Posted: 13 Jun. 2024 5 min. read

Midyear Global Outlook for Life Science

Three disruptive forces may impact life sciences beyond 2024

By Vicky Levy, Global Life Sciences sector leader, Deloitte Consulting, LLP

In recent years, Deloitte’s annual Global Outlooks have focused largely on industry transformations driven by the pandemic, the adoption of digital and virtual technologies, and increased merger and acquisition (M&A) activity (see COVID Changed Life Sciences Companies…Will They Change Back?). Six months into 2024, it appears the life sciences sector has entered an era of disruption that goes beyond transformation. 

Our 2024 Global Life Sciences Sector Outlook describes three potential disruptors for pharmaceutical companies and medical device manufacturers around the world:

  1. Artificial Intelligence (AI): In a blog last fall, I suggested that AI, specifically Generative AI, is a catalyst capable of transforming entire end-to-end processes for life sciences companies (see Can Life Sciences companies unlock the full value of GenAI?). More than 90% of US biopharma and medtech executives expect Generative AI will have some impact on their organizations, according to a survey conducted by the Deloitte US Center for Health Solutions (see 2024 US Outlook for Life Sciences GenAI, drug prices, economy likely to influence strategy). Consider this: With the help of AI, it might take a pharmaceutical company just seconds—rather than weeks or months—to determine if a drug includes the most effective ingredients. The technology might also be used to quickly identify potentially harmful chemicals such as per- and polyfluorinated substances (PFAS). PFAS is a class of chemicals commonly used in cleaning products, food packaging, clothing, pharmaceuticals, and medical devices. PFAS are often described as “forever chemicals” due to their inability to degrade naturally in the environment (see Proactive steps may help pharma, medtech mitigate PFAS risk). Understandably, much has been made by pharma companies about Generative AI and its promise to improve efficiencies.1 The technology also has the potential to generate significantly greater cost savings than past innovations like robotics and process automation.

    The biggest disruption, however, could be in the technology’s potential to alter the behaviors of health care stakeholders. The next generation of physicians and patients, for example, could grow accustomed to regular interactions with AI-generated content. Many organizations are experimenting with various AI use-cases and are trying to determine what might be possible. But they are still in the early stages of transformation, and speed matters. Companies that embrace Generative AI early could find themselves with a competitive advantage.

    Some companies have identified the need to upgrade enterprise technology and integrate Generative AI into mostly redesigned work processes. Organizations that focus on value capture—and have the conviction to redesign core processes and connect Generative AI use-cases—are more likely to realize the potential. Given the broad enterprise applicability and anticipated impact, a balanced, clear, and intentional governance model could help drive adoption, ensure accountability for outcomes, and help companies realize value (see Genie out of the bottle: Generative AI as growth catalyst).

  2. GLP-1s: Obesity is a root cause of many comorbidities including diabetes and heart failure, and has been linked to more than 30 types of cancer, according to the results of a study published by researchers in Sweden who monitored the weight and lifestyle of more than 4 million people over 40 years.2 By 2035, half of the world’s population—about four billion people—will meet the definitions of being over-weight or obese.3 If that happens, costs related to care and lost productivity could top $4 trillion a year, according to the report.4 GLP-1s, with their established impact on obesity management and weight reduction, could have an outsized impact on employers and pharmaceutical companies. GLP-1 drugs—named for the glucagon-like peptide hormone they mimic—can help regulate blood sugar, slow digestion, and decrease appetite. They have been used as a treatment for type 2 diabetes since 2005, but have recently been approved for weight loss.5 Given the off-label popularity of the drugs for weight loss, some manufacturers are seeking fast-track approval from the US Food and Drug Administration (FDA) for a weight-loss indication.6 While the drugs could improve health and reduce incidence of some diseases, the cost of GLP-1s could put them out of reach for low-income populations. Several European Union (EU) countries have reimbursement policies that may demonstrate a pathway to affordable coverage for the drug in the United States. For example, some European coverage models deploy effective but lower-cost medications for patients who have a BMI that does not meet the criteria for “obesity” but whose health could still benefit from treatment.7 It has been a long time since there has been a class of therapies potentially as disruptive as GLP-1s.

