Commission cautious on onshoring drug production to the EU

Onshoring drug manufacture to within EU territories is not the aim of efforts to address drug shortages in the EU, a European Commission official said during Health Forum Gastein event.

Onshoring or 'reshoring' pharmaceutical production gained prominence after the COVID-19 pandemic, which exposed the EU's heavy reliance on non-EU countries for active ingredients and essential medicines. This dependency was exacerbated when those countries adopted protective trade measures, further straining EU supply.

Last year, shortages of certain medicinal products, particularly antibiotics for paediatric care, also created significant challenges for EU governments too.

Efforts to address this dependency began in December when the European Medicines Agency (EMA) published a list of critical medicines, identifying over 200 essential active substances for Europe's healthcare systems. This initiative was followed in April by the launch of the Critical Medicines Alliance, a voluntary platform for cooperation aimed at strengthening the supply of critical medicines.

Despite widespread calls for "reshoring, onshoring, and bringing production back to the EU", Tarik Derrough, from the Commission’s Health Emergency Preparedness and Response Authority (DG HERA), made it clear that reshoring is not an objective of the EU executive.

"Yes, there is a will to have some sort of industrial base in the EU, and reindustrialisation is part of critical medicine production in the EU. But this is not the goal," he told the European Health Forum Gastein.

In a communication on the health sector of October 2023, the Commission touted coordination of public procurement practices at EU level, diversification of global supply chains through strategic partnerships, as well as boosting Europe's capacity to innovate and produce critical medicines.

The newly launched Critical Medicines Alliance aims to identify supply chain vulnerabilities within the EU to prevent and respond more effectively to drug shortages.

Derrough emphasised that, as part of this alliance, reflection groups have been set up to assess work with non-EU countries. He acknowledged that "some raw materials will probably never be produced in the EU, as there’s no industry for it anymore".

"The strategic autonomy of the Union is not on the agenda,” in the context of non-EU partnerships, he said, suggesting that the EU's approach remains focused on international cooperation rather than reshoring.

That reflects the Commission’s ongoing efforts to address shortages through global partnerships rather than increasing internal production. The Commission had previously advocated for a network of international partners to bolster the resilience of critical medicine supply chains.

The recently published Draghi report also supports this approach, recommending trade diversification to mitigate medicine shortages without undermining the EU’s trade position through protectionist measures.

It suggests establishing new production sites in strategic regions outside the EU, strengthening existing supply chains, and developing partnerships with international stakeholders while optimizing trade agreements.

While no concrete timeline has been set for the presentation of the Critical Medicines Act, it is expected to be proposed in the first half of the new legislative term by the designated Commissioner, Oliver Varhelyi, pending his confirmation by the European Parliament.