For over two decades, Europe’s pharmaceutical manufacturing footprint has steadily shifted offshore towards countries like China and India, driven by the pursuit of lower costs and operational efficiencies. However, the COVID-19 pandemic, coupled with growing geopolitical instability and increasing complexity in modern therapies, has exposed the risks of this model.
The continent now finds itself reassessing the wisdom of such dependency, particularly in the production of essential medicines and active pharmaceutical ingredients. In response, a new policy framework is beginning to take shape.
Legislative proposals like the Critical Medicines Act and the broader EU Pharma Package signal a more assertive European approach, focused on reshoring strategic capabilities, strengthening supply chains, and enhancing long-term resilience. Yet political intent alone will not suffice.
Rebuilding manufacturing in and for Europe demands pragmatic solutions, not just rhetoric. The following seven trends offer a clearer view of how that transformation is beginning to unfold.
Shifting the balance: Reducing Europe’s manufacturing dependence
The past two decades of cost-driven outsourcing have left Europe with limited domestic manufacturing depth, especially in the production of APIs and generics. With India and China accounting for the lion’s share of global supply, Europe’s role has become increasingly peripheral, not just in volume but in strategic control.
What is now taking shape is not simply a reaction to past exposure, but a broader recalibration of what supply security should look like in a more volatile global context. As Peter Jorgensen, Director of the Danish Generic and Biosimilar Medicines Industry Association (IGL), affirms: “It is not unrealistic to imagine a renewed push for onshoring pharmaceutical production to Europe… If that is ultimately deemed necessary for the sake of security and resilience, then so be it.”
Rather than reverting to protectionism, has moved toward intelligent diversification: expanding sourcing geographies, increasing redundancy for critical products, and creating regional anchors of manufacturing excellence. – such as Switzerland, Denmark, and Germany – this shift presents not only a risk mitigation strategy, but a competitive opening to re-establish Europe as a critical player in the global manufacturing landscape.
However, for those without such structural advantages, the path forward will be more demanding. Rebuilding competitive capacity will require not only capital investment, but also sustained focus on workforce development, regulatory capability, and industrial policy coherence. As Mads Koch Hansen, Director of Medicoindustrien, observes: “What we call a common market is in reality a collection of 27 separate systems. Each country interprets and implements the rules differently.” This institutional fragmentation poses a significant challenge to coordinated manufacturing revival, increasing the risk that the benefits of reshoring remain concentrated, exacerbating disparities rather than strengthening the continent as a whole.
The Critical Medicines Act: A step forward, but is it enough?
The European Commission’s Critical Medicines Act (CMA), introduced in 2024 alongside the broader EU Pharma Package, represents the most significant legislative push in years to re-anchor pharmaceutical manufacturing within Europe. Designed in response to recurring supply shocks and medicine shortages, the Act proposes joint procurement mechanisms, enhanced supply monitoring, and a list of strategic manufacturing projects eligible for accelerated approval and public investment. Its stated ambition is to move from reactive crisis management to a more secure and predictable supply model.
Yet for all its architectural promise, the Act remains tentative where it matters most: funding, implementation, and long-term commitment. Without dedicated financial backing, its incentive structure risks falling short, particularly in lower-margin therapeutic areas where production has already shifted abroad. Equally, the decentralised nature of its execution raises concerns about uneven uptake across member states.
The CMA may mark a turning point in intent, but intent alone cannot reconstitute capabilities lost over decades. Unless accompanied by coordinated execution, sustained financing, and strategic workforce development, the Act risks becoming more symbolic than structural.
Procurement reform: Moving beyond price-driven decisions
For too long, pharmaceutical procurement in Europe has been governed by a rigid focus on lowest unit price. While fiscally expedient, this approach has gradually hollowed out supply chain resilience, making it difficult for manufacturers to invest in local production, maintain environmental compliance, or adapt to demand shocks. Single-winner tenders and hyper-competitive pricing leave no margin for error, and even less for strategic reinvestment.
