Addressing Supply Chain Vulnerabilities and Supply Shortages of Critical Essential Medicines: The Latest EU Legislative Proposal for a Critical Medicines Act

Challenges to global supply chain integrity for critical essential medicines

The COVID-19 pandemic has heightened the focus on effectively managing supply disruptions of life-saving, high-quality medicines. Additionally, ongoing geopolitical instability has begun to threaten global supply chains of essential medications.

Essential or critical medicines are those that effectively and safely manage the priority healthcare needs of the population at large in relation to their public health relevance, evidence of benefits and harms, as well as their cost-effectiveness and affordability. Unsurprisingly, supply disruptions and uncertainty of continued supplies of such critical medicines (usually low profit margin products) present considerable risks to patients and public health, and thus threaten the proper functioning of healthcare systems where therapeutic interventions play a critical role.

It is now widely recognised that several market factors are contributing to the vulnerabilities of supply chains for these critical medicines. In order to contain the costs for manufacture, greater reliance is placed on single-source manufacturers of key ingredients, in countries such as China and India, through contracting practices with the effect of encouraging consolidated supply.  This has resulted in a lack of investment in manufacturing capacity for such low-profit but essential medicines and a shortage of skilled workforce in the developed economic regions, such as North America and Europe. 

Latest EU legislative proposal to strengthen supply chain security for critical essential medicines

The European Commission published on 11 March 2025 its proposal for the REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL laying a framework for strengthening the availability and security of supply of critical medicinal products as well as the availability of, and accessibility of, medicinal products of common interest, and amending Regulation (EU) 2024/795, also referred to as the Critical Medicines Act (the CMA). 

Legislative and policy objectives

The primary objective of the legislative proposal is to address severe supply shortages and reduce dependencies of manufacturers in non-EU countries for essential medicines and their ingredients.  This will be achieved by strengthening their supply chain security and availability within the EU, through proper investment and procurement coordination as well as strengthening EU manufacturing capacity.

The CMA is built upon the reform of the EU pharmaceutical legislation, which has highlighted that medicine shortages are increasingly problematic in the EU as a complementary legislative tool already envisaged in the revision of the EU pharmaceutical legislation. 

Legislative process

The Commission has fast-tracked the CMA, opting not to conduct a dedicated impact assessment or public consultation. The proposed legislative approach is in recognition of the pressing public health need for swift legislative action to address supply chain vulnerabilities. Moreover, there exists a repository of rich evidence already gathered and analysed in the preparation for the reform of the EU pharmaceutical legislation, which involved comprehensive consultations with stakeholders through the structured dialogue on the security of medicines supply as well as the evidence derived from the report adopted by the Critical Medicines Alliance of 28 February 2025.  

An outline of the substance and structure of the legislative proposal

The CMA is not expected to create significant additional regulatory burden. Rather, it will facilitate the creation or expansion of manufacturing capacities for critical medicines, their ingredients and key inputs in the EU by fast-tracking permit-granting procedures, streamlining environmental assessments and providing targeted support when needed. Therefore, the CMA covers the following key considerations:

Strengthening the EU’s security of supply

• Chapter II obliges Member States and the Commission to work together to strengthen the security of supply and continuous availability of critical medicines in the EU through measures to take full advantage of the potential of the internal market.

Enabling conditions for investment 

• Defined criteria and procedure for recognising ‘Strategic Projects’ as contributing to the security of supply of essential medicines.
• Requirement for Authorities of Member States to fast track granting of relevant permits related to Strategic Projects according to the applicable EU and national laws.
• Strategic Project promoters to be granted status of highest national significance in Member States according to local framework where that exists, to coordinate or streamline environmental assessment and administrative, regulatory, and scientific support.
• Prioritisation of national financial support for Strategic Projects, guided by the outcome of supply chain vulnerability evaluations and the strategic orientations of the Critical Medicines Coordination Group (see below).
• Potential access to EU funding throughout the duration of the Multiannual Financial Framework 2021-2027.

Demand side measures 

• Greater use of procurement requirements other than price in the context of public procurement procedures by contracting authorities in the Member States, unless justified by market analysis and considerations related to the financing of health services.
• Procurement requirements for contracting authorities favouring suppliers that manufacture a significant portion of these critical medicines in the EU based on a proper vulnerability analysis.
• Involvement of the European Commission in deploying different collaborative procurement tools for critical medicines and other medicines of common interest, depending on the context and respecting the principles of subsidiarity and proportionality.

Critical Medicines Coordination group

• Establishing the Critical Medicines Coordination Group with a defined remit to facilitate application of the CMA including:
  • Coordination on strategic orientation of financial support for strategic products;
  • Exchanges on the national programmes and enable cooperation and coordination of Member States' public procurement policies;
  • Discussion of the need for a collaborative procurement initiative for a given product;
  • Closer coordination with the Medicine Shortages Steering Group (MSSG), the European Medicines Agency and national authorities to provide the order of priority of critical medicinal products for vulnerability evaluation and propose review / update of existing evaluations where necessary. 

International cooperation 

• Requirement for the Commission to explore possibilities of:
  • Concluding strategic partnerships aimed at diversifying the sourcing of critical medicinal products and their active substances with key inputs to increase the security of supply of critical medicinal products in the EU.
  • Building on existing forms of international cooperation to support supply chain security and continued supplies and production of critical essential medicines.

The adoption of the CMA is expected for Q4 2025, with implementation starting in 2026. 

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