By Francesco Guarascio
BRUSSELS (Reuters) – A decision to focus its fiscal firepower on economic recovery has forced the EU to sharply scale back plans to address chronic shortages of drugs, including COVID-19 treatments, by bringing back manufacturing capacity from Asia.
As part of a budget deal to relaunch the economy that they agreed early on Tuesday after a marathon summit, European Union leaders cut planned healthcare expenditure to 2027 by 80%.
The bloc has for years faced shortages of critical drugs, including vaccines and antibiotics, and now is struggling to buy medicines needed by COVID-19 patients in intensive care units.
To address those problems, its executive commission had proposed creating from scratch a common seven-year health budget worth 9.4 billion euros ($10.9 billion)..
Shortages have worsened during the COVID-19 crisis, as supply chains were disrupted and drug exporting countries temporarily focused on their domestic markets. The EU is heavily dependent on medicines and medical ingredients from India and China.
However, pressed by the urgent need to relaunch the wider economy, the EU leaders cut the healthcare fund to 1.7 billion euros.
“We regret that our very ambitious proposal was not followed entirely,” a commission spokesman said on Wednesday, though the new health budget was deemed “a good starting point”.
The EU had planned to offer financial incentives to drugmakers to move some of their Asian plants to Europe, but may now need to revise its plans.
The bloc’s exposure to drug shortages, despite its financial might, is currently laid bare by the difficulties it faces in buying the analgesics, anaesthetics and resuscitation drugs that are needed to treat critically ill COVID-19 patients.
The commission is assessing offers after a first tender launched on June 29 on behalf of 10 EU states was not successful, a spokesman said.
Joint tenders are meant to avoid competition among member states for drugs and critical equipment.
Advance purchase deals with makers of potential COVID-19 vaccines and other drugs in development are not affected by the budget cuts as they rely on emergency funds already available.
(Reporting by Francesco Guarascio @fraguarascio; editing by John Stonestreet)
