The European Parliament has endorsed its position on the Critical Medicines Act, setting the stage to finalize the law to assure security of supply for essential medicines in the EU.

By Patricia Van Arnum, Editorial Director, DCAT, pvanarnum@dcat.org

Step forward for the Critical Medicines Act
Passage of the Critical Medicines Act, legislation in the European Union (EU), which seeks to improve the availability, security, and supply-chain resilience for essential medicines in the EU, took a step forward with the European Parliament agreeing to its position on the proposed legislation as part of a multi-step process to enact the law.

The Critical Medicines Act aims to mitigate drug shortages and assure supply of essential medicines in the EU by diversifying the supply chain to reduce dependence -on a limited number of suppliers, providing incentives for collaborative procurement initiatives to help EU member states purchase medicines more effectively and reduce costs, and boosting EU pharmaceutical manufacturing to ensure that critical medicines are produced within the EU by reducing reliance on third countries (i.e., non-EU countries).

“The adoption of the Critical Medicines Act will strengthen EU coordination on national stockpiles and contingency reserves, boost the competitiveness of Europe’s pharmaceutical industry, and help prevent medicine shortages by ensuring patients can access the medicines they need,” said Tomislav Sokol, a Member of the European Parliament (MEP) and a member of the European Parliament’s Committee on Public Health, in a January 20, 2026, statement. “The pharmaceutical sector is strategically vital for the European Union. In today’s geopolitical context, Europe must boost its competitiveness and ensure patient safety by reinforcing its pharmaceutical industry and increasing production within the Union. This is how we reduce strategic dependencies and secure the supply of both critical medicines and medicines of common interest,” Sokol said.

Sokol said that the European Parliament’s position on the Critical Medicines Act achieves two main goals: strengthening the EU to reduce reliance on imports while ensuring equal access to medicines across EU member states, with several specific measures agreed to in its proposal to achieve that goal.

In its position, the European Parliament supports the creation of industrial “strategic projects’” in the EU to create, modernize, and improve manufacturing capacity to be supported by national governments and the EU by prioritizing financial support for strategic projects in the EU’s current budget and the EU’s next multi-annual financial framework. Under the proposal, companies benefiting from public financial support must meet clear obligations, including prioritizing supply to the EU market.

The European Parliament’s proposal also calls for procurement policy that supports EU production. Under its proposal, contracting authorities in the EU would need to apply procurement requirements that favor producers manufacturing a significant proportion of these critical medicines in the EU. The proposal also highlights the benefits of voluntary cross-border procurement to improve supply, notably for rare disease medicines, antimicrobials, and other innovative, high-cost, or specialized treatments. In addition, the European Parliament wants to lower the number of countries that may engage in joint procurement procedures to at least five (compared to nine in the European Commission’s initial proposal).

To better anticipate and manage shortages, the European Parliament is calling for the creation of an EU coordination mechanism for national stockpiles and contingency stocks of critical medicines. This would include the European Commission having the power to decide on, as a last resort, the redistribution of medicines from one national stockpile to one or more other countries, in instances where a shortage or a supply disruption has been identified.

As part of the legislative process to enact the Critical Medicines Act, the Council of the European Union agreed to its position on the proposed law last month (December 2025). With the European Parliament now agreeing to its position, the next step in the process is to conduct trilogues, which are informal tripartite meetings on legislative proposals between representatives of the European Parliament, the Council, and the European Commission, to get agreed-to final text for final approval.

Industry feedback
Industry feedback from the European Federation of Pharmaceutical Industries and Associations (EFPIA), which represents the innovator drug industry in Europe, and Medicines for Europe, which represents the generics and biosimilars industries in Europe, over the European Parliament’s proposal was mixed.

“In order to successfully achieve its aim, the Critical Medicines Act needs to focus on real supply risks and practical solutions. A one-size-fits-all approach will not deliver resilience,” said Nathalie Moll, Director General, EFPIA, in a January 20, 2026, statement. “With Parliament and Council positions now on the table, the trilogue negotiations should ensure the Act is focused on targeted, evidence-driven measures that strengthen supply security while preserving Europe’s attractiveness for manufacturing, investment and innovation.”