A shift is underway in select countries. Denmark, for example, has begun to reframe procurement not simply as a budgeting exercise but as a strategic tool for health and industrial policy. Its model balances affordability with resilience, underpinned by fixed pharmacy margins, transparent pricing structures, and qualitative tender criteria that reward proximity of manufacturing, reliability of supply, and environmental responsibility.
This shift does not occur in isolation. As Vanessa Vega Saenz, Director of Invest in Denmark observes, “We always ask incoming investors why they chose Denmark, and the responses tend to highlight many of the same themes: a stable policy environment, access to skilled labour, an efficient regulatory framework, and quality of life.” These systemic advantages, when paired with procurement models that look beyond price alone, create conditions where long-term industrial commitments can flourish.
Manufacturers, too, are responding to this evolution. As Daniel Palmacci, Head and President of Specialized Modalities Lonza, puts it, “Rather than competing solely on price, we emphasize our ability to derisk development programmes through scientific expertise, regulatory knowledge, and manufacturing excellence.” Unlocking the full value of such contributions requires procurement frameworks that do more than chase discounts, they must reward performance, partnership, and strategic alignment.
Ultimately, embedding resilience into Europe’s medicine supply will depend less on new regulation and more on the political will to evolve procurement from a cost-minimisation mechanism into an enabler of sustainable industrial policy.
Flagship ecosystems: What Denmark and Switzerland can teach the rest of Europe
While many European nations remain entangled in regulatory complexity and delayed execution, Denmark and Switzerland have quietly established themselves as frontrunners in the continent’s manufacturing revival. Rather than waiting for centralised policy reform, both countries have leveraged their national strengths – regulatory agility, targeted investment, and well-calibrated public-private collaboration – to build environments where pharmaceutical manufacturing does more than survive; it scales.
Denmark’s approach combines strategic government backing with academic-industry alignment and a focus on predictable, investor-friendly conditions. Its appeal to CDMOs and biotech innovators lies not only in infrastructure but also in the strength and cohesion of its broader life sciences environment. As Vanessa Vega Saenz of Invest in Denmark, explains, “Investing in Danish life sciences means joining a robust and well-integrated ecosystem. The entire value chain, spanning from early-stage research to manufacturing and commercialisation, is accessible within the country.”
Switzerland offers a similarly compelling model, combining scientific depth with precision industrial capability. Its national life sciences ecosystem fosters natural convergence between pharmaceutical, biotech, and medtech fields; an advantage not lost on international investors. As Thomas Bohn, CEO of the Greater Geneva Bern area, puts it, “Switzerland’s life sciences heritage creates natural synergies across biotech, pharmaceutical, and medtech sectors.” This cross-pollination is enabled by a foundation of political stability, advanced infrastructure, and a regulatory framework that supports, rather than inhibits, scaling innovation.
These ecosystems are not anomalies; they are demonstrators of what is possible when policy, industry, and infrastructure are synchronised toward long-term competitiveness.
Innovation at risk: Can Europe lead the next biotech wave?
Much of Europe’s recent policy momentum around pharmaceutical manufacturing has centred on stabilising supply for generics and off-patent medicines, segments most acutely impacted by shortages. While addressing these vulnerabilities is necessary, it does little to secure the continent’s long-term position in the next generation of therapeutics. Advanced platforms such as cell and gene therapies, mRNA modalities, and other ATMPs require more than scientific promise. They demand dedicated infrastructure, regulatory agility, and significant capital investment. As these therapies increasingly shape the future of medicine, the risk is no longer limited to supply chain dependency, but extends to the potential erosion of Europe’s innovation leadership.
