Innovation, Growth (and Happiness) Projected for Pharma

By Katie Anderson, Chief Editor, Pharmaceutical Online

The pharmaceutical industry has experienced a year of change, reorganization, and a bit uncertainty, but the outlook remains positive, according to CRB’s Horizons: Life Sciences 2025 report. Not only is investment increasing in pharma, but innovation is propelling growth in multiple drug segments, and the people supporting this growth and innovation remain happy.

Investment Continues Despite Tariffs

It would appear that tariffs have had their intended effect based on the study’s findings. Tariffs have been implemented on pharmaceuticals imported into the United States, prompting large pharmaceutical companies to invest in U.S. facilities. While 29% of the companies polled are accelerating their investment in the U.S., 50% of large companies are reporting accelerated investment.

I ran into Peter Walters from CRB at the 2025 ISPE Annual Meeting & Expo, who shared his insights into the report findings. “Large pharma is accelerating U.S. investments and around the world. Small pharma does not have the flexibility to wait and see, but they are moving forward with the nervousness that they are investing in the world’s most expensive R&D labs,” explained Walters.

Announcements in U.S. investments are a combination of pre-existing projects with new projects. “We are seeing large pharma invest in new facilities. They are taking already strategized growth within their organization and rebranding it as U.S. onshoring, which was planned already but not purely in response to the tariff situation, noted Walters.

Outside of the U.S., tariffs have propelled 14% of companies to invest, with manufacturers trying to assess tariffs and decide what to make where. While 58% of companies are not changing investments because of tariffs, that number rises to 73% for startups. Interestingly, it appears the sweet spot to be in right now is mid-size pharmaceutical companies, who seem less impacted by U.S. government changes and reduced U.S. R&D capabilities. Unsurprisingly, much of this investment is going to cGMP manufacturing growth in North America, with R&D taking a back seat. On a global scale, growth is expected to be the highest in Asia, particularly in China. Second to that, the study found investment is expected to grow in Europe.

As previously noted, although R&D is expected to grow in global markets such as Asia, the U.S. market is bracing for an anticipated slowdown in research and development funding. This is due to a budget cut in the National Institutes of Health as well as well as grants already awarded. Couple this with the reduced staff at the U.S. Food and Drug Administration (FDA), and the industry may also be poised for a negative impact on  new drug applications and investigational new drug applications. To counteract this reduction in staff at the FDA but keep projects on track, many manufacturers and consultancies will need to add the expertise that they previously received from the FDA.

5 Drug Categories Driving Growth

Growth will continue in drug development, but it isn’t all new therapies, according to the CRB report. In fact, the report found that while new therapies are being developed in conjugated drugs, genetics and cellular medicine, small molecule and therapeutic proteins are also being reimagined.

Similarly in manufacturing, most of the growth is expected in cell and gene therapies, therapeutic proteins, conjugated drugs, small molecule and peptides.

Delving into these five categories a bit more, cell therapies are expanding into autoimmune, inflammatory, and rare disease indications, but commercialization remains to be an ongoing challenge. Commercialization challenges also persist in gene therapies, where safety and pricing are also concerns. However, the gene therapy category is experiencing innovation at speeds not matched by other categories, suggesting remedies to current challenges are not far ahead.

“There is definitely a growth in cell and gene therapies. There are difficulties in commercialization in both of those, but I think that is a milestone that will be crossed,” commented Walters.

Therapeutic proteins show the highest levels of pipeline momentum, with large companies dominating the landscape. Many of these companies are increasing their pipelines with the help of antibody-drug conjugates (ADCs) and process intensification.  Specifically, when it comes to ADCs, a commercial surge is expected with more in development than in production. Unsurprisingly, due to their link between therapeutic proteins and small molecules, the growth of these three intersecting modalities is aligned moving forward.

Last, but certainly not least, small molecule still dominates the market with 60% of drug sales. The majority of small molecule drugs are being produced outside of the U.S. and Europe, and the market is dominated by large companies. Small molecules are experiencing a renewal similar to therapeutic proteins, with conjugate drugs being an example of a reimagined segment.

Innovation in The Process

With demand increasing, but alongside it pressure to reduce prices, increase sustainability, and be more flexible, the industry is making great strides in process innovation. Those surveyed identified the construction of a new facility as the ideal time to innovate in process or equipment. Interestingly, when constructing a new facility, it was capital cost (70%) that was the chief consideration, followed by project schedule (32%), flexibility (26%), process innovation (23%), equipment/facility design (23%), standardized design (22%,) and sustainability (7%).

Plans to standardize facilities differ based on company size, according to the report, though more than half of all respondents do not have a standardization plan. Large companies had the most standardization (40%), with 31% having plans for implementation. When it came to small companies, only 14% had standardization, with 26% having a plan, and 60% having no plan at all. Mid-size companies were in the middle with 23% having standardization and 43% having a plan. Chief among the reasons for not having implemented the plan were funding/resource constraints, and manufacturing operations design and production space design were the most common types of standardization pursued.

Process intensification is happening in many of the companies surveyed, with high throughput intensification and continuous manufacturing as examples.

“Companies are trying to get more efficient with how they do drug production. For biologics, the avenue for that is really driven around intensification. How do you get higher productivity out of your equipment and out of your facilities, while maximizing the use of your footprint and your overhead costs as much as possible,” explained Walters.

Notably, most of the companies surveyed either had process intensification implemented or had it planned for the next 1-3 years. Of the most popular process intensification strategies, continuous manufacturing, large cell culture initial inoculation, production perfusion and multi-column chromatography led the pack.

Walters added, “It is difficult to make a casual move over to continuous. Companies have been a bit hesitant, but at an R&D level, they are surging forward. Especially at large pharma, the vast majority are imagining getting to fully continuous processing in the next five years,” noted Walters.

Happy in Their Work

Where would the life science industry be without its people? The CRB study looked to see if those ensuring the future of pharma are happy, and the answer is yes (well, mostly).

Overall, respondents in life sciences are happy in their careers, with 75% responding that they are happy. Making a difference in the lives of patients was the greatest motivator for a career in life sciences (60%), followed by the intellectual challenge (57%), stability (42%), and opportunities for advancement (41%).

"People working in the life science community on a whole are very happy with what they are doing, much more than other industries. A lot of that has to do with connecting at a core level to the mission and the vision of bringing drug products to the market to save lives. People connect very deeply to the modalities that they are making," furthered Walters.

When viewed by age category, those early in their career are motivated by professional growth, whereas those in the middle of their career are motivated by making a meaningful impact and those near retirement are motivated by the intellectual challenge.

Looking more specifically at work environments that keep employees happy, more than 85% noted that remote or hybrid work were of value to them. This was closely followed by professional development, wellness policy, healthy amenities, informal space and an exercise space.  Falling below 70% were rest spaces, mindfulness spaces, WELL-certified building and LEED-certified buildings. Specifically with wellness policy, respondents valued programs that contributed to their emotional well-being such as mental health days, flexible start times and counseling services. These well-being environments must also consider design, with natural light, access to outdoor spaces, and non-work areas to connect and recharge.

The Future Is Bright

Walters has a positive outlook when it comes to the future of pharma. He believes innovation and growth will continue to flourish, driven by those who find purpose in their cause.