In the winter of 2022, Europe ran short of one of medicine’s workhorses. Amoxicillin — both on its own and in combination with clavulanic acid — became scarce as seasonal demand for pediatric formulations jumped by 500% and manufacturers could not keep pace. “We had shortages throughout the European Union [EU],” said Monica Dias, PharmD, PhD, head of supply and availability of medicines at the European Medicines Agency (EMA). “We had to ask [the manufacturers] to increase production capacity because we had an increase in demand, and we didn’t have enough supply of these products for European patients.”

The amoxicillin crisis was eventually resolved, but it exposed a deeper fragility. Between January 2022 and October 2024, the EU ran critically short of 136 medicines — and rising demand was only one of the reasons. Now the bloc is trying to move from firefighting individual shortages to designing resilience into its drug supply as a matter of strategy. That effort runs through the new Critical Medicines Act, provisionally agreed in May, and a sweeping EMA program to map where Europe’s medicine supply is most likely to break. The catch is that a supply chain built for resilience costs more than one built for cheapness — a trade-off that could reshape drug prices and, ultimately, which patients get which treatments.

A Chain Full of Weak Points

Shortages hit the EU regularly, and geopolitics is often the trigger. Tensions around the Strait of Hormuz are reportedly affecting the supply of raw materials used in common drugs such as aspirin, paracetamol, and antibiotics. In 2018, African swine fever tore through pig herds in China — the source of 80% of the world’s heparin. According to an exploratory report by the European Commission, half of all shortages come down to manufacturing, and the EU leans heavily on China and India for the essential active pharmaceutical ingredients (APIs) at the heart of many drugs.

The risks now extend well beyond supply and demand. Professor Alexander Vlaar, MD, PhD, MBA, head of the ICU department at Amsterdam UMC in Amsterdam, Netherlands, and chair in its division of operating theatres, anesthesiology, ICU, and central sterilization services, has been studying points of vulnerability in supplying hospitals. Hacking, he said, is increasingly affecting healthcare — not just the supply of drugs, but blood cross-matching services and electronic patient records. In March, Stryker, a multinational supplier of crucial equipment including defibrillation, glucose, and cardiopulmonary resuscitation devices, was hacked, affecting a large number of supplies.

For now, when one item runs short, Vlaar’s team can usually switch to a similar product. “But the big question is, of course, if there’s more pressure on the stability of the delivery of those products, what will happen then?” he said.

The medical profession, Vlaar argued, must take resilience far more seriously. “It is true for all types of products, whether it’s drugs, disposables, or devices,” he said. “We need backup systems in place where people can [use] an alternative way so the system continues.”

Building in a Backup

The EU’s new strategy grew out of exactly that kind of single point of failure. In April 2022, drug manufacturer Boehringer Ingelheim announced that its production capacity cannot meet global demand for thrombolytic drugs. Once the EU realized that this was the single API manufacturing site supplying the entire world, it provided funding and support to the company to build a second site in Austria.

What began as a reactive fix has since become a bloc-wide approach to building in resilience and dealing more systematically with shortages that affect European citizens, said Dias, who chairs the EMA’s Medicine Shortages and Medical Device Shortages Working Party. The agency, she said, is now tasked with carrying out vulnerability assessments on 300 critical active substances, corresponding to 19,000 medicines, to identify where the supply is most exposed.

The Critical Medicines Act adds teeth. It incentivizes manufacturing to move into the EU where supply depends on a third country, easing access to funding and fast-tracking the administrative, regulatory, and scientific support needed to set up new EU-based production of critical medicines. “We need to see the situations where we absolutely need to make sure we have production in the European Union,” said Dias.

The vulnerability assessments will be complicated because the drug supply chain is so global and fragmented. Where 20 years ago a single factory made a drug from start to finish, today several sites are involved.

“One factory might use a third factory’s ampules and a fourth factory’s labels and a fifth factory’s diluent,” said a UK emergency physician who has been involved in resilience work but requested anonymity. “And that’s where the failure points start creeping in.” If any of those component factories — producing raw materials, APIs, or packaging — is hit by hacking, geopolitical instability, climate-related flooding, or war, the entire chain can be disrupted.

The Price of Resilience

Moving manufacturing into the EU, however, is likely to push up prices. “The system at the moment is optimized to the cheapest price,” the physician said. “If you get one part of the drug made in China and another in India, and you bottle them in Holland to then use in the UK, it’s because that’s cheaper than making it entirely in the UK.” Building in resilience, in other words, costs more, which makes resilience and efficiency effectively opposites. “So any element of national resilience has to come with cost, and so it becomes a choice,” he explained.

Even a costlier backup may be the cheaper option compared with producing medicines in Europe outright: developing, testing, producing, and marketing generics in regions such as India and China can run to as little as 40% of the equivalent European cost. “Producing medicines in the EU can be more expensive than overseas, chiefly due to labor costs — notably, salaries — and environmental regulations, both of which are fortunately nonnegotiable,” said Jaume Vidal, MA, senior policy consultant at Health Action International, a nongovernmental organization focused on access to medicines.

Unless governments use the regulatory and legal tools at their disposal to hold prices down, Vidal warned, higher costs will do more than strain budgets in the short term — they will shape policy for years. “The big risk is that finite resources will mean governments having to make more drastic decisions around reimbursement of certain medicines, and ultimately how many patients have access to a given treatment in, for example, a 12-month period,” he said. If certain medicines stop being reimbursed, health outcomes could suffer — patients’ adherence to treatments for chronic and rare diseases, for instance, may fall.

For all that, the EMA insists the new strategy is not an attempt to bring pharmaceutical manufacturing home wholesale. “In no way are we going to restore the production of all these medicines to the European Union,” said Dias. “Supply chains will continue to be global. It’s impossible to think that we’re going to get all critical medicines to be manufactured in the European Union. That is not going to happen.”

Vlaar, Dias, and Vidal reported no relevant financial relationships.

Tatum Anderson is a global health journalist with almost 30 years of experience. Based in London, England, she specializes in technology, public health, infectious and noncommunicable diseases, drug and vaccine development, medical research, and policy. As well as Medscape, her bylines have also appeared in The Economist, BBC News, SciDev.net, Guardian Weekly, The BMJ, Nature, the Bulletin of the World Health Organization, The Lancet, and a range of medical conference newspapers. She is also an editor, proofreader, and writer.