The Covid-19 pandemic exposed a vulnerability Europe had preferred to ignore: its structural dependence on external suppliers for essential medicines, medical equipment, and agricultural inputs. Since then, geopolitical tensions have only reinforced this assessment. The concentration of active pharmaceutical ingredient production in Asia, the fragility of supplies of antibiotics, insulin, and painkillers:  these are now visible fault lines that demand a concrete response.

That response is taking shape. The EU Council and European Parliament have just reached an agreement on the Critical Medicines Act, a text aimed at reducing shortages of key medicines and relocating pharmaceutical production to European soil. This initiative is directly in line with the logic of the Draghi Report.

The text introduces three operational levers: mandatory resilience criteria in public procurement, with a preference for European suppliers; facilitated joint purchasing; and a contingency stock-sharing mechanism between member states. These three mechanisms feed directly into the "Secure Healthcare & Food" pillar of our "European Sovereignty" strategy, structured around three axes:

  • Pharma: relocating the production of generics and active ingredients, accelerating manufacturing capacity in Europe, strengthening strategic stockpiles.
  • Medtechs & other equipment: growth of European players in high-tech medical devices, driven by public procurement policies favouring local suppliers.
  • Sustainable food: reducing dependence on imported inputs, developing resilient agricultural systems in a context of increasing climate disruption.

Our conviction on this theme remains unwavering. Geopolitical pressures, post-Covid healthcare resilience requirements, and the political will displayed in Brussels make this one of the most solid themes of the current cycle. Kepler Cheuvreux's research teams have identified, within each sub-theme, the companies best positioned to benefit.

Feel free to contact Renalco SA to learn more if you are interested in this opportunity (info@renalco.ch).