With the U.S. importing around $200 billion in pharmaceutical products in 2024, a 10% tariff could add an estimated $20 billion in costs, while disruptions to a supply chain that sources 82% of active pharmaceutical ingredients (APIs) from China and India threaten to lengthen production timelines and exacerbate medicine shortages.
New survey data from Nature Research Intelligence, which drew on responses from senior decision-makers across pharmaceutical (33%), biotechnology (22%), diagnostics and medical devices (20%), and laboratory equipment and services (15%), shows industry leaders are reporting disrupted material flows, lengthening production timelines, and exacerbated medicine shortages.
Market Confidence
Despite the supply chain and tariff environment, the majority of life sciences leaders surveyed remain growth-oriented:
- 73% forecast further market growth over the next 12 months, with 27% expecting significant expansion
- 74% expect revenue growth in 2026 — 24% significant, 50% moderate
- 75% anticipate increasing strategic investment over the next 12 months — 25% at significant levels, 50% moderate
- 69% describe current market conditions as strong
Economic conditions, research funding, and the political landscape were cited as the three most influential factors shaping market expectations.
Revenue Outlook by Sub-Sector
Growth expectations vary significantly across the sector:
- Pharmaceutical: 37% forecast significant revenue growth, the highest of any sub-sector surveyed; 46% moderate growth
- Biotechnology: 19% forecast significant revenue growth; 48% moderate growth
- Medical Devices and Diagnostics: 11% forecast significant revenue growth; 52% moderate growth
- Laboratory Equipment and Services / Reagent Supplies: 11% forecast significant revenue growth; 47% moderate; 27% expect no change; 16% anticipate a decline
Competitive Intensity
Half of all survey respondents expect a more competitive environment over the next three to five years. The expectation is highest in APAC:
- APAC: 76% of leaders anticipate increasing competition
- EMEA: 60% anticipate increasing competition
- Americas: 44% anticipate increasing competition
Strategic Priorities for 2026
When asked what changes they are planning to implement over the next 12 months:
- 49% are targeting new customers or new audiences and regions
- 49% are advancing new product development
- 45% are planning new product launches
- 37% plan to increase reliance on automation and AI
- 35% are testing new channels
- 34% are repositioning existing products
Pharmaceutical (56%) and biotechnology (58%) companies are most focused on new product development. Medical devices and diagnostics (52%) and laboratory equipment and reagent suppliers (53%) are more focused on regional diversification and new audience targeting.
Research Funding Pressure
Nearly one-third of leaders (32%) identify the funding landscape as a primary driver of change — rising to 44% in the Americas. US funding data from 2025:
- 5,844 NIH grants cancelled or suspended
- 1,996 NSF grants cancelled or suspended
- Almost 10% of affected awards were tied to infectious disease research
- Legislation passed January 2026 moderated proposed cuts; NIH budget increased approximately 1% for 2026, but non-defence R&D faces a projected overall decline of 3–7%
Source: Nature Research Intelligence, 2026 Life Sciences Market Sentiment Report
