The European Union has agreed on a Critical Medicines Act to stockpile pharmaceuticals and invest in domestic production, aiming to prevent pandemic-era shortages when 31 medicines including insulin and asthma treatments were in short supply. The plan requires public authorities to prioritize supply security alongside price when purchasing critical medicines, with governments empowered to subsidize new manufacturing facilities. China provides 40% and India 20% of the EU's active pharmaceutical ingredients, creating vulnerabilities.

Legislators established a "European preference" clause incentivizing manufacturers to produce within the bloc, where only 25% of vital drug ingredients are currently produced. Any five or more EU members can now request collective procurement through the European Commission, though stockpile sharing remains voluntary. The approach mirrors the successful vaccine purchasing strategy during the pandemic, though health systems already struggling with aging populations may face funding challenges for potentially more expensive local production.

The agreement addresses persistent medicine shortages but comes with trade-offs. Industry representatives warn state intervention could damage competitiveness and innovation in the pharmaceutical sector. Public hospitals must now balance supply security against cost considerations in purchasing decisions, potentially increasing healthcare spending across the EU despite the long-term benefits of reduced dependency on foreign suppliers.