antibiotic, was on the EMA shortages watchlist until June 2025; its removal marks a positive inflection. Despite this progress, the EMA reported that as of today, 36 medicines remain in short supply in the EU, though none are antibiotics and most are specialty medicines, such as certain chemotherapies or antipsychotics, with alternatives available. Nevertheless, the region’s broader vulnerability to medicine shortage crises remains under scrutiny from both regulatory bodies and the European Court of Auditors, with recent reports indicating that overall drug scarcities have reached record levels in the past two years.

The roots of these vulnerabilities are multifaceted. The COVID-19 pandemic exposed structural risks, especially concerning disruptions in international supplies and the EU’s reliance on foreign manufacturers for both active pharmaceutical ingredients (APIs) and finished pharmaceuticals. The Wilfried Martens Centre for European Studies estimates that up to 80% of APIs used in Europe, and approximately 40% of finished medicines, are sourced from India and China. Over the last two decades, European production of APIs has dropped from over 50% to less than 25%, amplifying strategic security concerns about medicine self-sufficiency.

In response, the Critical Medicines Alliance—an EU stakeholder group—has identified low production costs abroad, reduced regulatory burdens, and stronger investment incentives in Asian manufacturing markets as core causes behind Europe’s shrinking industrial base. Now, at the legislative level, the Critical Medicines Act is engineered to strengthen EU-based drug manufacturing, with a particular focus on securing the supply of medicines listed on the EU’s 2023 register of critical medicinal products. These include therapeutics considered essential due to their use in life-threatening conditions or in instances where few or no therapeutic alternatives exist.

The Act’s centrepiece is a newly proposed ‘Buy European’ principle within public procurement. This will give priority to suppliers with significant manufacturing capacity within the EU when vulnerability—such as over-reliance on a single third-party country—is detected. Under these provisions, European public contracting authorities may set procurement criteria that elevate supply security above cost alone. This marks a policy departure from traditional, purely price-based public procurement; instead, the new approach is designed to foster both investment in domestic pharmaceutical production and long-term resilience against external production shocks.

However, challenges remain. While the EMA’s improved risk monitoring systems have reduced the acute threat of antibiotic shortages this winter, the agency and the European Court of Auditors both acknowledge that the regulatory ecosystem for responding to future shortages is still evolving. The new Act is in its infancy, and a practical framework for rapidly reallocating manufacturing capacity or managing cross-border supply shocks is not yet fully operational. Key implementation questions include how public authorities will balance cost and resilience and the speed at which strategic pharmaceutical manufacturing can realistically be returned to the region.

In summary, with the new Critical Medicines Act, the European Union is visibly prioritising regional pharmaceutical resilience, transparency, and supply security to protect healthcare systems from future disruptions. Business leaders, manufacturing managers, procurement professionals, and regulatory teams across the EU pharma sector should closely monitor the rollout of procurement reforms and the Act’s follow-on investment incentives as they recalibrate their European operations and sourcing strategies for the post-pandemic era.