A medicine shortage can start long before a patient walks into a pharmacy and finds an empty shelf.
It might start with an API supplier that cannot deliver. It could be a problem at a manufacturing site. A damaged facility. A failed batch. Or simply the loss of one production line that was doing more of the work than anyone realised.
The problem is that pharmaceutical supply chains often stretch across several countries. One company may make the API. Another may produce the finished medicine. A third may supply the packaging, a component or a specialised piece of equipment.
When one part stops working, the impact can travel quickly.
That is one reason Europe’s drug supply has become a much bigger industrial and political issue. Europe is not simply looking for more pharmaceutical factories. It wants a supply base that can keep working when something goes wrong.
And Germany sits right in the middle of that discussion.
The country already has one of Europe’s largest pharmaceutical industries. It has major manufacturers, research capabilities, engineering expertise, and a long-established industrial base.
But there is a catch.
Germany also faces some of the cost and regulatory pressures that have pushed pharmaceutical investment towards other locations. So while the country has the industrial base to support a stronger European medicine supply, it still has to make the numbers work.
Why Europe is looking at its medicine supply differently
For years, the pharmaceutical industry benefited from global specialisation.
Manufacturers could source ingredients from places where they could be produced more cheaply. Companies could concentrate production in a smaller number of large sites. Suppliers could serve several markets from the same facility.
From a cost perspective, that made sense.
From a resilience perspective, it created weak points.
The COVID-19 pandemic exposed some of them. Geopolitical tensions, export restrictions, transport disruption and individual manufacturing problems have added to the concern.
The EU has responded by putting more attention on critical medicines.
These are not simply medicines that happen to be popular or widely used. The EU’s approach considers factors such as how serious the condition is and whether suitable alternatives are available.
That distinction is important.
If a medicine has five reliable alternatives, a disruption is serious but manageable. If a medicine has very few alternatives and is needed for a serious condition, losing one major supplier can become a much bigger problem.
That is where medicine shortages in Europe become an industrial issue rather than only a healthcare issue.
The question becomes simple:
Where does Europe have enough alternative production if one major source fails?
In some cases, the answer is not very reassuring.
The EU is already changing the rules
The policy response has moved well beyond discussion.
The EU’s Critical Medicines Act is designed to reduce supply risks by supporting more diversified sourcing and stronger manufacturing capacity within Europe. It also puts more focus on active pharmaceutical ingredients and other inputs that sit further upstream in the production process.
Public procurement is part of the picture too.
For a long time, the cheapest compliant supplier could have a strong advantage. The new approach gives governments more room to consider security of supply when purchasing certain medicines.
That could make European manufacturing more attractive.
But it would be wrong to assume that a new law can solve the problem on its own.
A European factory still has to compete.
It needs capital. Further, it needs qualified people. It needs reliable energy and utilities. It needs equipment that works consistently. Most importantly, it needs enough demand to justify the investment.
That last point is easy to overlook.
A company will not build a major facility simply because Europe would benefit from having one. Someone still has to pay for it, operate it, and keep it commercially viable.
So the future of Europe’s drug supply will depend partly on whether policy can change the economics of manufacturing.
Germany already has many of the pieces
Germany is not starting from scratch.
Germany’s pharmaceutical industry generated around €67.9 billion in revenue in 2025. The country has more than 650 pharmaceutical companies and around 133,000 people working in the sector.
There is also a strong R&D base. Pharmaceutical companies invested around €10.7 billion in R&D in 2024, the highest level among EU countries.
That gives Germany a useful advantage.
It already has:
- Large pharmaceutical manufacturers
- Established production sites
- Specialist engineering & technical expertise
- Research institutions and R&D investment
- Experienced GMP / quality professionals
- A network of suppliers serving the pharmaceutical sector
That infrastructure takes decades to build.
It is also why pharmaceutical manufacturing in Germany matters beyond Germany itself. If the country expands the right types of production, it can add capacity to the wider European system.
But there is another side to the story.
Germany’s pharmaceutical strength comes with a cost
The wider German chemical & pharmaceutical industry has been under pressure.
