5 Pharma Industry Trends to Watch in 2025

In 2025, the pharmaceutical industry is rife with new opportunities — fueled by breakthroughs in technology and artificial intelligence. The global pharma market is expected to grow by 8% in 2025 with an approximate growth rate of 6% per year expected until 2027.

At the same time, the industry faces several challenges in 2025. Upcoming patent cliffs are leading to significant revenue concerns for pharmaceutical companies, with drugs representing approximately $350 billion in annual worldwide revenues set to lose exclusivity by 2030. The top 20 pharma companies account for 80% of this loss, reflecting an outsized impact on established industry players.

The political landscape in the United States is also casting uncertainty on the pharmaceutical landscape, as the current presidential administration has voiced its intention to make changes to drug pricing, vaccine policy, and dependency on other countries in the drug pipeline.

Certain trends from 2024 are persisting this year — including the influence of technology and AI, as well as the massive obesity drug boom. Overall, though, this year is shaping up to be markedly different from the last, with factors like regulatory shifts, M&A dealmaking, and drug price provisions playing much more substantial roles in the space.

Using the AlphaSense platform, we explore the key trends driving the pharmaceutical industry in 2025, as well as how you can stay ahead of new developments in this fast-changing space.

Artificial Intelligence for Drug Development and Discovery

AI has been making waves in the healthcare space for several years now, particularly for driving workflow efficiencies for providers and facilitating more comprehensive and personalized patient care. Increasingly, the focus has turned to how AI can be utilized in the drug discovery and development process.

AI can expedite drug discovery by parsing through large datasets and identifying potential drug candidates and biomarkers much faster than could be done by manual means. Within drug development, advanced algorithms can predict molecular behavior, expedite compound selection, sequencing and synthesis — ultimately leading to reduced costs, contracted timelines, and a higher probability of clinical success. 

The World Economic Forum predicts that in 2025, 30% of new drug discoveries will be driven by AI, and a recent KPMG survey has shown that 68% of pharma leaders are planning significant AI investments this year. This focus on AI can be seen from both legacy pharma companies — like Amgen — and new startups popping up that are specifically focused on AI applications in the biopharma space.

Our commitment to innovation is also evident as we deploy artificial intelligence across the value chain, including informing molecule design and discovery research, enabling faster trial enrollment and streamlining regulatory filings in clinical development, and enhancing our responsiveness to customers in commercial operations…

When it comes to artificial intelligence, we’re finding new opportunities across our business, and AI is helping us deliver innovative medicines to more patients even faster.”

– Amgen Inc., Q4 2024 Earnings Call, Feb 4, 2025

One of the new startups bringing generative AI into the pharma space is Latent Labs, which was founded by a former researcher from Google’s DeepMind. Latent Labs recently emerged from stealth with $50 million in funding, aiming to advance AI foundation models for designing therapeutic molecules like antibodies and enzymes. 

Every biotechnology or pharmaceutical company wants to be at the forefront of technology to find the best therapeutic molecules, yet not all are in a position to develop the most advanced AI models for the job. That’s where Latent Labs comes in. We push the frontiers of generative biology, giving our partners instant access to tools that accelerate their drug design programs.”

– Simon Kohl, Latent Labs CEO and Founder

Focus on Obesity Treatments

Demand for obesity drugs has skyrocketed in recent years, and their popularity has not waned in 2025. Once seen only as treatments for type 2 diabetes, GLP-1 receptor agonists like Ozempic and Mounjaro have since become much more well-known as blockbuster weight loss drugs. 

The unceasing customer demand for these drugs has driven up competition in the space, making obesity treatments one of the fastest-moving and closely watched spaces in the pharma industry. While Novo Nordisk (known for Ozempic) and Eli Lilly (known for Mounjaro) continue to hold the dominant market share, new players are consistently emerging. 

For example, Zealand Pharma is tapping into “the need for novel and alternative treatment options with different mechanisms of action other than the GLP-1-based therapies approved today.” To that end, they are working on developing a more advanced class of weight loss drugs that limits or eliminates the adverse side effects of GLP-1s, such as GI issues and muscle loss.

Oral weight loss drugs are also driving innovation and competition in the space, as these are more cost-effective for companies to produce and easier for customers to take than their injectable counterparts. Novo Nordisk and Eli Lilly have both announced their investments in oral drug development, and the latter is expected to release their late-stage trial results later this year. Meanwhile, new entrant Viking Therapeutics is establishing itself as a formidable player in the space, as it has presented promising results from early-stage clinical trials of an oral obesity treatment. 

In 2025, the obesity drug landscape is expected to become even more competitive, and biotech companies will be seeking partnerships, strategic collaborations, and deals to establish themselves in the space and diversify their obesity pipelines. 

China Licensing Deals and Patent Cliffs

In 2024, roughly a third of pharma licensing deals were for drugs that were developed and discovered in China — this is up from virtually zero a decade ago. This trend reflects two critical factors: the rising importance of the Chinese market to multinational pharmaceutical companies and the growing levels of innovation in Chinese drug research and development.

