Medicines as a security question: Europe's dependence on China
China supplies the majority of Europe's active pharmaceutical ingredients. Together with Martin Catarata and David Francas, I have conducted a stress test of 56 essential ingredients and traced the dependency down to the precursor level. Our conclusion: this is a security problem, not merely a health-policy one.
Read the full study (in German) here, our article in Internationale Politik here (in German) and the EUISS commentary here.
In spring 2025, eleven EU health ministers warned in an open letter that Europe's dependence on Chinese medicines was the Achilles' heel of Europe's defence strategy. Without sufficient antibiotics, they cautioned, even routine surgery becomes risky and healthcare systems come under severe strain. The letter attracted brief attention and was then largely forgotten. The problem did not go away.
The stress test
At first glance, Europe's position looks unproblematic. A significant share of downstream manufacturing — formulation and packaging — still takes place in Europe. A closer look at the value chain tells a different story.
We examined 56 active pharmaceutical ingredients, all classified as essential: painkillers, antibiotics, diabetes medications and biosimilars. Generics, which account for roughly 80 % of the EU's medicine supply, are the most exposed segment. Fewer than half of the substances we examined (26) carry a low capacity risk. For more than a third (20), the share of Chinese suppliers and production sites is so large that a disruption would have severe consequences. Antibiotics are the worst case.
The picture worsens the further upstream one looks. Take the antidiabetic metformin and the antibiotics amoxicillin and cefpodoxime. At the ingredient stage, their capacity risk stands at 33 %, 20 % and 13 % respectively. Once the key precursors are counted, it rises to 83 %, 71 % and 94 %. Europe can import finished ingredients from Indian manufacturers and still be dependent on China.
None of this was done to Europe
China's strength in pharmaceuticals is no accident, but neither was it originally aimed at Europe. Beijing's starting point was concern about its own supply security: as early as the 12th Five-Year Plan in 2011, the pharmaceutical industry was designated a strategic key sector.
The industrial policy that followed rests on two pillars. Generous state support: a conservative review of listed firms shows that Chinese pharmaceutical companies receive on average more than €3 million a year for production capacity and R&D, with the real figure likely much higher. The 'Special Program for Significant New Drug Development' alone mobilised some €2.8 billion between 2008 and 2020, and R&D tax rebates run up to 175 %. And a largely shielded domestic market: in the first nine national procurement rounds, 96 % of successful bids went to domestic generic manufacturers, and until recently foreign firms had to enter joint ventures to produce locally.
The other half of the explanation is European. Decades of cost containment squeezed margins on generics until production simply left. In 2002, 21 manufacturers still produced penicillin in Germany; by 2024, six remained. The most recent example passed almost without political comment: the end of production of metamizole in Frankfurt-Höchst, the second most frequently prescribed painkiller in Germany after ibuprofen.
A weapon Beijing has not yet used
China has not so far used its dominance in generic production as a geopolitical instrument. The reputational cost of restricting medicine exports would be high. But the warning signs are there. In 2025, Illumina became the first biotech firm placed on China's unreliable entity list, and there were reports in the autumn of pharmaceutical production machinery no longer being delivered to India. Back in 2020, Chinese state media reminded the United States in blunt terms how much of its antibiotic and antipyretic supply originates in China. Beijing is well aware of the leverage these supply chains offer.
Meanwhile, China's ambitions extend well beyond generics. Since 2013, pharmaceutical patent filings have risen by 440 % in China while falling by 10 % in Germany. The volume of Chinese drug licensing deals grew from around USD 52 billion in 2024 to USD 157 billion in 2025, and five of the ten largest deals that year already involved Chinese firms. Europe retains structural strengths in biopharmaceuticals, but the gap is closing fast.
What Europe should do
Europe has to act in three areas: preserve the production that remains, diversify supply, and strengthen its own innovation base.
The proposed Critical Medicines Act is a step in the right direction because it begins to treat pharmaceutical resilience as a strategic objective. But investment grants for new plants are not enough on their own. Since Europe cannot rebuild generic capacity quickly, the first priority must be to stop existing production from disappearing: public procurement and health legislation that reward resilience, long-term market-based incentives for critical capacity, and environmental, pharmaceutical and industrial rules aligned so that they do not unintentionally drive manufacturing out of Europe.
Diversification cannot rely on reshoring alone. No Member State is large enough on its own. Only coordinated action at Union level achieves the economies of scale that matter — including investment partnerships with third countries through Global Gateway to secure alternative sources of ingredients and precursors.
On innovation, the answer is not to end research cooperation with China but to regulate it. Europe should introduce EU-wide rules for sensitive biotech cooperation and health data transfers rather than leaving 27 different approaches in place.
The transatlantic dimension
The United States shares this problem and in some segments experiences it more acutely: only around 15 % of patented active ingredients by volume are made in the US, and China supplied roughly 70 % of American antibiotic ingredient imports by volume in 2024. Europe, for its part, holds an asset Washington lacks — the last large-scale, fully integrated penicillin production site in the Western world is in Austria. Europe can therefore approach Washington as a co-supplier of security rather than as a supplicant.
That creates a genuine case for cooperation. But it comes with a condition. In April 2026, Washington announced tariffs of up to 100 % on imports of patented medicines and their ingredients, with European products capped at 15 %; generics are exempt for now, subject to a review due within a year. Tariff relief conditioned on relocating production to the United States, pricing commitments negotiated under tariff pressure and procurement rules with extraterritorial reach would not produce resilience. They would exchange dependence on Beijing for dependence on Washington. The test for any proposal is simple: could Europe still supply its patients if the partnership broke down?
I develop this argument in a forthcoming policy brief for the Council on Foreign Relations, Shared Exposure: The Case for Cooperation, and Its Limits.
Read the full study (in German) here, our article in Internationale Politik here and the EUISS commentary here.