Industry data from 2026 points to weak production, high energy and raw-material costs, and continued pressure on investment. Investment in the wider chemical-pharmaceutical sector has fallen for a third consecutive year.
So Germany has a strange position.
It has the companies/expertise Europe needs.
At the same time, some companies are finding it increasingly difficult to justify putting their next major investment there.
This creates a highly practical problem for Europe’s drug supply.
If Europe wants more production on European soil, it cannot only ask manufacturers to build more. It also has to ask why a company would choose Germany for that investment rather than another location.
The answer will depend on much more than subsidies.
Project timelines matter. Energy prices matter. Regulatory processes matter. Availability of specialist workers matters. The cost of running a site for the next 15 or 20 years matters even more.
Moving finished medicines back is not enough
There is a related aspect of the reshoring discussion that is worth more attention.
The finished drug is just one part of the supply chain.
Tablets, injectables and biologics need to have several components – active pharmaceutical ingredients (APIs), excipients, packaging materials, specialised components – prior to a product reaching the market.
That means Europe could build more finished-dose manufacturing & remain dependent on overseas suppliers.
APIs are particularly important.
Research published in 2026 on bringing API production back to Europe found that reshoring could improve resilience. However, high European production costs/weaker commercial incentives can make that difficult.
So there is no realistic argument for Europe producing everything itself.
That would be expensive &, in many cases, unnecessary.
A better goal is to avoid dangerous concentration.
If Europe depends on one country for an ingredient that has very few alternatives, the risk remains. If there are multiple eligible providers in different regions, the system is better able to withstand a disruption.
That is the difference between reshoring & resilience.
They are not the same thing.
A new factory does not automatically mean a safer supply
Recent shortage data shows why simply adding a new facility does not remove every supply risk.
EMA is currently tracking an EU/EEA shortage of Azactam, an injectable antibiotic containing aztreonam. The shortage started in Q2 2026 after manufacturing problems at a new production site. EMA currently expects the shortage to continue until the end of June 2027.
The fact that the issue happened at a new site is worth noting. A new facility can still run into production problems.
The real test starts once construction is over.
The line needs to run consistently. Equipment needs to stay available. Maintenance needs to keep downtime under control. If a deviation occurs, the team needs to investigate it without holding up production for too long. Batches also need to move through testing and release on time.
These issues matter even more in sterile manufacturing.
A facility can have a high capacity figure on paper. That does not mean it will always reach that output. A filling machine may become the limiting step. The same can happen with a lyophiliser or an inspection system.
For example, adding more upstream capacity will not help much if the filling line is already running at its limit.
This is why manufacturers need to look beyond the capacity stated in a project plan. They need to know how much the site can produce reliably in normal operation.
Downtime, maintenance, changeovers, and equipment limits can all reduce the actual output.
So counting new factories does not tell us enough about Europe’s drug supply.
The more useful question is simpler: how much capacity can manufacturers actually rely on when demand rises, or another supplier suddenly cannot deliver?
Europe may be able to get more output from the sites it already has
This is where existing facilities can make a real difference.
A new sterile facility does not come online quickly. First comes the design and construction. Then the equipment has to be installed, qualified, and validated. After that, the site still needs time to transfer the process and reach a stable production rate.
An existing site is already past most of those stages.
The building is there. The utilities are in place. The systems have been qualified. The teams already know the site and its processes.
So before building another facility, it is worth asking a simpler question: what is actually holding the current site back?
It might be:
- A filling line that cannot keep up with demand
- A lyophiliser that limits the no. of batches
- Equipment that is frequently out of service
- Maintenance that is not preventing repeat failures
- Long changeover times b/w products
- Technology transfers that take longer than expected
- Delays in inspection/batch release
- Production schedules that leave equipment sitting idle
Not all of these problems require a new building.
A maintenance problem can be fixed with higher reliability. A production problem may require another production plan. In some cases, automation, or new equipment, allows you to gain capacity (capacity gain) without a site enlargement.
