Geopolitical risks and supply chain shifts impact life sciences industry

The life sciences and pharmaceutical industries are facing increased complexity due to geopolitical instability, shifting trade routes, and rising costs. According to Deloitte’s 2026 Life Sciences Outlook, 39% of respondents identified geopolitical risk as a top concern.

Key challenges include rising energy and raw material prices, such as glycerine, which has seen costs increase by over 60% in the past year. Additionally, new regulatory regimes, including foreign investment controls like the UK National Security and Investments Act and the EU’s Foreign Direct Investment Screening Regulation, are complicating cross-border transactions.

Industry experts note a fundamental shift in supply chain strategy. While previous models prioritized low costs, companies are now focusing on building resiliency to navigate tariffs and evolving trade routes. Ben Wright, Head of The Hartford’s Global Insights Center, observed that trade routes are actively shifting from high-tariff markets to low-tariff markets.