Strategic Report published by the Critical Medicines Alliance

On 28 February 2025, the Critical Medicines Alliance issued its Strategic Report, which contains key industry challenges and recommendations to strengthen the security and robustness of the supply chains of critical medicines in the EU.

Established in 2024, the Critical Medicines Alliance (CMA) aims to secure the supply of critical medicines in the EU and prevent shortages.

In recent years, there has been growing concern about the supply of critical medicines. Factors such as the COVID-19 pandemic and geopolitical instability have exposed the vulnerability of pharmaceutical supply chains.

Therefore, the Alliance has identified the following key industry challenges for critical medicines:

• Over-dependence on a restricted number of API and raw material-suppliers with a limited geographical diversification (e.g. China and India produce 55% of all APIs).
• Decline of the EU manufacturing sector: The EU manufacturing base is declining, affecting both generics (90% of critical medicines) and innovative medicines, from early stages of production to marketing authorization.
• Market consolidation: A limited number of manufacturers increases the risk of shortages of critical medicines.
• Low levels of competitiveness and investment in the API and generics sector.
• Fragmented value chain: Division between upstream (intermediates, API production) and downstream (packaging, formulation) activities, restricting visibility and investment in upstream suppliers.

To address these challenges, the Critical Medicines Alliance has formulated serveral key actions for the Commission, Member States and the Critical Medecines Alliance Stakeholders. In addition to the main objective of coordination and cooperation between industry, Member States and the EU, the CMA recommends the following three key actions:

• Strengthening the EU manufacturing sector and safeguarding its competitiveness.
• Improvement of security and diversification of supply: Strengthen supply chains through strategic alliances with third countries, while encouraging and incentivising the expansion of production of APIs and critical intermediates where there is reliance on a small number of third countries.
• Improvement of EU- supply and manufacturing conditions: Enhance supply and manufacturing conditions by fostering local, sustainable, and robust production, including enhancing the production of raw materials, active pharmaceutical ingredients and pharmaceuticals.

The findings and recommendations of the Strategic Report are intended to contribute to the proposed Critical Medicines Act as a European legal framework to ensure the long-term supply of critical medicines. The EU Commission presented the Critical Medicines Act on 11 March 2025.