There are limits, of course. An established facility can’t continuously increase its output forever. Cleanroom space, utilities, and equipment eventually max out.
But that’s precisely why it makes sense to locate the bottleneck first.
Europe may not always require another greenfield facility to boost supply. In some scenarios, the best way to add capacity may be to obtain more consistent output from the facilities that are already up and running.
What this means for manufacturers
For manufacturers, this comes down to a pretty basic question: if something goes wrong, how hard is it to keep the product moving?
Start with the product, then look at the weak points behind it.
Maybe the API comes from one supplier. Maybe there is only one site making it. Or maybe there is another supplier, but it has not been approved yet. In some cases, the problem is at the manufacturing site itself. The site may have enough capacity on paper, but still struggle to hit that number day after day.
A few things are worth checking:
- Which products depend on one supplier / one site / one region?
- If that supplier stops delivering, how quickly can another one be qualified?
- How much can the site actually produce at a steady rate?
- What is slowing production down right now?
- Would fixing those issues add more useful capacity than building another facility?
- Where would new capacity have the biggest impact?
- How much stock is enough to give the site some breathing room?
There will not be one answer for every product.
One may need a second API supplier. Another may have enough API but not enough fill-finish capacity. A third may have the right equipment but lose too much time to breakdowns, changeovers or delays in batch release.
This is where the pharmaceutical supply chain gets real.
Knowing where a material comes from is only the starting point. Manufacturers also need a plan for what happens if that source stops supplying.
Can production switch to another source? How much stock is sitting on site? Is the alternative supplier already qualified?
These are the details that decide how well a site can keep running when something goes wrong.
Germany has the manufacturing base. The question is where to use it.
Germany is already a major pharma manufacturing location. It has large drugmakers, established production sites, research facilities & a skilled workforce.
So the basic manufacturing capability is there.
Getting companies to build more capacity is a different matter.
A new plant has to make financial sense. Energy costs matter. So do planning and approval times, site infrastructure, construction costs & access to skilled staff. If a project takes too long to build or becomes too expensive to operate, the investment case gets weaker.
That also means Germany cannot try to make everything locally.
There is little sense in bringing every API and finished medicine back to Europe just for the sake of having local production. It would be expensive, and it would still leave other parts of the supply chain exposed.
The focus needs to be narrower.
Where does Europe have the biggest supply risks? Which medicines are difficult to replace? Where would another manufacturing site actually give companies a useful backup?
For some products, that could mean more API production. For others, it could mean more sterile manufacturing capacity. In other cases, companies may get more value from improving an existing site rather than building a new one.
That could mean increasing the output of a filling line, reducing equipment downtime, or fixing a bottleneck that has been limiting production for years.
Germany does not have to produce everything.
It needs enough production capacity & enough alternatives to stop a problem at one site from becoming a shortage in several countries.
The next part of the reshoring debate happens on the factory floor
This is where the discussion becomes much more practical.
Companies now have to work out what they actually need to change at their sites. Some may need more capacity. Others may need better use of the capacity they already have. Some may need a second supplier or another production site as a backup.
For sterile manufacturing teams, these decisions come down to fairly familiar issues. How fast can the filling line run? Where are the delays? How often is equipment down? Can a new process be transferred without disrupting production? Is there enough capacity to handle higher demand?
The Aseptic Manufacturing GMP & Sterile Facility Design Summit in Düsseldorf, Germany, on 12–13 November 2026 will cover many of these areas.
Sessions look at sterile capacity investment, fill-finish performance, technology transfer, lyophilisation, supplier risk, isolator & RABS implementation, automation, facility design, maintenance & debottlenecking.
These are the things that decide what a site can actually produce.
A facility might have a large stated capacity, but that does not mean it will hit that number every month. A filling line can become a bottleneck. Equipment failures can eat into production time. A difficult technology transfer can delay a new product. Supplier problems can hold up the whole process.
So adding up the number of new factories will only tell us part of the story.
What matters more is how much product those sites can reliably make, and what happens when one of them goes offline.
That is the real test for Europe’s drug supply. Learn more!