2025 life sciences industry outlook: What's next?

Digital transformation

As with most industries across the globe and previous years' expectations, digital transformation will be critical in the life sciences industry in 2025. According to the executives responding to the survey, the following trends regarding digital transformation will likely impact the life sciences industry in the coming year:

• Accelerated digital transformation.
• Proliferation of generative AI (GenAI).
• Increasing and escalating cyber attacks.

Deloitte anticipates that advancements in the digital space, including cloud computing and GenAI, will be vital tools moving forward in the industry.

According to a survey conducted by the consulting firm, 60% of life sciences executives will be monitoring GenAI or digital transformation trends as the new year approaches and continues. A similar proportion of executives have plans to increase their GenAI investments across the value chain, expanding behind pilot projects and programs seen in the past.

A look at the statistics provides a clear motive for this shift in trends. Deloitte analysts estimate that AI investments could offer medtech companies cost savings of up to 12% of total revenue across the next couple of years.

AI investments can help address several challenges across the life sciences landscape, with benefits ranging from lower-cost research and development to boosted employee productivity.

To keep up with digital transformations and changing trends, life sciences companies are prepared to take many actions, including investing in technology platforms, investing in transformative technologies and enhancing cybersecurity efforts.

Competitive pressures

Several industry-wide trends in the competitive landscape are expected to contribute to the evolution of the life sciences industry in the coming year, including the following:

• Pricing and access to drugs, therapies, and medical devices.
• Competitive pressures from generics and biosimilars coming to market.
• Patent cliffs or expirations on blockbuster drugs.
• Interest in direct-to-consumer drugs.

Across the industry, challenges regarding pricing and access have consistently been at the forefront, and that is expected to persist in 2025. Approximately 47% of C-suite executives anticipate that pricing and access will significantly affect strategies in the coming year. Most of the remaining respondents, 49%, expect these factors to have a moderate impact.

Beyond those challenges, roughly one-third of executives surveyed are concerned about competition from generics and biosimilars. Another third is concerned about the looming patent cliffs and how they may impact revenue.

Industry leaders and executives must focus on continued innovation to address these challenges and persistent competitive pressures. By looking at existing gaps and profitable disease areas, life sciences companies can determine the ideal areas to focus on. However, innovation can be slow and expensive.

To prepare for these challenges and evolving trends, life science executives are taking many actions, including investing in improved R&D productivity, improving clinical trial diversity, strengthening real-world evidence and multimodal data capabilities, aligning mergers and acquisitions with corporate strategies and rethinking portfolio strategies.

Business volatility

In addition to challenges from competitive pressures, the report mentioned that life sciences companies are bracing for business volatility in 2025. They looked at known challenges as well as unpredictable risks. Among known challenges, Deloitte acknowledges that regulatory changes in the U.S., the impact of the presidential on the life sciences industry, and global regulatory changes might contribute to business volatility. Other trends that might contribute are more unpredictable risks, such as manufacturing and supply chain risk, inflation and a potential economic recession.

In anticipation of business volatility, life sciences leaders are focusing on multiple actions to combat the potential challenges, including performance improvement efforts, which might require cost-cutting, optimizing operating models, focusing on geographic market expansion, building supply change resiliency and adaptability, and building proactive global risk mitigation strategies.

Evolving customer needs

As patient needs continue to evolve, the industry will need to adapt to keep up with the changing landscape. Beyond their changing needs and preferences, customers have also continued to adopt digital tools. Going hand-in-hand with digital transformation initiatives, companies have to acknowledge how customer adoption might impact their strategies and the success of those strategies.

In response to evolving consumer needs, life science companies have adopted strategies intended to improve customer experience, engagement and trust. Additionally, they are investing in customer engagement strategies and enabling technologies.

Overall, the report anticipates significant and dynamic growth in the upcoming year for the life sciences industry. Although several challenges might pose barriers to growth, most executives surveyed in the report are optimistic about the industry's future.

"We are full of expectations for personalized medicine," a senior vice president of a small German pharma company explained to Deloitte analysts in the survey. "With advances in genomics and biomarkers, we can provide patients with more precise treatment options. This not only improves efficacy but also significantly reduces side-effects, allowing patients to have a better treatment experience."

As innovations continue, it will be critical to watch the industry as it evolves and analyze how outside pressures might impact these developments.

Veronica Salib has covered news related to the pharmaceutical and life sciences industry since 2022.