Press remarks by Executive Vice-President Ribera:

We bring good news to all Europeans. On the path to a safer Europe, we identified the importance of taking steps regarding critical medicines to cut vulnerabilities and weaknesses, especially in cases of production or market failures.

We are convinced that protecting our infrastructures and avoiding unreliable dependencies are essential for security. Today, Commissioner Várhelyi and I announce a crucial proposal for a Critical Medicines Act. This law is one of the key actions in the Competitiveness Compass to address the shortage of essential medicines. Reliable and diversified access to critical medicines is vital for Europes future.

This initiative represents a significant step forward to ensure these essential medicines remain accessible, affordable, and available to all Europeans who depend on them. This proposal is not just a matter of public health, but also of security and resilience. According to the European Council, a 360-degree approach to security is key. Security includes defense and equipment, but also being prepared for cyberattacks or a virus outbreak.

The COVID-19 pandemic exposed the fragility of our pharmaceutical supply chains and made evident the urgent need for a comprehensive strategy in this field. We have all seen the devastating consequences of these shortages. This is why we are working to be prepared to confront any challenge of this kind in the future.

It is a complex global landscape, and the proposal provides measures to address supply chain vulnerabilities. It introduces measures to address market failures, whereby certain European countries do not have access to medicines of common interest. It also introduces a wide array of measures and opportunities for Member States and the Commission to work together through collaborative procurement and to coordinate strategic projects.

It notes that private investment alone may not be enough, so in order to achieve the objectives of the proposal, we need to rely on targeted financial support from the Member States as well as from the European Union. For example, if a critical medicine is no longer produced, Member States could hire and compensate a company to quickly set up the production needed to ensure we have enough in times of crisis.

This is why today we also published updated guidance on how we could play according to our existing state aid rules so that Member States address collectively security of supply issues regarding critical medicines. I think that todays proposal will help in this field in a very important manner.

With this proposal, we are safeguarding health, securing our future, and trying to remain at the forefront of innovation, stability, and care for its citizens. It is my great pleasure to share this podium with Commissioner Várhelyi to introduce this very important act.

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Press remarks by Commissioner Várhelyi:

Thank you very much. We have just presented at the plenary the proposal which has been long awaited, something that was long overdue, and this is why this Commission has made sure that this is adopted in the first 100 days. Today is the 100th day, and the proposal is already with the co-legislators. The Act is a key part of our holistic approach to support both Member States in addressing their persistent problems in terms of access to medicines, but it should also contribute to the supply of critical medicines and to improve the competitiveness of our pharmaceutical sector.

Overall, it aims to ensure a high level of public health protection, and also to support the security of supply, or as it was already quoted at the plenary, the strategic autonomy when it comes to medicines in Europe. In recent years we have seen a peak of medicine shortages, only in 2019 the highest numbers were registered with over 14,000 notifications only in 1 year. We also see that the member states are recording very high numbers of shortages, more than 200 registered in 2023. We also see that these are very basic and essential medicinal products that are needed for example to continue to help people with cardiovascular conditions, with diabetes, or preventing thrombosis during operations in hospitals.

For certain medicines, access also varies largely between the member states, there is clearly a persistent challenge with certain medicines of common interest depending on the size of the market and also depending on the use of these products. I have in mind the rare diseases or the orphan drugs, or even the new antibiotics that we will need.

All this creates a serious risk to public health, especially when it comes to the reliable operation of our healthcare systems. We had to look why we have these problems and challenges. We came to the conclusion, also building on the work of the Critical Medicines Alliance which has just published its report, that more than half of the cases concern problems in the pharmaceutical value chain, mainly related to the manufacturing part.

We see shortages both of production capacities when it comes to medicinal products but also when it comes to active ingredients. We also see very clearly that we rely largely on a very concentrated geographic area, on a few countries outside the European Union, which makes us dependent but also vulnerable and this is why we need to address this problem head on.

It is also clear that where there is a surge in demand, we have to be able to adapt ourselves. The best way to do that is to be able to control the production, also here in Europe. Todays proposal aims to tackle these issues, Executive Vice-President Ribera already mentioned our proposal for member states to use strategically the state aid rules of the European Union in a facilitated way so they can re-attract investments back into Europe for manufacturing pharmaceutical products. We also have on the table the reform proposal for the Pharmaceutical regulation, pending in the Council and the European Parliament, where we wanted to strengthen already the role of the European Medicines Agency to have a better monitoring system but also a faster possibility to react.

It is very clear that without strengthening the industrial base in Europe and their production capacities, we are not going to be able to address this problem. Now we need to encourage and facilitate the investment, this is why it is very important that, with the introduction of these facilities under our state aid rules we are creating the opportunity to consider these projects to be of a strategic nature, meaning much faster procedures, less complex procedures, less costly and more predictable procedures for those who are ready to engage with us to bring these productions back.

The state aid rules of course have their own limits because we also see that many of these products that we aim to bring back are products where the economic viability of bringing them back is hard to create even with state aid. This is why we are looking at new ways of international partnerships that maybe we can also create these value chains much closer to our markets.

The other big tool we are putting on the table is again, maybe not that new, but new in the sense that it is capable of creating markets. It is very clear that what you see as shortage or lack of access to medicines, or problems in terms of access to medicines, is a market failure. Market failures are normally not addressed through regulatory means but by market means and this is why we wanted to tap into the experience of the Critical Medicines Alliance and to use joint procurement in a more strategic way to create the necessary demand, so that the necessary supply is also there. The combination of bringing back production and the creation of markets will have a much higher level of security of supply, this is our calculation with this proposal. We can combine markets, we can make markets economically viable markets that are not currently viable.

We will see how fast the co-legislators will go, but the urgency is very clear. We have seen already from the debate in the European Parliament, this is a problem that has occurred to all of us during the Covid pandemic, but this problem has only got bigger with time. So we need to act now and we need a solution on the ground as fast as we can, thank you.