EU Critical Medicines Act Seeks to Enhance Supply and Access Requirements

The European Commission has proposed a new Critical Medicines Act aimed at reinforcing the security of supply and ensuring the availability of critical medicines and medicines of common interest across the EU. The Act introduces new obligations for pharmaceutical companies such as enhanced supply chain transparency, mandatory stockpiling, and regular reporting obligations. At the same time, it creates opportunities for investment and funding to expand EU-based manufacturing, diversify supply chains, and foster innovation. By shifting procurement practices to include award criteria beyond price considerations by prioritizing quality, supply security, and EU production, the Act aims to address vulnerabilities in the current supply system and reduce reliance on third countries. However, to avoid becoming another layer of red tape for industry, a final Critical Medicines Act must carefully balance new regulatory requirements with the need to maintain competitiveness and support a resilient, innovative pharmaceutical sector.

In March 2025, the European Commission (Commission) unveiled a proposal for a Critical Medicines Act (proposed Act) aimed at strengthening the security of supply and availability of critical medicinal products (included in the Union List of Critical Medicinal Products) and other medicinal products of common interest (a newly defined category of products for which “the functioning of the market does not sufficiently ensure the availability and accessibility to patients” in at least three Member States). According to the Commission’s Explanatory Memorandum, this can include orphan medicinal products and novel antimicrobials. To meet the supply security and availability objectives, the proposed Act introduces reporting, stockpiling, and transparency requirements for the pharmaceutical industry. It also introduces new procurement mechanisms and incentives to promote the use of medicines produced within the EU and to encourage the development of reliable supply chains. Finally, it creates opportunities for investment and funding for strategic projects to create or increase manufacturing capacity. The proposed Act seeks to ensure reliable access even during global disruptions, where market mechanisms alone may be insufficient.

The proposed Act’s key objectives include:

• Investment facilitation: in manufacturing capacities for critical medicines, their active pharmaceutical ingredients (APIs), and other key inputs in the EU;
• Lower supply disruption risks: strengthen availability by incentivizing supply chain diversification and public procurement procedures for critical medicines and other medicinal products of common interest;
• Leverage aggregated demand: through collaborative procurement procedures; and
• Diversification of supply chains: e.g., by facilitating the conclusion of strategic partnerships.

Political Context and Rationale

The proposed Act responds to lessons learned from the COVID-19 pandemic and resulting medicine shortages, which exposed the EU’s reliance on few suppliers – particularly located in India and China – for certain critical medicines and APIs.

It aligns with the political guidelines (2024-2029) of Commission President von der Leyen and complements the ongoing General Pharma Legislation (GPL) review and the enhanced role of the European Medicines Agency (EMA) in managing shortages under Regulation (EU) 2022/123. It also builds upon and incorporates recommendations of the Critical Medicines Alliance, established in 2024, such as vulnerability assessments, contingency stocks, and procurement criteria beyond price. The proposed Act is one of the actions set out in the Commission’s 2025 competitiveness compass, a roadmap for restoring EU competitiveness and boosting economic growth.

Key Elements of the Proposed Act

The proposed Act contains the following key elements:

1. Scope: The proposed Act covers critical medicines and other medicines of common interest. It builds on the Union List of Critical Medicines, which was originally envisaged in the Commission’s proposal for the and was published by the EMA in 2024. The proposed Act covers “critical medicinal products” on the Union List, as well as a newly defined category of “medicinal products of common interest”. The latter category are products for which in three or more Member States the functioning of the market does not sufficiently ensure the availability and accessibility to patients in the quantities and presentations necessary to cover the needs of patients in those Member States. This can include orphan medicinal products or novel antimicrobials.
2. Public Procurement Award Criteria: A review of the EU’s public procurement framework is currently underway, with a legislative proposal expected in 2026. The proposed Act seeks to establish new procurement practices for critical medicines and other medicines of common interest at the EU level.

The proposed Act introduces new mechanisms that aim to move away from awarding contracts based solely on the lowest price. Instead, the proposed Act emphasizes the use of the Most Economically Advantageous Tender (MEAT) criteria to ensure that the evaluation includes factors such as quality, supply security, incentives for EU-based production, and timely delivery, in addition to price. The intention is to ensure that procurement decisions better reflect healthcare needs and address vulnerabilities in the supply chain. By considering a broader range of award criteria, the proposed Act aims to promote a more resilient and reliable supply of medicines.

3. Collaborative Procurement: The proposed Act supplements existing collaborative procurement mechanisms to enable the Member States to aggregate demand and jointly procure critical medicinal products and medicinal products of common interest. The proposed Act envisages that the Commission will take a varying degree of involvement in each of the collaborative procurement procedures. The three proposed procedures are:

• Cross-border procurement for medicinal products of common interest. The Commission may be asked by three or more Member States to facilitate this procurement process.
• Procurement on behalf of, or in the name of, Member States for critical medicinal products with vulnerabilities or for those for which a common procurement initiative has been recommended by the MSSG (Executive Steering Group on Shortages and Safety of Medicinal Products), and for medicinal products of common interest with a joint clinical assessment report or which have undergone a clinical assessment carried out under voluntary cooperation among Member States. The Commission may be asked by nine or more Member States to carry out these procurement processes.
• Joint procurement by the Commission and at least nine Member States is available for the same categories of medicinal products as the category of procurement on behalf of, or in the name of, Member States, and can be undertaken either at the request of nine or more Member States, or at the Commission’s initiative.

