Manufacturing, supply chain risks in 2026 will continue to weigh on life sciences

As 2025 comes to an end, geopolitical and economic uncertainty remain as formidable challenges for the life sciences industry — which this year weathered a volatile global business environment. However, the sector in 2026 will continue to face manufacturing and supply chain risks, requiring agility and flexibility in companies’ operational strategies.

That’s the consensus of two separate reports from consulting firms Deloitte and West Monroe, providing their respective insights on key trends that are expected to shape the life sciences industry next year.

Deloitte’s report, based on a recent global survey of biopharma and medtech executives, indicates that geopolitical tensions are among the chief concerns weighing on life sciences leaders.

“Concern about geopolitical tensions has risen sharply, with 39% of respondents naming it as a top issue — a jump of 20 percentage points from last year and the largest increase among all tracked trends,” according to Deloitte. “Nearly the same share of respondents (38%) identified inflation, broader economic pressures, and supply chain risks as factors likely to shape organizational strategies in 2026.”

Tariffs are increasing costs for active pharmaceutical ingredients (APIs), raw materials, and lab supplies which are causing companies to take calculated steps to reduce exposure, finds West Monroe’s life sciences industry outlook report.

The report notes that tariffs and supply volatility are prompting “selective U.S. investment while keeping global networks intact.” West Monroe pointed to Eli Lilly’s planned $5 billion capital expenditure on a new U.S. manufacturing site in Virginia to shore up access to APIs and mitigate future supply risk.

“Rather than fully reshoring, many firms are hedging against policy shifts and tariff volatility — adding domestic capacity while keeping trusted overseas partners,” West Monroe said. “The most resilient companies are diversifying manufacturing and sequencing regulatory and operational changes to minimize risk. Flexibility, not total localization, will define the next generation of supply strategies.”

West Monroe advises companies to map out supply and tariff risks across their most critical inputs, from APIs and raw materials to reagents, single-use components, and replacement parts.

“When modeling supplier or site transitions, account for the requalification and regulatory work required to make them compliant,” according to West Monroe, which notes that time, testing, and documentation can add months and millions to a transition. “The goal is a full, data-driven picture of exposure that reflects both direct and hidden costs of change.”

West Monroe also recommends that companies collaborate with contract development and manufacturing organizations (CDMOs) that have both U.S. and global capacity, creating hybrid models that balance resilience, cost, and regulatory complexity.

Deloitte similarly forecasts that in 2026 organizations will be rewarded that are able to “harmonize global momentum with local resilience — balancing bold investments in artificial intelligence and emerging technologies with the pragmatic ability to adapt to regulatory and economic change.”    

AI opportunities, challenges

Deloitte’s survey results show that artificial intelligence (AI) and digitalization can help support such efforts at resiliency and adaptability. Looking ahead to 2026, nearly half of respondents (48%) to the consulting firm’s survey identified accelerated digital transformation as a trend that is likely to have a substantial impact on their organizations next year — a statistically significant increase compared to 2025.

“The proliferation of generative AI, identified by 41% of respondents as an influential trend, highlights how analytics and automation are increasingly shaping research, manufacturing, and commercial operations,” according to Deloitte. “Notably, 30% cited agentic AI — AI systems that can act autonomously to achieve goals, make decisions, and perform tasks — a new survey category this year, signaling growing interest in advanced digital capabilities.”

However, despite these areas of interest, Deloitte found that just 22% of life sciences executives said they have successfully scaled AI, while only 9% indicated they have achieved significant returns on their investments.

Still, according to West Monroe, AI is transforming how research, manufacturing, and operations are conducted, moving from R&D pilots to full enterprise deployment. The consulting firm called out digital twins as reshaping development speed and lab-to-manufacturing efficiency.

At the same time, West Monroe advises that it isn’t just about adding more digital tools to a company’s arsenal but using AI with precision and purpose. They also pointed to challenges with workforce skills.

“AI is reshaping research, manufacturing, and commercialization — but technology is outpacing talent,” West Monroe’s report warned. “Medtech leads in hiring data specialists and deploying copilots, while pharma has yet to scale beyond pilot projects.”

Pharma’s current AI adoption is focused on exploration with many plants still piloting limited applications, according to the report. Among other settings, the technology must operate under stricter human oversight in manufacturing.

“The opportunity lies in knowing where AI is ready to scale and where restraint is required for safety,” West Monroe concluded. “Teams that master that balance will lead the next wave of innovation.”