The year 2025 is set top be a pivotal one for the biopharma industry, marked by significant political changes in the US and beyond.
Around half the world’s population live in countries that held national elections in 2024, which was also a year of worsening global conflict.
This has created a complex global landscape for biopharma companies to navigate at a time when big pharma is feeling the pressure to replace revenues from blockbuster drugs facing patent expiries, and biotech is reeling from cuts after a tough couple of years for financing.
Among the investors and healthcare corporate representatives surveyed by Jefferies for its latest Healthcare Temperature Check, geopolitical risk emerged as the greatest perceived risk for the sector, with the proportion of respondents highlighting it as their biggest concern rising to 40% from 26% a year earlier (funding and pricing cuts were in second place at 36%).
With Donald Trump’s return as US president, industry leaders are preparing for potential disruptions and opportunities that may arise from new policies and regulatory shifts. Despite these challenges, there is a sense of optimism among the industry experts who shared their predictions for Scrip Asks. The prevailing view was that the sector would remain resilient and continue to innovate in the face of political uncertainty.
Uncertainty
Perhaps the most closely watched election for the pharma industry was that of the US, its most lucrative market, and this was reflected in the predictions shared by pharma leaders.
“The next four years should be very dynamic for biopharma. Inevitable changes within the Department of Health and Human Services (HHS) could bring both opportunities and challenges for different sectors,” commented Dan Yerace, director and vice president of operations at cell and gene therapy company Coeptis Therapeutics.
One distinguishing feature of Trump’s previous administration was his unpredictability, which is likely to add to the potential for upheaval that could be expected with any political switch.
This was flagged up by London-based partner of global law firm Cooley Frances Stocks Allen: “Looking ahead it is hard to predict the overall impact of the incoming Trump administration and what Robert F. Kennedy Jr.’s appointment will mean for FDA and the global biotech and pharma markets. Having had a quick and conclusive election result, and an appointment of any kind, reduces uncertainty but, given the administration’s emphasis on disruption, it is hard not to expect movements which will both create opportunity and change,” she said. “As ever in a paradigm of uncertainty, those companies best able to be nimble and respond quickly to opportunity are the most likely to take advantage of those developments.”
As ever in a paradigm of uncertainty, those companies best able to be nimble and respond quickly to opportunity are the most likely to take advantage of those developments.
Frances Stocks Allen, Cooley
Bill Coyle, principal (global head of biopharma) at consultancy ZS, also emphasized the need for companies to react effectively to change. “Against the backdrop of biopharma innovation this year, uncertainty will be high in 2025 with the incoming Trump administration set to potentially disrupt pharma and healthcare more generally. Government savings targets combined with anti-pharma rhetoric are sure to result in the need for biopharma companies to quickly understand and evaluate the impact of policy ideas that appear with little notice and could have significant implications.
Optimism
“We live in politically turbulent and uncertain times: in the past few weeks, I have read in reliable newspapers that the new Trump presidency will either be very good or very bad for pharma (a view that depends very largely on whether you supported him or not during the Presidential election),” commented Simon Kerry, CEO of UK drug discovery company Curve Therapeutics and newly elected director to the board of the UK BioIndustry Association (BIA). “I predict, however, that the world will not end in the next four or five years: there will be decisions made by politicians that may affect our sector for good or bad, but the fundamentals of the biotech industry remain strong and, I believe, the sector will remain resilient in the face of any occasional headwinds.”
He added that following the election of UK Prime Minister Keir Starmer in July 2024, “here in the UK, the BIA is working hard to make sure that we are front and centre of the new government’s mind and has already been successful in retaining the R&D tax credit at its current levels.”
Gene Mack, CEO of Gain Therapeutics, shared Kerry’s general optimism about the sector despite political changes.
“While investors have expressed concerns about President-elect Trump’s appointment of Robert F. Kennedy Jr. as HHS Secretary and RFK’s stated intentions to address pharmaceutical industry practices, I remain optimistic about the CNS [central nervous system] space in the coming year,” Mack said. “The development of life-changing medicines continues to receive broad support across government and public and private sectors.”
Arda Ural, life sciences leader at EY Americas, also took a broadly positive view: “With key uncertainties around the direction of Fed rate cuts and the US elections that will normalize the FTC [Federal Trade Commission] oversight now behind us, the sentiment for dealmaking is turning positive. In parallel, the industry is in an acute need to inorganically replace $300bn in revenue lost due to ongoing patent expirations through 2028.” He added: “We expect the financing environment for biotechs to improve and a return of the IPO [initial public offering] activity which strongly correlates with lower Fed rates based on historical trends.”
