From AI and layoffs to supply chains and political unknowns, Deloitte outlines key areas for biopharma to watch in 2025

As the life sciences industry prepares for a new administration, grapples with cutting-edge technology and braces for the potential impact of inflation and supply chain disruptions, there are plenty of challenges in store for 2025—and much to be optimistic about, too.

That’s according to the Deloitte U.S. Center for Health Solutions, which found in a recent survey of 150 C-suite executives across the global life sciences sphere that 75% of respondents are optimistic about the year ahead.

The executives’ hopes for the coming year hinge largely on growth expectations, with 68% of respondents predicting revenue increases at their companies and 57% forecasting margin expansions in 2025, Deloitte said in a press release outlining the results from the poll.

Beyond that optimism, the executives laid out four areas of particular concern in the coming year, including leveraging the industry's ongoing digital transformation, designing R&D and portfolio strategies to help weather competition, preparing for business volatility and reshaping business strategies to meet customer expectations.

 

R&D rethink

 

With hundreds of billions in drug sales at risk through 2030 due to patent expirations, many companies are turning to innovation to offset potential losses, according to Deloitte. But some time-tested strategies—such as focusing on high-value areas like oncology and immunology—may not be the answer for everyone. 

For example, more than half of the biopharma executives Deloitte surveyed said their companies need to rethink their R&D and product development strategies over the next 12 months.

Companies may also look to scale back their pipelines to focus on high-potential candidates—a move Deloitte notes can have an “immediate impact on expenses.” To avoid competition with branded rivals, drugmakers are also looking to throw their chips in with newer modalities such as cell and gene therapies using CAR-T cells and CRISPR technology, Deloitte said.

Business development certainly has a role to play in companies’ innovation strategies, too, with 77% of executives surveyed noting they expect M&A to increase in 2025.

 

AI's growing impact

 

Beyond pipeline reviews, companies are increasingly looking at novel tech heading into 2025.

About 60% of executives cited in Deloitte’s poll pointed to generative AI or digital advances as areas they’re monitoring closely, with about that same number of respondents saying they plan to increase generative AI investments.

This seems to suggest that companies are moving these innovations beyond initial pilot projects and beginning to realize value from adopting these technologies at scale, Deloitte argued.

“Currently, digital investments are driven by specific initiatives, but we will need to develop a prioritization framework to manage these investments as a portfolio just like we have been managing our R&D pipeline,” Akiko Amakawa, Takeda's corporate strategy officer and CEO chief of staff, told Deloitte in an interview.

 

Turbulence ahead?

 

Elsewhere, some biopharma firms are being realistic about potential turbulence ahead and bracing for business volatility on the horizon.

About one-third of the respondents interviewed by Deloitte said they’re worried about potential changes to U.S. regulations in 2025, while another 37% said they are apprehensive about global regulatory shifts and geopolitical uncertainties.

Meanwhile, 36% of executives polled said they're evaluating the potential impact of challenges like inflation, economic recessions and disruptions to supply chains and manufacturing.

In turn, 37% of respondents listed building resilient and adaptable supply chains as top of mind for 2025.

As for other means to weather economic uncertainties, nearly 65% of executives surveyed said they are considering rethinking their operating models as a priority next year, in a move that could hint at cost-cutting measures like restructuring, offshoring, outsourcing and layoffs.

 

Political unknowns

 

Deloitte also highlighted another major unknown in Donald J. Trump’s return to the White House in January.

Writ large, the incumbent president has promoted programs that attempted to reign in drug costs for seniors, but he hasn’t directly endorsed the drug pricing provisions in the Inflation Reduction Act, Deloitte pointed out. Instead, Trump has hinted at revising a proposal from his first term, which would involve creating a “most favored nation” model to cap Medicare drug prices at levels paid by other countries.

Overall, while competitive pressures and market uncertainties inherent in the industry are sure to weigh on drugmakers in 2025, most global life sciences firms appear upbeat about their prospects in the coming year, if Deloitte’s survey is any indication.

“The integration of technologies like gen AI and the increased use of data are expected to boost operational efficiencies and drive breakthrough innovations,” the consulting firm said. “As companies adapt to this evolving landscape, their ability to implement new initiatives will be crucial for differentiation and market expansion. The industry’s focus on advancing therapeutic solutions and improving patient outcomes highlights a promising future.”