9 Challenges Facing Life Science Companies in 2025

Few industries are as demanding as life sciences, especially in the realms of biotechnology and genetic engineering. Companies in this field must be aware of and manage intense regulatory considerations and changes, and cope with research and development costs, watch over intellectual property concerns and keep pace with ever-advancing technologies. 

As they strive to confront today’s industry realities, biotech and genetic engineering organizations must take stock of the key industry pressures that could impact their success. It’s essential for organizations to evaluate where they stand with each of the following challenges and determine a course of action to help see continued progress moving forward.

Margin compression amid persistent cost pressures

Mounting pressures on profitability margins—especially amidst persistent high inflation—create an undeniable challenge in the life sciences sector. Although rates have subsided since first coming out of the COVID-19 pandemic, the current annual inflation rate continues to hover around 3%, according to the U.S. Bureau of Labor Statistics. 

The industry also continues to grapple with other unique pressures, including global supply chain challenges, escalating clinical trial costs, lengthy R&D cycles, expiring patents, elevated healthcare costs and complex regulatory landscapes.

To navigate this challenge, assume a “more with less” mentality. Adopting a leaner, efficiency-driven approach can help organizations identify ways to optimize operations and reduce costs.

Increasing talent gaps and workforce transition

Talent scarcity is an industry-wide issue: 77% of life sciences and healthcare companies report having difficulty finding the talent they need, notes ManpowerGroup. In addition, replacing retiring employees with skilled new ones was cited as the number-one workforce challenge by life sciences CEOs in a recent survey by KPMG.

This scarcity of talent can lead to increased labor rates, impacting a company’s overall cost structure and profitability, and reduced productivity. Reasons for life sciences labor shortages can include everything from aging workforces and early retirements to unskilled applicants and high demand. In fact, healthcare had the highest number of job vacancies in all sectors, according to a 2023 McKinsey study. 

To mitigate these risks, consider investing in comprehensive training programs and establishing structured knowledge-transfer initiatives to bridge the experience gap between retiring experts and younger workers. Additionally, foster a culture of continuous learning and development to attract and retain top talent.

Supply chain reconfiguration and vendor streamlining

Supply chain reconfiguration and vendor consolidation are important considerations for controlling costs and maximizing efficiencies.

Supply chain disruptions, including raw material shortfalls and logistics challenges, continue to pose risks. In a recent Deloitte survey, 48% of surveyed medtech executives and 30% of biopharma executives said supply chain and manufacturing risks could significantly impact their 2025 strategies. 

Vendor consolidation can help mitigate these risks. When evaluating vendors, prioritize economies of scale and value-adds. Use these questions to assess vendors:

• Does the vendor support your company’s business goals? 
• Do they proactively identify solutions to your unique challenges? 
• Do they provide fresh ideas that contribute to your company’s bottom line? 
• Do they provide efficiencies in relation to cost, delivery time, risk, quality, compliance, and/or sustainability?

Tariff shifts and the return to U.S. manufacturing

As the U.S. and other countries trade tariff measures, life science companies are forced to cope with lasting supply chain effects. Companies that previously relied on offshoring may now be seeking other options as global dynamics shift and tensions arise in the geopolitical supply chain.

Reshoring, which involves returning production to the original country, can provide greater operational control over operations and ensure closer alignment with regulatory standards. Nearshoring, or moving production to nearby countries, can minimize logistical challenges while also offering cost advantages compared to domestic production. Another approach, known as friendshoring, focuses on sourcing from trusted companies and/or countries with shared interests. While this strategy may not always offer as many economic advantages, it can help stabilize supply chains.

Product fragmentation and fast-moving medtech

The pharmaceutical industry is witnessing fewer “blockbuster” products. Instead, companies are pursuing more targeted precision therapies and niche technologies. These require both shorter runs and faster turnaround times, which can strain resources and challenge workflows. 

Simultaneously, medtech—wearables, AI diagnostics, and robotics—offers convenience and precision. However, medtech’s rapid innovation cycle adds another layer of complexity. Companies must be agile enough to integrate new technologies and adapt to evolving regulatory landscapes.

To succeed, prioritize agility, technology investment, regulatory navigation and patient-centricity.

The demand for personalization

When it comes to healthcare providers and patients, one size definitely does not fit all. Personalization and customization have become vital for delivering impactful messaging, tailored content and individualized services and products.

Developing a plan to increase personalization can benefit companies and patients in multiple ways. 

For patients, it can increase engagement through tools like portals, emails and apps. For healthcare providers, personalized data and insights can strengthen relationships and improve care delivery. Personalization also supports regulatory compliance by ensuring communications are tailored with accurate and legally compliant information. It helps address patient safety by providing individualized instructions, warnings and guidance. Most importantly, it improves health outcomes through condition-specific guidance, medication reminders and treatment adherence support.

Greener expectations from consumers

Consumer demand for sustainable products and packaging continues to rise, with PwC reporting that 80% of consumers are willing to pay more for sustainably sourced goods. For life sciences companies, developing and investing in sustainable solutions for products, services and facilities can help meet this demand and comply with increasingly stringent regulations.

To meet sustainability objectives, consider:

• Utilizing biodegradable and compostable materials, including paper-based solutions, for products and packaging, and limiting non-sustainable consumables
• Limiting packaging waste 
• Extending tool life cycles
• Improving energy efficiencies throughout facilities, including lighting, heating/cooling, energy monitoring, ensuring the facility is up to code and integrating renewable energy sources

Brand consistency across all touchpoints

Standardizing messaging, materials and specifications across multiple channels is critical, especially for companies currently offshoring or nearshoring production. Consistent branding serves to improve brand recognition, create trust and increase customer loyalty. Alternately, inconsistent branding can lead to a disjointed customer experience and a loss of trust.

Work to:

• Develop comprehensive brand guidelines and a clear brand identity
• Establish a dedicated brand team, overseeing brand consistency across all channels
• Leverage Digital Asset Management (DAM) and Content Management Systems (CMS)
• Utilize technology to aid in monitoring and maintaining consistency 
• Regularly train employees and vendors

Adapting to new communication channels

Driven primarily by patient and consumer demand for personalized, accessible communications, industry leaders are shifting their content delivery to more effective channels and models. 

An omnichannel approach, one that seamlessly integrates digital platforms with more traditional models, will help ensure increased response and engagement. To make the most of this strategy, companies should consider leveraging a range of platforms, including social media, websites, apps, events, podcasts, webinars and in-person consultations.

Preparing for the challenges ahead

As companies navigate 2025 and beyond, it’s imperative to take into account all of the aforementioned challenges. Staying informed, evaluating internal capabilities and exploring external insights when needed can support successful planning and sustained progress.