4. Financing for Strategic Projects: The proposed Act introduces a framework to support projects that expand or modernize EU manufacturing capacity for critical medicines or active substances. Member States shall identify and expedite such projects, which will benefit from coordinated financial and regulatory support, including access to EU funding such as the EU4Health Programme, Digital Europe Programme, Horizon Europe, and the Strategic Technologies for Europe Platform (STEP), subject to applicable eligibility criteria. These projects may also receive priority in administrative and permit-granting processes, including fast-tracked environmental assessments and regulatory support.

The proposed Act further emphasizes the importance of identifying supply chain vulnerabilities of critical medicines. Critical medicines are considered to have supply chain vulnerabilities when risks and weaknesses are identified at an aggregated level that could compromise their continued availability. For example, antiviral therapies, antibiotics, insulin, and radiopharmaceuticals may fall under this category. Member States may prioritize financial support for strategic projects that address vulnerabilities in the supply chains of critical medicines, as identified through a vulnerability evaluation.

5. Strategic Partnerships and International Collaboration: The proposed Act stresses the need for strategic partnerships with third countries and international organizations to diversify supply sources. The Commission will coordinate and prioritize these partnerships to strengthen supply chain resilience.

Opportunities and Challenges

The proposed Act represents a shift in the EU’s approach to pharmaceutical supply security, prioritizing resilience, diversification, and sustainability over short-term cost savings. By broadening procurement criteria and supporting strategic projects, the proposed Act has the opportunity to create incentives to build a more robust and adaptable supply chain in the EU. Nevertheless, key challenges include:

• The scope of the proposed Act is not clear, because the concept of “medicinal products of common interest” has not been defined sufficiently. Stakeholders are concerned that the proposed criteria are too vague to prevent widespread classification of newly authorized products as common interest products. An excessively wide scope could create uncertainty and impose additional requirements on the pharmaceutical industry, such as the obligation to provide information upon request by the Commission and national authorities (e.g., information for a vulnerability analysis such as manufacturing capacity). Medicinal products of common interest can also be made subject to joint procurement if a joint clinical assessment has been conducted under the HTA Regulation (EU) 2021/2282 or a clinical assessment has been carried out under the voluntary cooperation among Member States under the proposed Act.
• While the introduction of new public procurement criteria moving away from lowest-price tenders has been regarded as a positive development, experience shows that to have a meaningful impact, non-price factors need to be given substantial weight in the award criteria. It remains to be seen whether MEAT and other non-lowest-price criteria will prevail and effectively enhance supply resilience.
• Obligations for manufacturers and distributors to maintain contingency stocks at the national level could create significant logistical and financial pressures on companies. While the proposed Act calls for these requirements to be proportionate and transparent, stockpiling remains managed by the Member States. Establishing a harmonized EU-wide stockpiling rule could meet similar objectives and reduce industry burden by addressing fragmentation and duplication. Relevant experience can be gained under the EU Stockpiling Strategy and a Medical Countermeasures Strategy published by the Commission on July 9, 2025 (here). Both strategies are designed to improve access to essential goods for EU citizens, societies, businesses, and economies, and, among other measures, to establish an EU Stockpiling Network with Member States for sharing best practices, coordinating stocks, developing joint recommendations, identifying stock gaps and duplications through enhanced information sharing, and fostering cooperation among Member States and with the EU.
• Enhanced reporting and transparency requirements may increase the administrative workload for companies and wholesalers, potentially undermining efforts to streamline processes and reduce bureaucracy.
• The proposed Act encourages Member States to prioritize suppliers with significant EU-based manufacturing when procuring critical medicines with supply chain vulnerabilities or high dependency on non-EU sources. However, a more balanced approach – considering global supply options alongside EU production – could potentially better serve the goals of resilience and security. Stakeholders have highlighted the need for a nuanced discussion on this point.

Outlook

The Danish presidency of the Council of the European Union has described the Critical Medicines Act as a priority.

Key topics in the legislative process will be to agree on the definition and criteria for medicines of common interest, properly designing data requirements, and incentives for the Member States to move beyond lowest-price awards criteria.

Whether the presidency will be able to advance the proposed Act remains to be seen: the legislative process is still in its early stages. The European Parliament and the Council must now adopt their respective positions before trilogues with the Commission can begin.

See previous Sidley alerts on the issue of critical medicines shortages here and here.

See previous Sidley alert on the HTA Regulation here.

See previous Sidley alerts on the General Pharmaceutical Legislation reform here, here, here, and here.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.