EU announces plans to cut reliance on Asia for antibiotics, other critical drugs

By Julia Payne and Maggie Fick

BRUSSELS/LONDON (Reuters) -The European Commission aims to reduce the EU's heavy reliance on countries such as China and India for antibiotics and other widely-used drugs under plans unveiled on Tuesday, though officials said it would be a tough task given cost pressures.

The Critical Medicines Act seeks to tackle vulnerabilities in the manufacturing supply chain for some 270 medicines that the Commission identifies as critical to health and health security in the European Union, according to the latest list it published in December.

The bill urges EU governments to end the longstanding practice of awarding tenders for generic medicines solely on the basis of price. European generic drugmakers say the practice has fuelled a race to the bottom in which European companies lose out to suppliers from China and India.

As a result, the active pharmaceutical ingredient in more than 80% of antibiotics used in Europe comes from Asia, mainly China, according to a letter published over the weekend by the health ministers of 11 EU countries.

However, health ministries in the 27 EU member states will have the final say on tenders, not the Commission, and they must contend with budget pressures when procuring medicines, a source from a European health ministry told Reuters on condition of anonymity in order to speak frankly.

"If I can choose to save money for example on insulin, I may do so, because every euro I save allows me to provide care to oncology patients, for neurodegenerative diseases, and so on," the official said.

In the bill, the Commission calls for contracting authorities in EU member states - such as health ministries - to use procurement requirements "other than price" when tendering for medicines, "unless justified by market analysis and considerations related to the financing of health services".

This raises doubts as to whether the bill will spark fundamental changes to Europe's manufacturing supply chain, the official said.

The Commission, the EU's executive body, began trying to overhaul its laws governing the pharma industry two years ago in order to ensure all Europeans have access to both innovative new treatments and generic drugs, but its proposed changes have not yet been passed into law.

(Reporting by Julia Payne in Brussels and Maggie Fick in London, additional reporting by Tiffany VermeylenEditing by Gareth Jones)