IndustriAll Europe acknowledges the European Commission’s efforts to tackle the urgent issue of medicine shortages with the proposed Critical Medicines Act. However, we believe that this legislation falls short of addressing the critical needs of workers in the pharmaceutical sector.
The European Union has only recently realised the consequences of its long-standing trend of offshoring key components of the pharmaceutical supply chain and the lack of a coherent industrial policy in Europe. It took a pandemic, a war, and major trade disruptions to highlight the problems with this approach—problems we are now suffering from. Thousands of jobs have been lost in both the upstream and downstream parts of the supply chain, and much of the industry’s research and innovation has shifted to the US and China. As a result, Europe finds itself in a vulnerable position compared to other global blocs.
IndustriAll Europe welcomes the Critical Medicines Act’s potential to be a game-changer for industrial policies in the pharmaceutical sector: it aims at supporting investment in manufacturing capacity, incentivising supply chain diversification, and enhancing collaborative procurement procedures between Member States on a voluntary basis to address shortages. Moreover, it lays the groundwork for supporting strategic projects with financial backing.
However, while the proposal recognises that the pharmaceutical sector directly employs around 800,000 people in the EU, it fails to adequately address the needs of these workers and their industry and its value creation power. The strengthening, friendshoring and, in some cases, reshoring of production lines and supply chains, will require new skills, advanced chemical processes, and innovative business models. Yet, there is a glaring lack of attention to the social dimension of pharmaceutical manufacturing, particularly regarding workers’ rights and social protections. Furthermore, the main challenge remains convincing companies to bring critical active ingredients back to the continent. Digitalisation, streamlining permitting processes, and public support are key to increasing the competitiveness of our industries.
IndustriAll Europe does welcome the legislation’s emphasis on incentivising sustainable and socially impactful public procurement procedures. However, the language remains weak, relying on the ongoing reform of Public Procurement rules. We believe that this legislation must align with the social objectives mentioned in the Clean Industrial Deal. Public funding should be contingent on social conditionalities that benefit workers—ensuring access to collective bargaining, training, and reskilling opportunities.
We also contend that the Critical Medicines Act proposed by the Commission fails to address five crucial areas:
- Training and Skills Development: As the pharmaceutical industry evolves, continuous training and upskilling of workers must be prioritised to keep pace with new technologies and processes.
- Collective Bargaining and social conditionalities: The Act should tie collective bargaining to tenders for fair working conditions, and link public support for medicine production to social and environmental criteria.
- Good Quality Jobs: The Act should include provisions that protect and enhance the social rights and good working conditions in those strategic projects.
- Strategic Partnerships and social criteria: Partnerships to diversify the supply chain should prioritise countries with established environmental and labour standards.
- Industrial ecosystem approach: The pharmaceutical industry is part of a broader ecosystem that includes various value creation stages. To maintain it, we need competitive energy prices, a clear industrial policy, genuine social partnerships, and a broad investment plan.