{"id":95986,"date":"2026-07-16T14:54:35","date_gmt":"2026-07-16T14:54:35","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/95986\/"},"modified":"2026-07-16T14:54:35","modified_gmt":"2026-07-16T14:54:35","slug":"europe-optimized-its-supply-chains-for-cost-now-it-must-pay-for-resilience","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/95986\/","title":{"rendered":"Europe\u00a0optimized\u00a0its supply chains for cost. Now it must pay for resilience\u00a0\u00a0"},"content":{"rendered":"

There\u2019s\u00a0an increasing realization among business and political\u00a0leaders\u00a0how vulnerable some of Europe\u2019s critical supply chains have become. The challenge is translating this into action.\u00a0\u00a0<\/p>\n

When we talk to governments and figures in the industry, everyone gets it. No one will dispute it. The challenge is how we translate that into action. Right now,\u00a0I\u2019m\u00a0encouraged, but not relieved.\u00a0\u00a0<\/p>\n

We estimate that\u00a0roughly 70%\u00a0of the drugs used across Europe are generic and biosimilar, and they cost between 10% and 20% of the total drug bill. Without generic companies there is no healthcare in Europe.\u00a0\u00a0\u00a0<\/p>\n

Very few of those drugs, certainly the non-biologic complex drugs, are made in Europe.\u00a0Almost all\u00a0of the key starting materials are imported either from China or India. Almost none are manufactured in Europe because the payers have chased margin pricing down to the bottom.\u00a0\u00a0<\/p>\n

If 70% of the drugs are costing 20% of the money, you can see where the market is heading. While people have pursued lower costs,\u00a0they\u2019ve\u00a0forgotten the value of sustainability and security.\u00a0\u00a0<\/p>\n

COVID exposed the weakness\u2013but also showed what\u2019s possible<\/p>\n

After the COVID pandemic, the sovereignty of supply became a top priority\u2014supply chain vulnerabilities often only become\u00a0apparent\u00a0when they are tested.\u00a0<\/p>\n

Ironically, we often have more problems moving products from Italy to Austria than we do from India into Europe, because each government wants to be seen to be protecting its patents and international interests, rather than acting collectively in the interests of a European supply framework. However, during COVID, I saw national interests being put ahead of regional interests.\u00a0\u00a0\u00a0<\/p>\n

In a crisis, we found a way, so there are clearly mechanisms that can be applied. During COVID, we manufactured a product called hydroxychloroquine and, for about three weeks, it was thought to be a cure for COVID [it is no longer recommended to prevent COVID-19 by the\u00a0World Health Organization<\/a>].\u00a0\u00a0<\/p>\n

We manufactured around 50-100 million packs and ended up getting it into 35-40 markets within a very short period of time, because all the regulators waived a lot of their usual requirements.\u00a0When we want to, we can find solutions to problems.\u00a0\u00a0<\/p>\n

Hopefully now with the EU Critical Medicines Act the regulatory environment has changed once more. The state of geopolitics in the U.S., Middle East, and our relationships with Central Eastern Europe, particularly Russia, has forced Europe to reassess its role, which I think is positive.\u00a0\u00a0<\/p>\n

The challenge facing Europe\u00a0<\/p>\n

Reshoring all of Europe\u2019s supply chains is a great aspiration, but is also completely unrealistic.\u00a0\u00a0<\/p>\n

It\u2019s\u00a0a question\u00a0of\u00a0economics. People will build infrastructure and manufacture raw materials in Europe if\u00a0there\u2019s\u00a0an economic environment that rewards it. If there\u00a0isn\u2019t, why would anyone? My board\u00a0wouldn\u2019t\u00a0let me deploy that kind of capital if I\u00a0can\u2019t\u00a0show a sensible return, and I\u00a0wouldn\u2019t\u00a0be in my job for\u00a0very long.\u00a0\u00a0<\/p>\n

A lot of industries are set to face an inflationary shock over the next six months to a year. The costs of materials, fuel, and interest rates are all rising. This means the cost of business is going up.\u00a0\u00a0<\/p>\n

The reality is those costs will have to\u00a0get\u00a0passed on to customers. That means medicines across the board will\u00a0get\u00a0more expensive.\u00a0\u00a0\u00a0<\/p>\n

Europe is fantastic at legislating, but it\u00a0doesn\u2019t\u00a0always consider all the implications. We have a responsibility to work with governments to find solutions to protect and support our supply chains.\u00a0\u00a0<\/p>\n

We risk entering a world where security of supply of critical medicines\u00a0can\u2019t\u00a0be guaranteed, because the economic incentives to make long-term capital investments\u00a0aren\u2019t\u00a0there.\u00a0\u00a0<\/p>\n

Europe is getting older,\u00a0it\u2019s\u00a0getting sicker and, like it or not,\u00a0it\u2019s\u00a0getting poorer. Without a healthy society, everything else crumbles.\u00a0Penicillin is estimated to have saved more lives than any other drug. It made infections that would have been fatal 80 years ago treatable. This means that most operations can now be conducted safely, with a much lower risk of infection.\u00a0<\/p>\n

All of that we take for granted, and yet we sell the product more cheaply today than a Mars bar or a packet of chewing gum. While we understand the cost of producing medicines, we often forget their value. Hopefully,\u00a0that\u2019s\u00a0starting to change.\u00a0\u00a0<\/p>\n

The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of\u00a0Fortune.\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"There\u2019s\u00a0an increasing realization among business and political\u00a0leaders\u00a0how vulnerable some of Europe\u2019s critical supply chains have become. The challenge…\n","protected":false},"author":2,"featured_media":95987,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49922,15,2056,4619,242],"class_list":["post-95986","post","type-post","status-publish","format-standard","has-post-thumbnail","category-europe","tag-europe-ceo","tag-european","tag-londonarticles","tag-medicines","tag-supply-chains"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/95986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=95986"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/95986\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/95987"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=95986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=95986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=95986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}