How 2025 can be a pivotal year of progress for pharma

The dawn of 2025 marks a pivotal moment in the pharmaceutical industry, providing great opportunities and significant challenges. While we face obstacles such as looming patent cliffs, research and development (R&D) budget pressures and shifting product landscapes, I am optimistic that we can seize opportunities to achieve breakthroughs driven by new technologies and bring lifesaving treatments to patients faster than ever.

Four key areas related to how 2025 can be a pivotal year of progress for pharma include: breakthrough innovations shaped by AI, patient engagement, strategic activity and partnerships and managing industry headwinds.

By 2025, it is estimated that 30% of new drugs will be discovered using AI – a win for biopharma companies and patients alike. In fact, AI has been shown to reduce drug discovery timelines and costs by 25-50% in preclinical stages. As a result, we can identify successful therapies earlier and shift resources from those unlikely to succeed. AI is not just another tool for data analysis; it holds the potential to completely transform the drug discovery and development process by identifying potential drug candidates and understanding efficacy. We are moving towards an era of personalized treatment which will be greatly facilitated by AI. Personalized treatments will be driven by AI, starting with clinical trials. With the support of advanced analytics, we can now identify the optimal patient group based on key data sets and biomarkers.

To accelerate innovation, it is critical to foster a culture of openness, an appetite for learning and a willingness to adopt new ways of working. We cannot simply run small pilots. We need to adopt a transversal approach that crosses the enterprise to capture true insights free from bias. Upskilling and sourcing the right talent are essential, but success also requires that people trust the data, change their decision patterns and act with urgency and speed. What we call “snackable AI” – AI used in day-to-day work – needs to be adopted at scale to improve decision-making. Data provides unemotional insights and the upside with AI is that the more you use it the better it becomes. AI will not replace employees but will augment human abilities, prioritizing both IQ and emotional intelligence (EQ).

In a post-COVID world, people are increasingly taking control of their own health. Leveraging technological innovations, patients are becoming more engaged in their wellness journeys. Online health tools enable patients to actively participate in their healthcare, enhance communication and allow for real-time symptom tracking. Wearable devices empower patients to bring aspects of healthcare into their homes, providing them with actionable data on their health at their fingertips.

Telehealth and at-home healthcare are also seeing a surge in demand. According to McKinsey, $265 billion worth of care services could shift to home settings from traditional facilities by 2025. This is a win not just for patients but also the environment – more care at home means fewer trips to healthcare facilities, reducing petrol usage and air pollution.

By embracing innovative technologies, providers can diagnose and manage diseases better, increase compliance and improve healthcare outcomes.

As 2025 approaches, we can anticipate continued collaboration and robust strategic activity. Biopharma venture funding was strong in 2024, with the second quarter of this year marking a notable milestone. Funding levels reached heights not seen since Q2 2022. Data from Q2 2024 revealed a substantial increase to $9.2 billion in funding across 215 deals, up from $7.4 billion in the last quarter, reflecting growing investor confidence in the sector.

Biopharma M&A has also been robust in 2024, and this momentum is expected to continue into 2025. Notably, M&A activity in the industry increased by more than 100% in Q1 2024 compared to Q1 2023. The large volume of M&A has the potential to reinforce pipelines, strengthen innovation with sufficient funding and accelerate time to market.

While we have witnessed great innovation and progress in the biopharma sector, it is also important to address looming headwinds.

Healthcare costs will continue to be a focus. In the US, the Centers for Medicare and Medicaid Services (CMS) is slated to select up to 15 additional Part D drugs for negotiation by 1 February 2025, up from the initial 10 drugs negotiated for 2026. One-time cures have high upfront costs but greatly offer health system savings over a patient’s lifetime. To make these treatments more accessible and affordable, we need to explore new ways to decrease costs, which may involve structural changes to healthcare pricing and distribution. We have to work together to think differently and be disruptive in our consideration of how to improve healthcare costs. That may include changes in the way key players in the health system interact in order to bring true patient benefits.

Risks will continue to emerge from pipeline setbacks, supply chain disruptions and tariffs, among other factors. To overcome these challenges, we must have flexible and adaptable processes for risk management and rapid response.

As we look ahead to 2025, the biopharma industry stands on the cusp of a transformative era. We can achieve this by breaking old patterns, moving rapidly to embrace new technologies and fostering openness and collaboration.