The future for UK pharmaceutical & life sciences
Whilst most sectors feel the full impact of economic fluctuations, the life sciences sector benefits from a degree of built-in resilience. Demand for medicines is far less sensitive to shifts in consumer confidence than demand for discretionary goods, giving the sector a natural buffer against recessionary pressures and global volatility. That resilience, however, does not equate to immunity; the sector is still driven by persistent margin and cost pressures, alongside a growing recognition that volatility is becoming a long-term operating condition rather than a temporary disruption. Businesses that once expected turbulence to ease are increasingly planning for continued uncertainty. Even so, confidence in the sector's underlying growth fundamentals remains strong. Drawing on our C-suite Barometer 2026 mid-year insights, 92% of C-suite executives globally express a positive outlook on growth. When speaking with our clients in the Pharma & Life Sciences sector, they echo this confidence.
C-suite Barometer 2026 mid-year insights point to economic trends, artificial intelligence and energy prices as the key factors having the biggest impact on organisations in the sector. Life sciences firms remain exposed to margin pressure throughout their supply chains, and the cost and availability of materials are prompting more rigorous thinking about sourcing strategies. Energy prices play a large part in this equation, but for many businesses in the sector they are viewed as a manageable headwind rather than a fundamental threat. While higher energy costs can erode margins and increase operating expenses, the sector has demonstrated an ability to absorb and adapt to such fluctuations over time. A similar resilience is evident in the face of inflationary pressures. Demand for medicines and healthcare products tends to remain relatively stable regardless of broader economic conditions, helping to shield the sector from some of the effects that inflation can have on more discretionary markets.
That resilience, however, is not being taken for granted. To protect margins and growth, companies are increasingly focused on strengthening their operational foundations. This is reflected in the C-suite Barometer 2026 mid-year insights, which shows that nearly half of all organisations globally across industries have diversified their resources over the past six months in response to evolving market conditions. For UK pharma and life sciences organisations, many of the same pressures are driving action. Supply chain resilience, energy efficiency and business continuity remain high on the strategic agenda as organisations look to manage costs, reduce disruption and support growth in an uncertain environment.
The defining strategic pressure is neither energy nor tariffs, but the lifecycle of the drugs themselves. As patents expire, the financial impact has grown sharper: as firms have scaled, their blockbuster drugs have become larger, so the loss when a patent comes off is more material to the bottom line than it once was. Businesses are closely watching how competitors and new market entrants respond when any patents are coming to an end.
“Firms are cutting costs, disposing of non-core assets and channelling the proceeds into R&D to protect the pipeline of future drugs. It’s the lifeblood of the industry. Investment, in other words, is not slowing so much as concentrating on the one thing that secures long-term growth.”
Nigel Layton Partner - Head of Pharma & Life Sciences
Businesses in the sector are still investing, but doing so more selectively, which echoes findings from our C-suite Barometer 2026 mid-year insights. In life sciences, that selectivity has a particular focus.
There is a clear shift in how firms back their drug candidates. Where a company might historically have supported fifteen development programmes in the hope that one or two reach market, it is now cutting the weaker candidates far earlier.
“Pharmaceutical firms are not backing fifteen horses for as long as they used to. A programme that fails to show promise might be cut after year one rather than year four. The appetite for R&D remains the same, but what has changed is the willingness to let go of what isn’t working, and faster. It is a disciplined reallocation of capital toward the bets most likely to pay off.”
Nigel Layton Partner - Head of Pharma & Life Sciences
Artificial Intelligence sits firmly on the sector’s agenda. Larger organisations are positioning AI as a central pillar of their strategy. Results from our C-suite Barometer 2026 mid-year insights insights show that 63% of leaders globally have reported productivity gains of up to 10% from their AI investments, and AI has been named among the external trends having the biggest impact on organisations globally. As Nigel Layton, Head of Pharma & Life Sciences, Forvis Mazars in the UK, says “AI and digital transformation are having a real impact on the sector, shortening time to market and streamlining back-office processes.
However, despite this he notes ‘some of these areas are seeing productivity gains, but for number of projects I see, it is too early to tell.” He adds “The promise is real and widely discussed, particularly AI’s potential to identify trends across vast datasets and compress lengthy trial timelines, but there has not been hard evidence that some of those gains have landed.” The expectation is that, in the medium term, this becomes the baseline. The question is when, not whether.
Despite a strong focus on technology and capital as growth enablers, the real constraint on growth may be the availability of skilled people. As the sector becomes more sustainability-led, resilience-focused and technology-enabled, access to skilled talent is increasingly emerging as a critical factor in determining success. Companies in the sector are therefore beginning to expand their presence in locations that offer strong talent pools, reflecting a broader shift in how growth strategies are executed. In this environment, skills availability is becoming just as important as capital investment in shaping an organisation's ability to innovate, scale and deliver on its ambitions.
Our C-suite Barometer 2026 mid-year insights highlight that 73% of organisations across sectors have a favourable view on conditions for international growth. For many life sciences businesses, opportunities overseas are a key driver. Larger, globally active organisations increasingly require both domestic and international expansion to meet ambitious growth targets, while smaller firms often look beyond the UK once opportunities in their home market begin to mature. The US remains a particularly attractive destination for the sector given its scale as the world's largest pharmaceutical market and its efforts to attract investment, while the Asia-Pacific region also continues to offer significant growth potential. For many private-equity-backed UK businesses in the sector, establishing a presence in the US is viewed as a natural next step in their growth journey.
The main challenge is not a lack of ambition but the complexity of adaptation. Successfully entering new markets often depends on the ability to localise products, navigate regulatory requirements and align operations with local market needs.
Asked what should occupy leaders over the medium and long term, Nigel Layton, Head of Pharma & Life Sciences, returns to two themes:
“Shaving even a month or two off that timeline can be enormously valuable. Underpinning it all is the pipeline of drugs that remains the industry’s lifeblood.”
Nigel Layton Partner - Head of Pharma & Life Sciences
The sector’s overarching message holds true: a future shaped by sustainability-led strategy, resilience to energy and economic pressures, selective technology adoption, disciplined investment, and a renewed focus on talent, R&D and operational agility.
Beneath these themes lies a sector that remains dependable in its demand, careful in its management of margins, increasingly disciplined in its allocation of capital, and focused on balancing short-term pressures with long-term growth priorities. Protecting the innovation pipeline while securing the talent needed to deliver it is becoming a defining challenge.
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