EFPIA says that the European Parliament’s position includes “welcome[d] steps” toward greater alignment of contingency stock requirements across EU member states, but that a “more coherent, risk-based approach can help reduce fragmentation and increase predictability for supply chain operators, as long as obligations are focused on medicines where shortages are demonstrably likely.”

In addition, EFPIA says it “remains concerned that elements of the adopted text risk diluting the CMA’s [Critical Medicines Act] original intent. In particular, the extremely broad framing of ‘medicinal products of common interest’, the scope and thresholds for joint and collaborative procurement, and the introduction of local-content considerations without sufficient impact assessment raise questions about proportionality and effectiveness.”

The European Parliament’s proposal calls for preferred treatment in public tenders to companies that make at least half of their active pharmaceutical ingredients or finished products in the EU, something that Sokol said is required to counter competitive forces in pharmaceutical manufacturing outside the EU, including from the US and other non-EU countries. EFPIA points out that predicating procurement based on manufacturing location may not achieved its desired goal. “Measures that favor procurement based on manufacturing location risk weakening global supply diversification, reducing flexibility in supply chains, and undermining Europe’s position as an export-oriented base for innovative medicines,” it said in its statement.

Medicines for Europe was largely supportive of the European Parliament’s position on the Critical Medicines Act, but also identified further opportunity to address other regulatory issues impacting the supply of essential medicines in the EU.

“This plenary vote is further confirmation that the European Parliament recognizes the need for policies that strengthen critical medicines supplies and reduce shortages,” said  Adrian van den Hoven, Director General, of Medicines for Europe, in a January 20, 2026 statement. “We applaud the progressive position to advance Europe’s health security with this important vote. We are ready to work with the co-legislators to deliver a meaningful act that will enable the offpatent medicines sector to be competitive, especially in today’s unpredictable geopolitical landscape. Moreover, the CMA’s [Critical Medicines Act] objectives should not be undermined by outside factors such as the Urban Wastewater Treatment Directive that must be urgently paused.”

Medicines for Europe supports the Critical Medicines Act in addressing the economic root causes of medicine shortages and points to three key areas in which it supports:

• Boosting mandatory security of medicine supply measures in both medicine public procurement and national pricing and reimbursement
• Introducing financial support via a Critical Medicines Security Fund and a new fit- for-purpose state aid guidance to support upgrades or reshoring for innovative production processes.
• Increasing access to essential medicines in EU member states to patients instead of being disproportionately assigned to national stockpiles. 

“Despite these encouraging steps forward, significant outside risks that threaten access to medicines remain,” said Medicines for Europe in its January 20, 2026, statement. “Obligations introduced outside the health framework, such as the Extended Producer Responsibility mechanisms under the Urban Wastewater Treatment Directive raise concerns around a lack of proper data quality, methodology and proportionality. These measures undermine supply-chain planning, disproportionately impacting low-margin generic medicines, and ultimately weaken the availability and secure supply of essential and critical medicines. This law must be amended.”

The revised Urban Wastewater Treatment Directive, which went into effect on January 1, 2025, introduced stricter rules on micropollutants in urban wastewater, with a specific focus on the pollutants generated by the pharmaceutical and cosmetics industries. It introduced an “extended producer responsibility” (EPR) scheme under which those industries are required to pay at least 80% of the costs associated with quaternary treatment of wastewater to remove micropollutants. This includes both capital investments for building or expanding urban wastewater treatment facilities and operational expenses for the treatment facilities. The EPR scheme would become effective in 2028 with phased implementation through to 2045.

Medicines for Europe asserts that pharmaceutical residues in wastewater mainly result from patient consumption rather than from emissions in manufacturing sites that are already strictly monitored and minimized by the industry. For the pharmaceutical industry, EPR fees will be based on the volume of medicines sold or dispensed in each EU member state.

“This design hits  the generic medicines industry hardest, the very sector which supplies the majority of essential medicines prescribed by doctors to patients with serious illnesses,” said Medicines for Europe in a December 12, 2025, statement. “While the Directive sets out how EPR costs will be calculated, it does not set a maximum total EPR contribution. This creates huge uncertainty for companies that need to know if their production lines will be economically viable after 2028. Based on our modelling of the real impact, the Directive will cause a tsunami of medicines shortages.”