- Leading European life sciences companies expect positive business development in 2025 and 2026
- Impact of U.S. tariffs still unclear; companies benefit from early purchases in the short term
- Reflection against will: Domestic markets back in focus despite location disadvantages - investments in R&D and other areas are being expanded, rising demand from an ageing population promises growth in the medium term
- Cost optimization, organizational adjustments and AI implementation lead the management agenda
Despite US tariffs, board and management members of leading European pharmaceutical and biotechnology companies remain positive about the future. For the current year, two thirds of the CxOs surveyed expect a growth in earnings of over five percent, and the same for 2026. These are findings of the study "Life Sciences Executives Flash Report" by management consultancy Horváth. "Global demand for pharmaceutical and biotech products made in Germany or Europe is expected to increase slightly. Given the prospect of imminent US tariffs on pharmaceutical products, we can expect that temporary purchases will be brought forward in the form of stockpiling, although there are of course limits to this in terms of shelf life," says Philipp Temmel, head of the study and Head of Chemicals & Life Sciences at Horváth. "However, it is not yet possible to predict how the dynamics will develop after this short-term 'window of opportunity' following the introduction of tariffs, and companies will most likely have to consider alternative markets again. The European market, and Germany in particular, is seen as a new growth market in some areas in the medium term, as the demand for medicines and certain therapies, such as neurodegenerative or rheumatic diseases, will increase due to the ageing population," says Temmel.
Return to the core EU market - despite locational disadvantages
The companies surveyed in the study stated that they intend to invest more in their European sites again. For example, two-thirds plan to increase regional R&D investments this year. The rather involuntary return to Europe is not without risks and efforts. 73% complain of major disadvantages due to high personnel costs and regulation in Europe. "Structural relief through political decisions, as initiated in Germany, is of course very welcome by companies - but they are not yet calculating any effects for this year, as they are still too uncertain," says Temmel. "Companies are responding to the challenging conditions with a strong focus on cost optimization, increased efficiency and structural adjustments, which are primarily made possible by digitalization and AI in particular. Above all, administrative costs are being reduced, creating financial leeway for M&A and licensing - 53% see significant business potential here - as well as for research and development."
Stable to growing headcount - despite the use of AI
When asked about the management agenda for 2025, cost optimization is the most frequently cited topic and therefore ranks first, followed by organizational restructuring to increase efficiency. "The far-reaching transformations are not yet complete," says Temmel. According to the CxOs surveyed, the biggest market shifts will result from the disruptions caused by digitalization and AI. Seven out of ten respondents state that AI innovations will significantly change the business model, for example in the area of identifying biological targets in research ("target ID in research") or in patient recruitment for clinical trials. This also explains why "strategic adaptation of the business model" is the fourth most important management issue. Increasing digitalization has hardly had any impact on staffing levels in the life sciences sector, at least not in the current year. On the contrary: 39% of companies expect their headcount to increase over the course of the year, half expect headcount to remain stable, and only eleven percent expect to reduce headcount. "There is already a shortage of skilled workers in the pharmaceutical industry, and the necessary transformations will require even more specialized employees," says Temmel
About the study
For the "Life Sciences Executives Flash Report" study, more than 30 board and senior management members of market-leading European pharmaceutical and biotech companies were interviewed in-depth about their business outlook and strategic priorities. The sample is representative of the industry. The interviews were conducted in the first quarter of 2025 and the analysis was carried out in April 2025.