A more business-friendly policy environment focused on innovation should generally lead to increased capital raises and overall optimism within the industry.
Dan Yerace, Coeptis Therapeutics
And for Coeptis Therapeutics’ Dan Yerace, “a more business-friendly policy environment focused on innovation should generally lead to increased capital raises and overall optimism within the industry.”
Pessimism
Andy Smith, Scrip’s regular Stock Watch columnist, took a dimmer view of the outlook for pharma, however.
“After the US election in November and the resulting swathe of nominees for posts that will impact biopharma in 2024, it could be said that the writing is already on the wall for biopharma in 2025, and it does not read well,” he said. “Many will point to the nominations of the head of the Federal Trade Commission and an FTC Commissioner as an indication that the sluggish rate of M&A transactions in 2024 will reverse [Republic Andrew Ferguson, already one of the antitrust regulator’s five commissioners, has been nominated as chair by President-elect Trump, replacing Lina Kahn, whose regime saw robust enforcement. Trump also nominated Mark Meador, another conservative, as commissioner.]. The new appointees to the FTC already have their priorities in 2025 with the existing objects of their ire – big tech companies’ influence on social media. But if biotech investors and others are expecting a new golden age of acquisitions by big pharma, they are again likely to be disappointed because the same reasons that have prevented many transactions in 2024 will not have changed in 2025. To put it another way, you can lead a horse to a transaction with relaxed enforcement, but you cannot make it drink expensive, unproven and uncompetitive water.”
You can lead a horse to a transaction with relaxed enforcement, but you cannot make it drink expensive, unproven and uncompetitive water.
Andy Smith, Stock Watch Columnist
R&D
In light of the US election result, “shifts in the allocation of federal research funding are likely to impact smaller companies, startups, and universities alike,” observed Coeptis Therapeutics’ Dan Yerace.
Doug McConnell, CEO of blood cell manufacturing technology developer Safi Biotherapeutics, foresaw continued US government support for health research, however, with geopolitical conflict potentially boosting investment. “Considering the ongoing global geopolitical challenges, including warfare, and an incoming US administration working alongside leaders from the private sector in an unprecedented way to evaluate priorities and solutions, I would anticipate even closer partnership between the private and government sectors to identify, fund and advance scientific innovations with the potential to become breakthrough products with broad benefits for the health of both citizens and military personnel,” he said.
I would anticipate even closer partnership between the private and government sectors to identify, fund and advance scientific innovations with the potential to become breakthrough products with broad benefits for the health of both citizens and military personnel.
Doug McConnell, Safi Biotherapeutics
“I’ve learned firsthand, from our longstanding partnership with the Department of Defense to produce stem-cell derived human red blood cells for civilian and military transfusion needs, that when you bring workable innovations forward, the government can be a powerful catalyst for advancement,” McConnell continued. “I see 2025 as a time of significant advancement of novel cellular therapeutics that bridge scientific innovation with our national priorities.”
Meanwhile, political changes in the US and beyond could create opportunities in Europe, suggested James Sheppard, international head of asset management at Kadans Science Partner, which operates laboratory and office buildings for innovative sectors in Europe.
“The outcome of the US elections and subsequent appointments to Trump’s health administration may have put many in the UK and Europe on edge, but the markets are trending upwards and, despite a recent dip in vaccine stocks which quickly rebounded, the outlook for life sciences is positive. The UK and Europe should cement its position as a leader,” said Sheppard.
“In a record election year, instead of just reacting to political change in the US we should grasp the opportunities associated with our own new administrations and forge ahead. Rather than being nervous, we should aim to capitalize on any opportunities afforded by the Trump administration and provide a safe haven for vaccine firms, encouraging them to invest in R&D infrastructure and facilities on this side of the pond and support their growth and development,” he said, alluding to the incoming US Health Secretary’s skepticism around vaccination.
Access To Medicines
Harlan Levine, president, health innovation and policy at US cancer organization City of Hope, thought that patients could benefit from fresh eyes on oncology treatment policy.
“With a new administration in Washington, policymakers will take the opportunity to look beyond the Cancer Moonshot when thinking about how policy can help save the lives of cancer patients,” he said. “I anticipate that investment in cancer research will still be a federal priority, but, given the growing consensus that a large share of cancer patients are not currently benefiting from the most recent advances, that we’ll also see greater emphasis on ensuring people have access to the latest cures.”
