International Trade of Pharmaceutical Products and Issues of National Security

Abstract

With the COVID-19 pandemic, the world entered a reality that can be called “medicines power” . The closure of factories in China due to strict quarantine, the ban on exporting certain goods from India in early 2020, the unavailability of air transportation, and blocked sea routes caused disruptions in supply and blocked value-added chains . It became evident: there is a threat of depend on the import of active pharmaceutical ingredients and medicaments, medicinal, and pharmaceutical products, production of which is concentrated in Asia . It is clear that countries with scientific, technological, innovational and production capabilities to ensure the needs of healthcare sector (including pharmaceutical goods), are less vulnerable and dependent on imported supplies (mostly from unfriendly nations) . On the contrary, countries lacking adequate resources face national security threats . These threats are especially exacerbated during epidemics, crises, environmental disasters, and military conflicts . The aim of this article is to analyze of EU policy and the key trends in the export of pharmaceutical industry products from the EU, especially after the large-scale russian military invasion of Ukraine in February 2022 (and the European Council’s strong condemnation of russia’s aggressive war against Ukraine, and the imposition of a series of sanctions); in particular the identification of the volume of exports to russia and Ukraine; the development of recommendations for Ukraine regarding the development of the pharmaceutical industry and reducing external dependence on supplies and threats to national security . The analysis showed that in 2023, russia ranked 6th among the largest EU partners for the import of medicinal products, medical and pharmaceutical goods . The EU exported medicaments, medicinal, and pharmaceutical products to russia worth €8 .8 billion (medicaments, medicinal, and pharmaceutical products became the leaders in exports from the EU to russia in 2022–2023) . Ukraine paid $1 .96 billion for the import of this goods; in 2023, the expenses increased to $2 .21 billion (close to the amount paid in 2019, which was $2 .24 billion), despite a significant decrease in Ukraine’s population due to migration, casualties, and the temporary occupation of Ukrainian territories . Since the responsibility of governments lies in efforts to care for the nation’s health, ensure the efficiency of the economic system and social stability, the article justifies the need to initiate negotiations with European partners regarding the construction of pharmaceutical enterprises (relocating from Asia), specifically for the production of pharmaceutical and biological ingredients, as well as finished medicines, within Ukraine . Such measures are a rational and politically justified decision . This will help reduce the EU and Ukraine’s external strategic dependence on supplies (including from unfriendly countries) and ensure the regulation and management of the industry’s development in national interests . In case of threats, this will allow measures to influence the structure and volume of production, which, as the 2020 lockdown showed, turned out to be impossible with the placement of production capacities in countries where the free flow of goods becomes difficult in crisis situations .