Life Sciences & Health Care Horizons 2025

In 2025, Life Sciences and Health Care (LS&HC) companies face rapidly evolving global and local business paradigms that create regulatory, intellectual property, transactional and contentious risks and require daily monitoring. After more than 70 national elections in 2024, the dust has not fully settled, and political shifts across the world, coupled with geopolitical uncertainty, set the tone for changes to come

Artificial Intelligence remains top of mind for LS&HC firms, as the accelerated evolution of AI and Machine Learning enables drug development, software-as-a-service, and analysis of medical images, among other use cases. Aiming to keep pace with these rapid technological developments, regulations including the EU’s AI Act, and guidance stemming from FDA’s inaugural Digital Health Advisory Committee meeting in November 2024, present unique challenges for AI developers in the LS&HC sector, including the possibility of duplicative regulations or even conflicting regulatory obligations. In contrast, in the UK, the MHRA has taken a relatively light touch and "pro-innovation" approach so far, as set out in its AI regulatory strategy. 

Policymakers continue to face a steep learning curve, and industry perspectives are vital to advance appropriate regulations that both foster innovation while protecting patients and users from the negative impacts that can come with the promise of AI. In the EU, the Product Liability Directive has taken effect, and focuses on addressing the challenges posed by digital products and other emerging technologies.

In Latin America, Europe, the Middle East, and Southeast Asia, we are seeing governments taking aggressive stances on corruption. The LS&HC industry in particular faces increasing scrutiny over bribery and corruption practices. Recent developments in False Claims Act litigation, support for patient organizations, and the integration of AI within legal and compliance departments are vital components in addressing bribery and corruption risks. In Europe in particular, key enforcement actions targeted anti-competitive practices in 2024, including pay-for-delay agreements, market disparagement, and patent abuse.

All around the globe, a shift away from fossil fuels and toward sustainable greenhouse gas emissions makes compliance with environmental, social, and governance (ESG) policies more important than ever. Recent geopolitical and economic headwinds are driving an increased focus on strengthening and transforming supply chains, including political pressure to reconfigure supply chains to ensure strategically important industries (“near shoring”). We are also seeing increased scrutiny of fair supply chains and compliance with corporate responsibility standards; a need to digitally transform to better anticipate, mitigate and document supply chain issues; a rethinking of purchasing and supply strategics due to shortage of raw materials and price increases; and industry cooperations forming a new approach to procurement.

In the EU, the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) have placed greater focus on ESG regulatory enforcement activity. In the U.S., the Drug Supply Chain Security Act (DSCSA) is beginning to be enforced, creating an electronic interoperable system that will identify and trace prescription drug distribution. In addition, new EU directives impose stricter requirements on use of genetically modified organisms (GMOs), aiming to mitigate environmental and public health risks, including the need for more detailed environmental risk assessments and authorizations.

As staff and budget cuts hit governmental agencies in the U.S., LS&HC stakeholders are intensely focused on the policy implications for global financial markets, investment strategies, and M&A and licensing opportunities. In the dealmaking space, Chinese biopharma companies are increasingly turning to licensing and collaboration deals for external financing due to a challenging fundraising environment. In Japan, we expect more strategic transactional activity (i.e., licensing and M&A) in 2025, as private equity interests grow despite the escalating risks of cross-border transactions, including geopolitical disruptions, fluctuating valuations, and regulatory uncertainties. The U.S. is also seeing increased LS&HC deal activity risks associated with antitrust regulatory uncertainty. Proactive M&A strategy is crucial, as regulatory hurdles, financial missteps, and operational disruptions can derail deals. 

The Hogan Lovells global Life Sciences and Health Care team – comprised of more than 500 lawyers around the world who support thousands of clients in the industry – stands ready to provide you with creative strategies to help you achieve and optimize promising opportunities, and integrated solutions to protect and support your business. We look forward to working with you and hope that you find our view of the horizon thought-provoking. Read more online here.

Authored by Steve Abrams, Lynn Mehler, and Jane Summerfield.