Lawmakers from member states of the European Union agreed to measures last week to stop drug shortages and fix chronic Asian dependencies for critical medicines, this time spurred by worries over the antibiotics supply chain.

The move is part of last year’s Critical Medicines Act, but the real takeaway here is that Brussels and Washington are jointly concerned about supply constraints and their overdependence on imports. We could be witnessing the early stages of what might become a U.S.-European pharmaceutical ecosystem for critical drugs, which would include support for the domestic production of key precursor ingredients and, of course, the active pharmaceutical ingredient (API) that makes the drug work.

A provisional accord – agreed to on May 12 – was struck between EU countries and their parliament representatives. It will require EU members to diversify supply sources of some 270 active substances on their Union List of Critical Medicines.

The deal will allow national governments to apply an “EU preference” to government procurement contracts for medication, protecting the market and – perhaps – sparking investment in low-margin API usually sourced from India and China.

Worth noting, however, Europe and India recently touted the signing of a free trade agreement, meaning it is still unclear if the EU will include India as one of their “international partnership” countries. The U.S., of course, fits perfectly in this camp as both have nearly identical needs and desires whereas India is a stable low-cost producer of low-margin generics and APIs.

Pharmaceutical companies involved in “strategic projects” will get access to national and EU-wide funding with faster and more efficient permitting procedures to get new capacity on line quicker.

The deal only needs one more final endorsement by the European Council. No date has been set at this time.

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