China’s drug development industry is fast-growing and has already demonstrated that it’s capable of developing assets faster and cheaper than Western companies, while maintaining at least the same level of quality. For example, Chinese company Akeso Therapeutics developed the bispecific drug ivonescimab, which was licensed by U.S.-based Summit Therapeutics, and outperformed Merck’s blockbuster drug Keytruda in a head-to-head clinical trial of non-small-cell lung cancer. Many startups are also launching now that are starting with licensing a bundle of assets from China, instead of building out a robust domestic R&D process first.

Additionally, with a growing number of pharma companies facing upcoming patent cliffs and loss of exclusivity in the next few years, licensing drugs in China appears to be an attractive strategy for mitigating the impact on their revenue streams. However, it is not yet clear how sustainable this approach to drug development will be, particularly due to uncertain political dynamics between the US and China, as well as a constantly shifting regulatory environment in China.

IRA Drug Price Provisions

The Inflation Reduction Act (IRA), enacted in 2022, is set to have significant impacts on the pharmaceutical industry in 2025, as several key provisions come into effect. These provisions include the implementation of Medicare drug price negotiations, rebates for price increases outpacing inflation, and a redesign of the Medicare Part D benefit structure. 

In particular, the IRA’s drug pricing controls and the Medicare Part D redesign are expected to have a negative effect on pharmaceutical revenue, especially for companies with products that are more reliant on Medicare reimbursement. The full impact of the IRA on the pharmaceutical industry is still uncertain, but it is likely to significantly reduce revenues and increase financial liabilities for pharma companies. As an example, pharma company Pfizer expects a net unfavorable impact to their revenue of approximately $1 billion YoY in 2025, owing to the Medicare Part D redesign changes. They predict these changes will most strongly impact their higher-priced medicines. 

Additionally, international drug pricing may come under scrutiny as industry leaders and the Trump administration consider aligning US pricing policies with other countries’. This could be particularly impactful for obesity drugs, as there is currently a huge disparity between the pricing of obesity drugs in the United States versus in other countries, with the United States charging significantly more. 

At the same time, these provisions are highly beneficial for Medicare beneficiaries who actually need to use these drugs, and the provisions increase healthcare accessibility for millions of Americans. Also, since the price negotiation process primarily targets older, high-cost drugs that lack generic or biosimilar alternatives, other pharma companies will have an opportunity to innovate and enter the market with their own alternatives. 

Strategic M&A

The outlook for M&A in the pharmaceutical industry in 2025 is cautiously optimistic after a sluggish 2024. Last year, there were no biopharma deals above $5 billion, which hadn’t happened for over a decade. This year is already off to a better start, as several large deals were announced at the JP Morgan Healthcare Conference — including J&J’s $14.6 billion acquisition of Intra-Cellular, as well as GSK’s acquisition of IDRx and Lilly’s acquisition of Scorpion Therapeutics.

A few factors are generating cautious optimism for pharma dealmaking activity this year. Looming patent cliffs are creating pressure to replenish pipelines and safeguard revenues, and M&A is an attractive solution. According to a Deloitte survey of pharma C-suite executives around the world, 77% stated that they believe M&A activity will increase this year as a result of the looming patent expirations.

Secondly, a more favorable FTC regime is expected this year, due to a new administration with a more pro-business and deregulatory approach. As antitrust risks abate, larger deals become more likely. Excitement around pharma dealmaking is expected to rise if there is a definitive drop in regulatory pressure from both the FTC and FDA.

Thirdly, large pharma companies are entering 2025 with strong balance sheets and ample dry powder. Pharma’s deal capacity has grown to an estimated $1.5 trillion globally, and forecasted financial conditions, such as declining interest rates, are also expected to create a favorable dealmaking environment. 

The main therapy areas likely to see strong interest this year are immunology and oncology, though neurology and neuropsychology are also generating buzz as there is tremendous unmet need in those fields. 

At the same time, the uncertain regulatory environment under the Trump administration and its controversial healthcare agency appointees are likely to continue to subdue M&A activity. 

Stay on Top of Pharma Industry Developments

Pharma industry trends evolve quickly, making it a full-time endeavor to decipher which ones to pursue with your attention and capital. That’s why more C-Suite executives are implementing market intelligence platforms into their operations to accelerate their research with premium content and AI. 

AlphaSense’s extensive content library aggregates business documents from over 10,000 content sources, including healthcare news, industry reports, company reports and filings, 510(k) filings, and regulatory content from sources such as PubMed, World Health Organization, MedlinePlus, and the FDA.

Our advanced AI search engine then helps you get the most value out of this content by extracting the most relevant insights for your research and filtering out the noise—through features like Generative Search, Smart Summaries, Smart Synonyms™, and sentiment analysis. 

AlphaSense helps you stay updated on regulatory information, companies, industries, and potential investments with our customizable real-time alerts, dashboards, and watchlists. Stay ahead of every new development and get the competitive edge when you use AlphaSense. 

Start your free trial today.