Over the last 15 years, China and India have become highly competitive manufacturers in the global pharmaceutical chain. But the Covid-19 pandemic has reshuffled all the schemes. It has also exacerbated the risks of shortages of drugs caused by weaknesses in the supply chain for sourcing generic treatments and active pharmaceutical ingredients (API).

"The lower cost base, more global resilience, specialisation, economies of scale and the comparative advantage the EU has in producing other higher value-added goods and services, are all reasons why some products are manufactured elsewhere", explains Elizabeth Kuiper - EFPIA Executive Director of Public Affairs.

However, according to Dr. Koen Berden, EFPIA Executive Director International Trade, " there is already strong resilience in the European pharmaceutical industry with 77 % of EU imports for all pharmaceutical products sourced from Europe itself. Only 2.4 % and 1.3 % of EU imports of pharmaceutical products come from China and India, respectively. Moreover, Europe is the biggest exporter of medicines in the world with a strong history of research and development".

What measures are required to restore European sovereignty in health matters and manufacture pharmaceutical products locally ? After years of upheavals in the sourcing of medicinal products for European populations, time has come to think about relocations in this high-value industry.

The joint statement by President Macron and Chancellor Merkel of 18 May outlining the need to "increase European capacities on research and development for vaccines and treatments" has been an important signal for the industry.

Even if "in a global supply chain, it is not reasonable to expect that all production is localised in Europe, it remains possible to build on the European manufacturing footprint of over 400 sites and 190 000 direct jobs by encouraging investment in technologic al leadership", estimates Adrian van den Hoven, Medicines for Europe Director General.

The European Commission has launched a five-year plan aiming at guarantying supplies of medicines and reducing Europe's dependence on imports of API from third countries to produce antibiotics, cancer drugs, generic...

The European Federation of Pharmaceutical Industry and Associations (EFPIA), estimates that "it is critical that Europe uses its strengths in international trade and innovation to help the region recover and become more resilient: via open trade and a strong focus on R&D and innovation".

"If Europe wishes to strengthen manufacturing of medicines and affirm its leadership, it will need to shift the focus from achieving the lowest-price possible for off-patent medicines to ensure supply security and diversity in a functioning competitive internal market", underlines Adrian van den Hoven, Medicines for Europe Director General. " Simultaneously, it will need to stimulate investment the development of manufacturing base, embrace its specialization in complex forms and improve regulator y oversight in third countries to secure a level playing field with European manufacturing".

In this scheme, CDMOs have an important part to play. "They have already played an important role so far in retaining pharmaceutical production on the continent by using their capabilities and skills to maintain and extend production capacity", reminds Jean-François Hilaire - Recipharm Executive Vice President. "They now have a further contribution to bring to the future of the European pharmaceutical industry"

Whatever the final solution is, "repatriate production will require precise identification of the legal issues involved", warns Nathalie Cazeau, Founding Partner at Cazeau & Associés. "That therefore implies, from a legal point of view, working on greater harmonisation of the status of medicinal products in Europe, on both the regulatory and the contractual fronts".