For Levine, “This should include looking at insurance coverage processes and network adequacy requirements so patients have timely access to specialty cancer care in-network, bolstering and incentivizing relationships between academic and community oncologists, and rethinking ‘value’ in cancer care so outcomes are prioritized alongside cost savings.”
I anticipate that investment in cancer research will still be a federal priority, but, given the growing consensus that a large share of cancer patients are not currently benefiting from the most recent advances, that we’ll also see greater emphasis on ensuring people have access to the latest cures.
Harlan Levine, City of Hope
Joy Duemke, North America director of marketing at Terumo Blood & Cell Technologies, also raised the potential for policies to improve patient access to treatment. “In 2025, the biopharma industry approaches a transformative period with a unified government and emerging policy opportunities. The expanding pipeline of cancer and rare disease treatments highlights a critical need for matched blood products and specialized care infrastructure,” she said.
Duemke warned that “as healthcare struggles to keep pace with innovative therapies, there’s growing emphasis on developing incentives to support rare condition treatments and their essential raw materials, particularly blood products. Challenges in patient care – including out-of-state travel for cell and gene therapies – underscore the importance of creating more accessible treatment pathways.”
But she expressed optimism on this front: “The coming year is poised to bring focused strategies that address these gaps, potentially revolutionizing how complex medical treatments are developed, supported, and delivered.”
Trade Wars
EY’s Arda Ural flagged up protectionist polices as an area of risk. “Implications of tariffs and the BIOSECURE Act* need to be watched out closely because of their broad impact on supply chain and tax,” he warned.
“As the BIOSECURE Act passed through the House and will soon enter the Senate for discussion*, major industry players have made billion-dollar investments into onshore manufacturing in 2024, and small and medium-sized companies will work to follow suit in 2025,” commented Sheena Dempsey, CEO of life sciences professional services firm CAI. “Amidst this shift/reliance to US-based CDMOs [contract development and manufacturing organizations] and manufacturing, companies will face vast increases in raw material and manufacturing costs and regulatory oversight.”
Andy Smith agreed. “The bigger elephants in the room for biopharma in 2025 are trade and currency wars. The president-elect is planning a 10% universal import tariff and a 60% duty on Chinese imports. Those who have not worked in, or with colleagues in, worldwide manufacturing and supply underestimate the volume of active pharmaceutical ingredients and excipients that are manufactured outside and imported into the US, most commonly from the lowest-cost suppliers in China and India. The imposition of extra tariffs and duties will increase the cost of drugs in the US,” he said. “We may get a hint of this impact from full-year 2024 earnings season in January 2025 when – like the overordering by drug wholesalers, hospitals and patients ahead of the pandemic in the first quarter of 2020 – overstocking orders may be again reflected in results. While Lilly has announced a $3bn expansion to its Wisconsin manufacturing facility and Amgen a $1bn primary manufacturing plant in North Carolina, this onshoring is unlikely to have an impact in 2025.”
Companies will face vast increases in raw material and manufacturing costs and regulatory oversight.
Sheena Dempsey, CAI
Smith went on: “As the world’s second biggest market, China’s weak and stuttering economy had a negative impact on pharma and biotech companies that marketed their products there in 2024. GSK’s reduced expectations for its shingles vaccine Shingrix in China was one example. This is likely to get worse in 2025 if exports to the US are hit by tariffs that increase finished drug prices and perhaps reduce demand in the short-term. In the long-term, the objective would be for more onshore API manufacture and much lower demand for Chinese manufactured APIs (if onshoring results in API pricing as cheap as sourcing them from China or India).
“But compounding this, lower interest rates in Europe and the US have weakened their currencies and this will decrease the value of China’s exports,” he noted.
“In an attempt to counter US tariffs, China has already shifted its policy to weaken the yuan but that may rattle the incoming US president even further since he has been vocal on the unfair advantages that some countries have in being able to depress the value of their currencies.
“If more yuan weakening to offset lower western interest rates translates into higher sales of drugs in US dollar terms for exporters to the US, but tariffs lower sales inside the US because of higher costs and affordability issues, further central bank currency weakening could result in currency wars. All this made me wonder if Sanofi was having second thoughts on its recently announced €1bn investment in an insulin manufacturing base in China.
“If things get really nasty in a trade war between the US and China, expect more actions like the investigations into AstraZeneca’s marketing practices in China, Nvidia’s suspected violations of China’s anti-monopoly laws and the requirement for TikTok’s Chinese parent to divest the company or face a ban [in the US]. Trade and currency wars could get bad tempered in 2025,” Smith warned.
*predictions were provided in early December, since when the BIOSECURE Act was delayed from enactment.
