#FutureReadyHealthcare
23 Jun 2025
Summary
The global life sciences industry, which is a significant part of the broader healthcare ecosystem, grew to approximately $1.9 trillion in total sales in 2024. Of this, pharmaceuticals accounted for nearly 70% of the market and medical devices contributed around $600 billion. Geographically, North America and Europe continue to dominate, comprising 55% and 25% of global sales, respectively. Simply put, these two regions jointly account for 80% of global revenue. And this, in turn, shapes the strategic focus, operational efforts, and revenue distribution of life sciences service providers worldwide.
At $1.9T, Life Sciences is a core component of the global healthcare ecosystem, with Pharma comprising ~70% of the market
Growth Drivers
Key therapeutic areas - especially oncology, immunology, diabetes, and obesity - are expected to drive growth through 2028. It is estimated that oncology alone could reach $450 billion, while obesity is growing rapidly at a 24–27% CAGR. Industry investment remains strong across sales, medical affairs, and R&D.
Despite challenges such as pricing pressures, regulatory uncertainty, and the upcoming loss of exclusivity (LoE) for several blockbuster drugs, including Keytruda and Darzalex, the industry is well-positioned for continued growth. The pharmaceutical sector is expected to grow at a 6-7% CAGR in the coming years. Factors such as an ageing population, increasing prevalence of chronic diseases, and advances in emerging therapeutic modalities are helping offset the expected $200 billion revenue impact from upcoming patent expirations.
Prioritizing Innovation
The U.S. Food and Drug Administration (FDA) approved 50 new drugs in 2024 alone. The FDA is expected to approve around 70 in 2025. The current global pipeline includes more than 20,000 drug development programs, with 17% in Phase 1, 16% in Phase 2, and 6% in Phase 3. Among the 69 new active substances (NAS) in advanced development, oncology and immunology remain dominant areas of focus. Roughly 20% of the top 20 global pharmaceutical companies’ pipelines are already in late-stage development, signalling strong future topline potential.
Merger and acquisition (M&A) activity remained subdued in 2024, totalling around $48 billion. However, deal-making is expected to pick up in 2025, albeit with a cautious approach. Most future buyout targets are anticipated to be in Phase 2 or later stages, reflecting a strategic focus on reducing clinical risk. Historically, 60% of large pharmaceutical companies’ key products have emerged from licensing deals or acquisitions of smaller biotech firms. Acquisitions remain central to innovation, with oncology, immunology, central nervous system disorders (CNS), and rare diseases continuing to be the most active therapeutic areas for M&A.
Digital and AI-Led Transformation
Digital transformation has become a defining theme for the industry post-COVID-19. Life sciences companies are moving beyond experimentation to scale technologies that enhance both efficiency and innovation. AI-powered drug discovery, decentralized clinical trials, digital-first patient engagement, hybrid omnichannel sales strategies, and data-driven operations are now mainstream priorities. Generative AI (GenAI) alone is projected to deliver $53 to $95 billion in annual value across the pharmaceutical value chain. Despite this potential, only 22% of life sciences leaders report having scaled such technologies, highlighting significant room for growth and adoption.
The life sciences IT market is also expanding, with total spending around $40 billion, of which approximately $12 billion is outsourced. In parallel, companies are increasingly investing in Global Capability Centers (GCCs) not just for cost efficiency, but more as engines of innovation. These GCCs are evolving from traditional support hubs into strategic centers for global commercialization, R&D, and analytics.
Future Outlook
In summary, the life sciences industry in 2025 is navigating a landscape shaped by strong innovation pipelines, favorable global health trends, and an accelerating shift toward digital and data-driven operations. While headwinds such as patent expirations and policy pressures persist, the industry's adaptability, backed by robust investment and scientific progress, positions it well for sustainable long-term growth.