Bridging this gap will require a shift in mindset, from short-term crisis management to long-term strategic readiness. Beyond large-scale legacy plants, advanced modalities increasingly rely on modular, decentralised production models; bringing manufacturing closer to clinical sites and enabling greater responsiveness. Supporting such a transformation calls not only for physical infrastructure but also for a regulatory ecosystem capable of keeping pace with scientific progress through timely and robust evaluation. As Julia Djonova, Head of the Advanced Therapy Medicinal Products Division at Swissmedic, explains, “The sheer diversity and complexity of ATMPs necessitate that assessors maintain cutting-edge knowledge supported not only through training programmes, but also interdisciplinary collaboration across clinical, quality, regulatory, and inspection functions.”
This regulatory sophistication hinges as much on human capital as on institutional design. As Djonova further stresses, “Regulating ATMPs in a constantly evolving landscape requires more than structural adaptation; it demands sustained, deliberate investment in people.” Without a skilled, agile regulatory workforce, even the most promising innovations may struggle to reach patients in time.
If Europe is to avoid falling behind in the biotech race, it must complement its resilience agenda with a commitment to cultivating the infrastructure, policy frameworks, and human expertise that transformative therapies demand.
The sustainability squeeze
As Europe intensifies its focus on environmental sustainability, pharmaceutical manufacturers find themselves under growing pressure to comply with increasingly stringent ecological requirements. Measures such as the revised Urban Wastewater Treatment Directive reflect a legitimate push to reduce the sector’s environmental footprint, yet their implications are far from neutral, particularly for companies already contending with narrow margins and complex regulatory demands.
Meeting these standards often necessitates substantial investments in infrastructure, process upgrades, and emissions control technologies. While larger manufacturers may be better positioned to absorb these costs, smaller players especially those operating in lower-volume or less profitable markets, may struggle to adapt, raising the risk of production curtailment or exit. This, in turn, threatens to undermine the very supply resilience that Europe is actively working to restore.
Still, some countries are demonstrating that industrial competitiveness and environmental responsibility can be mutually reinforcing. A case in point is Denmark, where sustainability and competitiveness go hand in hand. “Denmark has shown it can be a great environment for this kind of production, particularly when combined with our green energy infrastructure and commitment to sustainability,” notes Ida Sofie Jensen, CEO of the Danish Association of the Pharmaceutical Industry (Lif). Her point underlines how aligning sustainability goals with national infrastructure and policy coherence can create a more resilient, future-ready manufacturing base.
Ultimately, environmental ambition must be woven into the design of pharmaceutical industrial policy, not layered on top of it. Only by embedding sustainability into the strategic architecture of manufacturing can Europe meet its twin imperatives: securing access to medicines and advancing ecological stewardship.
Talent & Know-how: Why skills matter more than ever
The long arc of offshoring has eroded more than just physical manufacturing capacity across Europe, it has steadily hollowed out the specialised expertise needed to support pharmaceutical production at scale. As the sector pivots toward complex biologics, cell and gene therapies, and digitally integrated manufacturing platforms, the lack of skilled professionals is emerging as a critical, often underestimated, constraint.
This challenge goes beyond workforce numbers. It is a question of cross-functional competence, where deep technical knowledge must be paired with regulatory fluency, quality assurance, and process optimisation. Such capabilities are rarely built overnight; they require structured training and hands-on experience accumulated over years. Without sustained investment in talent development, even well-capitalised projects risk faltering in execution.
Some countries and companies are responding with intent. Lonza’s internal reskilling efforts, Swissmedic’s scientific regulatory training, and the TRACE programme developed by IBSA – a Switzerland-based pharmaceutical company active in endocrinology, reproductive health, and biotech – reflect a growing recognition that talent is strategic infrastructure. As Luca Crippa of notes, “Participants (at TRACE) have noted the professionalism of the environment and the quality of content, often describing the experience as uniquely immersive and scientifically rich.” This kind of initiative illustrates how industry-led programmes can reinforce Europe’s technical base while attracting and retaining the next generation of biomanufacturing leaders.
Rebuilding Europe’s pharmaceutical autonomy will not be achieved by capital investment alone. It will depend on who trains, retains, and empowers the workforce capable of delivering the therapies of tomorrow.