  3. Global pricing pressure: Government-mandated pricing pressure and controls are likely to play an increased role in the affordability and accessibility of certain medicines. In the US, the Inflation Reduction Act (IRA), which includes several provisions intended to reduce the cost of prescription drugs for Medicare beneficiaries (as well as for the US federal government), is having an impact on pharmaceutical companies (see Biopharma’s IRA readiness: From What? To Now What?). Under the IRA, federal regulators negotiate the price of certain drugs (under Medicare Part D and Part B) directly with pharmaceutical manufacturers. The first 10 drugs identified for price negotiation represent slightly more than $50 billion in gross prescription drug spending for the Medicare program—about 20% of total drug expenditures, according to the US Department of Health and Human Services (HHS).8 The selected drugs are used to treat a broad range of conditions (e.g., heart failure, diabetes) that affect nearly 9 million Medicare beneficiaries, according to HHS.

    2024 is the first year that the sector will experience a direct impact from the law. In the near-term, it will affect the price that can be charged for certain medicines, which could impact company margins.9 The law’s indirect impact could also be disruptive if it prompts some companies to invest less in innovation, which the industry’s trade group has cited as risk with the IRA.10 Drug manufacturers spend an average of $2.3 billion—from discovery to launch—to bring a new drug to market (see Drop-off in returns on R&D investments). Some pharmaceutical companies, for example, might decide not to pursue expansions to an existing label. In the longer term, the IRA could disrupt portfolios and alter the competitive landscape.

    In the United Kingdom, an agreement was recently reached to control the level of spending on innovative drugs. The Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) caps the total allowed sales value of branded medicines to the UK’s National Health Service (NHS) on an annual basis.11 The cap grows at an agreed rate of 2% per annum, but any medicine sales above the cap are required to be paid back to the UK Department of Health and Social Care (DHSC) via levy.12

    In Asia, Japan has steadily reduced prices every other year, ranging from around 2% to 9.4% after the latest fiscal year-over-year (FYoY) 2023 review.13 Increased public focus on drug pricing, and efforts to control pricing through regulations like the IRA or others, are likely to impact the industry. The question is how disruptive will it be in the near term?


We are halfway through 2024, and the seeds of disruption appear to be broadly spread across the pharma, biotech, and medtech industries shaping this new era of disruption. We look forward to tracking (and educating) our clients about the potential disruption of the life sciences sector.

Latest news from @DeloitteHealth


1Discover how top pharma is using AI for efficiency gains, IQVIA, January 26, 2024

2Obesity is now linked to 32 types of cancer, The Daily Mail, May 10, 2024

3Economic impact of overweight and obesity to surpass $4 trillion by 2035, World Obesity Federation, March 2, 2023

4Half of world on track to be overweight by 2035, BBC News, March 2, 2023

5Medications containing semaglutide marketed for Type 2 diabetes or weight loss, FDA, January 1, 2024

6FDA approves new medication for chronic weight management, FDA news release, November 8, 2023

7Europe's lessons for the U.S. on how to cover weight loss drugs, STAT, December 14, 2023

8HHS selects the first drugs for Medicare drug price negotiation, HHS press release, August 29, 2023

9FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program, Kaiser Family Foundation, January 31, 2024

10Inflation Reduction Act could have devastating consequences for Americans, PhRMA press release

11Voluntary scheme for branded medicines pricing and access (VPAS) – media fact sheet, UK Department of Health and Social Care, March 2023


13Over 2,000 drugs in Japan undergo an average price reduction of 9.4% in April, Pharmaceutical Today, April 20, 2023

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor.

Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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