The pharmaceutical industry operates under relentless uncertainty, where returns are highly dispersed, and few bets deliver outsized value while many fail to realize expectations. In financial terms, running a pharma business resembles microcap investing: placing long-duration capital behind science, leadership, and durable moats, while accepting that internal execution and external shocks can unsettle even well-built theses. Fewer than one in five bets will meaningfully succeed, which means discipline matters as much as discovery. Success requires deep honesty about the circle of expertise, the courage to scale what works, the clarity to cut losses fast, and the agility to rebalance and reinvest into superior opportunities.
As we look ahead, 2025 presents a tougher setup: macroeconomic and geopolitical instability, tariffs, MFN pricing pressures, and supply disruptions layered atop rising R&D intensity and accelerating competition from nimble biotechs and China. Against this backdrop, today’s winners may not be tomorrow’s leaders. Where companies choose to play, how they launch, and how they engage patients will determine who compounds and who drifts into multiyear growth deserts.
What follows are the common threads shaping the playbook to 2035.
Where to play will be defined by unmet need, pricing power, and science that scales. Capital will increasingly concentrate in uncontested arenas with high unmet medical need and strong economics. TA’s such as oncology and immunooncology with biomarkerdriven precision, metabolic and immunology categories with resilient demand, and advanced modalities such as biologics, gene therapy, and precision platforms unlocking rare and complex diseases. At the same time, winners will exit commoditized segments like primary care and antibiotics, where stewardship constraints and generics compress margins. Therapeutic depth, supported by data, access, and durable pricing, will trump breadth for its own sake.
From breadth to conviction, pipelines will narrow to what truly moves the needle. The era of spreading R&D across too many assets is ending. Firms are reallocating toward programs with validated pharmacodynamic markers and clear healtheconomic value, emphasizing sharper proofofconcept signals and faster “kill or scale” decisions. The old model of chasing ten indications per molecule is giving way to a focus on the first one or two unlocks, where most of the value accrues. Capital is shifting from experiments in volume to conviction in outcomes, doing more with less and more with what matters.
Rotate portfolio ahead of loss of exclusivity to orchestrate seamless generational handovers. Patent cliffs will reshape portfolios as blockbusters like Revlimid, Eliquis, and Dupixent face erosion, forcing rotation toward new therapy areas and technology platforms. Some leaders have already moved. Bristol Myers Squibb has tilted more than half its business toward growth assets; Sanofi is preparing for Dupixent’s LOE; Pfizer is rebuilding beyond Comirnaty and Paxlovid, leaning on oncology, antiinfectives, and RSV. The winners will choreograph handovers across product generations with minimal drag; laggards will suffer prolonged growth gaps.
ROCE discipline will power margin expansion through pruning and focus. Companies are pushing margins by prioritizing specialty care and ruthlessly exiting noncore assets. J&J’s consumer health carveout sharpened its branded medicines focus; Sanofi shrank its footprint to double down on immunology and oncology; Novartis spun off Sandoz to become a pureplay innovator and push margins into the mid30s; GSK intensified emphasis on vaccines and specialty care. This is about quality of earnings, concentrating capital where returns compound and divesting ROCEdilutive franchises.
Launch engines will win markets—first to scale beats first to file. Pipelines do not create value on their own; launch machinery does. Lilly’s Zepbound and Mounjaro set the benchmark on scale and speed, while AstraZeneca’s multifranchise momentum with Tagrisso, Imfinzi, and Farxiga shows that breadth matters more than singleasset dependence. Cobenfy’s rapid trajectory to 2,700 TRx per week and Camzyos’ emergence as a >$1B brand underscore that only a handful of companies possess worldclass launch engines. As competition intensifies, advantage will come from omnichannel excellence, compelling HCP and patient propositions, robust support programs, and innovative delivery models that turn assets into franchises quickly.
Externalize R&D risk while internalizing excellence where it counts. Large pharma is increasingly outsourcing discovery risk to lean biotechs, accessing innovation through BD, partnerships, and optionbased structures, while keeping commercial excellence inhouse. Internal bets now skew to assets with clear promise of excellence; a capitallight approach keeps flexibility high and failure costs contained. The model balances exploration with disciplined exploitation, expanding optionality without bloating fixed cost.
China’s centrality will shift the industry from volume to velocity. China has surpassed the U.S. in clinical trial volume and is on track to become a global hub for scientific output and patient access by 2030. AstraZeneca continues to expand R&D and partnerships there, while Merck and Lilly highlight the rising quality of Chinese biotech assets entering global BD funnels. Innovation is no longer geographically privileged; China is integral to the global engine and will increasingly influence pace, scale, and cost of development.
Speed is strategy—capture lifetime value early or lose categories entirely. In oncology, immunology, and neurology, roughly 80 percent of value accrues to the first two entrants. BMS and Sanofi emphasize firstmover advantage; Lilly frames Alzheimer’s and obesity strategies around speed; AstraZeneca warns that delays erase value at a geometric rate. Slow companies do not merely surrender share but they forfeit the economics of entire categories. Execution tempo is now a core strategic variable, not a downstream operational choice.
Closer to the consumer will mean building endtoend journeys, not isolated treatments. Pharma is extending beyond treatment into pre-diagnosis, screening, diagnosis, therapy, and ongoing care, with Digital Health, D2C models, and Digital Therapeutics filling critical gaps. Not every model will fit every portfolio, but patientcentric, datarich journeys are becoming essential for access, adherence, and outcomes. The companies that integrate clinical, digital, and behavioral experiences will unlock durable engagement and realworld evidence advantages.
AI will go operational- quietly reshaping economics across the value chain. Artificial intelligence has moved from promise to productivity in discovery, trial design, and commercialization. Merck reports gains in biomarker prediction; Lilly uses AI to identify patients faster and accelerate launches in obesity and Alzheimer’s; AstraZeneca is redesigning oncology trials to shave months off timelines. By 2030, operational AI will be as fundamental as CMC, largely invisible to patients yet transformative to P&L and cycle times.
Operating leverage and productivity will become strategic weapons. The age of indulgent SG&A is ending, replaced by rigorous cost discipline that funds growth. BMS delivered $1 billion in efficiencies with more targeted for 2026–27; Sanofi significantly reduced manufacturing footprint and streamlined SKUs; Pfizer is removing over $4 billion in costs, directly linking savings to pipeline acceleration. Operating leverage, resource reallocation, and organization redesign will define competitive advantage in the years ahead.
Pharma 2035 will reward speed, focus, and conviction. The companies that choose the right arenas, concentrate capital behind validated signals, launch at velocity, and compound through disciplined rotation will not just navigate uncertainty but also will shape the next curve of global health.
