EU plans stricter drugs supply rules to avoid reliance on 'autocracies'

BRDO, Slovenia, Oct 12 (Reuters) - Drugmakers may face stricter rules to ensure the supply of medicines in the European Union, EU officials said on Tuesday, as the bloc tries to reduce its imports of pharmaceutical products from China and other foreign "autocracies".

At the onset of the COVID-19 pandemic last year, the 27-country bloc encountered protracted problems in obtaining a wide range of medicines and their ingredients from India and China, as supplies tightened amid lockdowns and export restrictions.

"We need to update our legislation to address shortages in areas like harmonised reporting, stronger obligation of supply and greater transparency in the supply chain," EU health commissioner Stella Kyriakides told a meeting of EU health ministers in Slovenia.

The planned rules change is also aimed at reducing the EU's reliance on medicine ingredients produced abroad, as the Commission estimates that two-thirds of the global supply is concentrated in India and China.

"The crisis has shown that we are too dependent on China and on other third countries when it comes to pharmaceutical products," Germany's health minister Jens Spahn told reporters ahead of the meeting.

With the COVID crisis pushing the bloc to increase its pharmaceutical independence, awareness of its need for goods of all kinds from other continents has been further heightened by global supply chain chaos wrought by reviving economic activity.

"Just imagine a world when vaccines only had been developed in China or Russia, and Western democracies and the European Union would be dependent on these autocracies for a vaccine. It would not be a good world," Spahn said.

The urgency for change however must be combined with a careful assessment of how the industry works, EU officials said. The Commission plans to make legislative proposals only in December 2022, according to its draft working programme seen by Reuters and due for publication in the coming days.

An EU official said that drugmakers could be offered incentives to innovate, on condition that they accept stricter supply obligations across the EU.

Drugmakers are already required to ensure minimum supplies of medicines, but the obligations vary among EU states and are seen as not strict enough.

One person familiar with the discussions said that under the new rules, companies may be required to have crisis plans and provide early warnings when they expect potential risks of shortages. In France they already face fines if they don't do so.

Reporting by Francesco Guarascio @fraguarascio, Editing by William Maclean

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Thomson Reuters

Francesco leads a team of reporters in Vietnam that covers top financial and political news in the fast-growing southeast Asian country with a focus on supply chains and manufacturing investments in several sectors, including electronics, semiconductors, automotive and renewables. Before Hanoi, Francesco worked in Brussels on EU affairs. He was also part of Reuters core global team that covered the COVID-19 pandemic and participated in investigations into money laundering and corruption in Europe. He is an eager traveler, always keen to put on a backpack to explore new places.