Life Sciences Global Market Trends

Digital transformation will drive more change in 2025

Life sciences' digital transformation, fueled by cloud computing and generative AI, is reshaping products, services, operations, and strategy.

In 2025, 60% of executives are closely monitoring gen AI and digital transformation, with nearly 60% planning increased gen AI investment across the value chain, moving beyond pilots to scaled implementation.
Deloitte analysis suggests AI investments could generate up to 11% of revenue value for biopharma and up to 12% cost savings for medtech within 2-3 years.
Gen AI is considered more transformative than previous digital innovations, promising R&D cost reduction, streamlined back-office operations, enhanced customer self-service, and boosted productivity.

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. The challenge lies in developing consistent metrics, as digital projects span diverse goals including risk management, operational efficiency, and customer satisfaction that don’t easily compare under one measure like ROI. Creating a meaningful prioritization framework for these investments is still evolving.”

Akiko Amakawa, Corporate Strategy Officer & CEO chief of staff at Takeda

Digital transformation will drive more change in 2025

R&D / portfolio strategies to mitigate competitive pressures

Pricing and access to drugs/devices is the top concern for life sciences C-suite executives, with 47% predicting a significant impact and 49% a moderate impact on 2025 strategies. 37% cite generic/biosimilar competition, and 30% the patent cliff as major trends. EvaluatePharma data shows >US$300B in sales at risk by 2030 due to patent expirations, driving 77% of executives to expect increased M&A in 2025.

While companies are pursuing innovation in areas like oncology and immunology, overlapping strategies create competition and price pressure. The US$200B GLP-1 market is revitalizing interest in general medicines, with these drugs targeting common conditions like obesity (affecting 1 in 8 globally) and potentially impacting other healthcare sectors. R&D will be a major focus in 2025, with companies exploring diverse initiatives.

Rethinking R&D strategies

Declining R&D productivity is a major concern:

50% of medtech and 56% of biopharma executives (survey data) need to rethink R&D strategies.
Nearly 40% of all respondents cited improving R&D productivity as crucial.
Traditional R&D is slow, stage-gated, and requires large trials, with drug failure rates as high as 90% (Deloitte).
Biopharma is leveraging AI and digital twins (virtual patient replicas) for faster testing and development (e.g., Sanofi using digital twins and AI for predictive modeling, reducing R&D time from weeks to hours).

R&D / portfolio strategies to mitigate competitive pressures

Ensuring acquisitions align with corporate strategies

Life sciences M&A drives innovation, often used to fill portfolio gaps exacerbated by patent cliffs. Successful acquisitions align therapeutic expertise with commercial capabilities, like Pfizer's Biohaven purchase to expand its neurology offerings, or Medtronic's Mazor Robotics acquisition to enhance surgical precision. However, M&A can fail due to clinical trial uncertainties, integration challenges, and strategic misalignment.

Strengthening real-world and multimodal data capabilities

56% of surveyed life sciences companies prioritize real-world evidence and multimodal data (clinical, genomic, patient-reported), but only 21% consider it "very important." This gap suggests many lack the necessary analytics infrastructure and data science expertise to effectively utilize multimodal data.

Life sciences firms brace for business volatility in 2025

Overall Life Sciences Outlook

While several potentially disruptive forces could reshape the life sciences industry in 2025, the vast majority (75%) of global life sciences executives are optimistic about the year ahead, according to a recent survey from the Deloitte US Center for Health Solutions. Many are anticipating revenue increases and 57% predicting margin expansions in 2025.

33% are concerned about potential US regulatory changes
37% about global regulatory/geopolitical uncertainty (up from previous years).
Inflation/economic uncertainty concerns have decreased
Key regulatory issues include the Inflation Reduction Act, software as medical device regulation, and the potential overturn of the Chevron doctrine in the US, and clinical trial regulation in Europe (implementation concluding January 2025, with challenges in plain language summaries and data anonymization).
36% are evaluating unpredictable challenges like inflation, recession, and supply chain/manufacturing disruptions.
37% prioritize resilient supply chains (48% of medtech executives, 30% of biopharma), with digitalization as a key strategy.
60% prioritize operating model optimization (27% "very important")
nearly 30% plan performance improvement initiatives like cost-cutting (restructuring, offshoring, outsourcing, layoffs in 2024)
24% rate cybersecurity investments as "very important" and 43% as "important"
Regarding sustainability, 83% of non-US and 77% of US respondents anticipate increased regulatory emphasis, particularly related to the EU's Corporate Sustainability Reporting Directive. While companies report progress on ESG goals, sustainability is often viewed as compliance-driven.