2025 life sciences outlook: top priorities and insights
By Karen Taylor, Director, Centre for Health Solutions
A Deloitte survey of global life sciences (LS) executives conducted in 2024 finds that despite potential disruptions that could reshape the LS industry in 2025, 75 per cent of respondents are optimistic about the year ahead. This optimism is driven by strong growth expectations and a belief that advancements in science and technology could lead to more breakthrough innovations. This survey forms the backdrop to the Deloitte US Center for Health Solutions global 2025 life sciences outlook report highlighting the industry's top priorities and insights. This week’s blog explores these priorities and key insights including the role of digital transformation in driving more change in 2025.
About the research
The US Center surveyed 150 C-suite executives from biopharma companies and medical technology (Medtech) manufacturing companies, across the United States, Europe (France, Germany, Switzerland, and the United Kingdom), and Asia (China and Japan) during August and September 2024 to learn about their concerns and priorities. Their report focuses on trends and actions deemed ‘significant’ or ‘very important’ by survey respondents and was supplemented with insights from interviews with three company executives to help contextualise the survey’s generally positive optimism. Four overarching themes emerged: digital transformation, R&D portfolio strategies, preparation for business volatility and changing customer expectations.
Digital transformation is likely to drive more change in 2025
Driven by advancements in cloud computing and GenAI, digital transformation continues as a key trend impacting LS strategies in 2025. Survey respondents recognised the substantial value of these technologies with nearly 60 per cent planning to increase GenAI investments across the value chain, moving beyond initial pilot projects and beginning to realise substantial value from adopting technologies at scale. Previous Deloitte analysis predicts that a top ten biopharma company (average revenue of US$65-75 billion) could unlock US$5-7 billion of peak value by scaling the use of AI over five years with some 90 per cent of value coming from three functional areas: R&D (30-45 per cent), manufacturing and supply chain (15-25 per cent) and commercial 25-35 per cent). GenAI, in particular, has the potential to revolutionise R&D, streamline operations, enhance customer service, and boost productivity.1
Likewise, GenAI could enable Medtech companies to achieve cost efficiencies of 6-12 per cent of their total revenue in the next two to three years. For a Medtech company with US$20-$26 billion in revenues, this equates to an estimated US$1.2-3.2 billion savings.2
However, realising this potential requires LS leaders to prioritise strategic issues that might benefit most from GenAI, and clearly define and communicate these issues and ensure the necessary infrastructure is in place. One interviewee noted that ‘companies should develop a prioritisation framework and manage digital investments as a portfolio, like R&D pipelines are managed’.
R&D and portfolio strategies could help mitigate competitive pressures
Executives identified pricing and access to drugs and medical devices as the most significant issue facing the industry (47 per cent of respondents expect significant impact and 49 per cent moderate impact on their strategies in 2025). Competition from generics and the looming patent cliff adds to these pressures with loss of exclusivity putting more than US$300 billion in sales at risk through to 2030. This is likely to fuel a surge in mergers and acquisition (M&A) with 77 per cent of survey respondents expecting M&A to increase in 2025 as companies seek to fill their pipeline gaps.
Innovation is key to navigating these issues; however, many companies currently pursue similar therapeutic areas and mechanisms of action, with increased competition having a negative impact on market share and margins. Interestingly, the success of GLP-1 receptor agonists in treating obesity and other common conditions is revitalising interest in general medicines, potentially shifting the industry's focus after years of prioritising specialty and rare diseases. R&D will continue to be a major focus in 2025, with companies exploring diverse approaches to drive innovation and maintain a competitive edge including:
- Rethinking R&D strategies: Declining R&D productivity has led to some companies integrating digital twins and AI in clinical development to accelerate timelines and improve success rates. In evaluating their portfolio strategies, companies are prioritising groundbreaking therapies such as cell and gene therapies and CRISPR technology over ‘me-too’ drugs (32 per cent). Additionally, 30 per cent of Medtech respondents would consider new modalities and platforms, and 24 per cent the development of Class III devices over Class II or I devices.
- Ensuring acquisitions align with corporate strategies: M&A enable LS companies to fuel innovation and address portfolio gaps, particularly with patent expirations. However, the success of acquisitions hinges on the ability to effectively align therapeutic expertise with commercial capabilities. While some companies have demonstrated successful integrations, factors such as clinical trial uncertainties, integration challenges, and strategic misalignment have hindered others.
- Strengthening real-world and multimodal data capabilities: While 56 per cent of respondents say their companies are prioritising real-world evidence (RWE) and multimodal data capabilities, only 21 per cent view it as a ‘very important priority’. This suggests many companies lack the necessary infrastructure and expertise to effectively gather, standardise, and analyse data from multiple sources. Building these capabilities will be crucial for leveraging the full potential of RWE in decision-making in 2025.
Life sciences firms brace for business volatility in 2025
Despite overall optimism, LS executives expect challenges and business volatility in 2025. Over a third of respondents expressed concern about regulatory changes, both in the US (the Inflations Reduction Act) and globally, with implications for areas such as software as a medical device and clinical trial regulation. Additionally, companies are closely monitoring unpredictable challenges like inflation, economic recession, and supply chain disruption. Scenario planning and a focus on resilience, agility, and strategic foresight are crucial tools for navigating this uncertain landscape. Key approaches include:
- Fortifying supply chains: microchip shortages, geopolitical conflicts, and severe weather can negatively impact supply chains; with 37 per cent of respondents identifying building resilient and adaptable supply chains as a top priority for 2025. Some 48 per cent of Medtech respondents, and 30 per cent of biopharma respondents considered manufacturing and supply chain risks could significantly impact their 2025 strategy.
- Optimising operating models and reducing costs: faced with rising development costs, nearly 60 per cent of respondents prioritised optimising operating models as a priority for 2025. While 2024 saw companies restructuring, offshoring, and outsourcing to reduce costs, in 2025 companies are expected to turn to GenAI and other emerging technologies to improve efficiency.
- Strengthening supply chain: cyberattacks pose significant risks to LS business continuity and achieving strategic objectives, with 67 per cent of respondents rating cybersecurity investments as ‘very important’ or ‘important’.
- Preparing for new climate and sustainability reporting requirements: 83 per cent of non-US respondents said the European Union's Corporate Sustainability Reporting Directive, and other policy changes will have a ‘significant to moderate’ impact on their 2025 strategies; 77 per cent of US respondents anticipate more regulatory emphasis on sustainability in 2025. However, until financial markets see sustainability as an investment not a cost, sustainability is likely to remain primarily a compliance issue.3
Evolving customer expectations could influence strategies in 2025
Evolving customer preferences and expectations are likely to significantly shape strategies in 2025 as LS companies, health systems and healthcare professional (HCP) needs, incentives and expectation diverge. Thirty-six per cent of executives indicated that improving customer experience, engagement, and trust was ‘very important’ and 29 per cent were prioritising investments in a customer-engagement strategy.
While LS companies are increasingly using digital technologies to personalise customer interactions, only a third of HCPs say biopharma are meeting their needs. Meanwhile some consumers are turning to GenAI to make decisions about their care and becoming more selective about their HCPs, increasingly expecting personalisation and frictionless access to products and services.4 In response, LS companies are developing direct-to-consumer programmes with 54 per cent of biopharma respondents looking to simplify enrolment in patient-support programmes (PSPs) but only 26 per cent of Medtech respondents sharing this focus. However, 52 per cent of biopharma and 44 per cent Medtech respondents said they plan to customise PSPs or care journeys based on consumer needs and offer consumers more personalised insights.
Preparing for future growth and innovation
The LS industry is transforming, fuelled by digital advancements, scientific breakthroughs, and a commitment to patient-centric innovation. Despite existing challenges, industry leaders remain optimistic, particularly about the potential of personalised medicine to deliver more effective and targeted therapies. The integration of technologies like GenAI and the strategic use of data are expected to drive both operational efficiency and groundbreaking innovations. Meanwhile, LS executives are focused on adapting, creating value, enhancing digital capabilities, and growing despite competitive pressure, business volatility, and changing customer needs. As the industry evolves, companies that can effectively adapt and implement new initiatives will be best positioned for success in the increasingly dynamic landscape.
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1 us-realizing-transformative-value-from-ai-and-genAI-in-life-sciences-040924.pdf
2 LSHC_9709314_AIainMedtech_POV_FINAL_101124
3 ESG Readiness in Life Sciences and Health Care | Deloitte US
4 2025 Outlook for US Life Sciences and Health Care | Deloitte US
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