LSHC execs are reacting to tariffs, policy shifts…but is it enough?

By Jay Bhatt, D.O., managing director, the Deloitte Center for Health Solutions, Deloitte Services LP, Todd Konersmann, Global Life Sciences sector leader, Deloitte Consulting LLP, Theresa Walker, Global Trade Advisory leader, Deloitte Tax LLP

Most life sciences and health care (LSHC) executives (94%) have taken steps to position their organizations for future success in response to taxes, tariffs, and drug-pricing regulations, according to the results of a new survey conducted by the Deloitte Center for Health Solutions. Additionally, one out of five respondents (20%) said their organizations have established cross-functional teams dedicated to keeping on top of policy shifts.

The new survey, which was fielded in late October 2025, is a follow-up to the Center’s 2025 Tariffs, Pricing, and Taxes Survey. That survey, conducted last summer, found that a majority of executives expected policies would have some impact on their businesses. Many respondents said they had started to implement scenario planning around those topics. While the latest survey results indicate that life sciences organizations are responding to changes, some of them might not be moving quickly enough to keep pace with the new rules. Potential pharmaceutical tariffs, along with the unfolding effects of July’s H.R. 1ⁱ (also known as the One Big Beautiful Bill Act), are among the changes many executives said they are following closely. In addition, existing regulations, new CMMI models, and policies—including the Inflation Reduction Act, the 340B drug-pricing program, and Most Favored Nation drug pricing—could all have implications for life sciences and health care organizations this year (see Tariffs, pricing, and regs: Navigating exponential complexity).

Some organizations have moved more quickly than others to respond. What sets them apart, however, is not their speed of compliance but their agility in adaptation. Rather than seeing regulatory changes as obstacles, forward-thinking executives appear to be making data-driven efforts to embrace them as strategic and competitive opportunities. Nearly 90% of survey respondents said they are actively engaging with policy makers, trade associations or industry coalitions to help them understand the implications that taxes, tariffs, and drug-pricing policies could have on their industry, their organizations, and their customers.

Three key findings…and what they could mean
The most recent survey found that 29% of biopharmaceutical companies have established a dedicated cross-functional team to monitor tax, tariff, and drug pricing policy changes. Moreover, 74% of biopharma executives said their organizations have started scenario planning to help navigate uncertainties. However, only 18% of medtech executives said their companies have such cross-functional teams in place. Here are three key findings from our latest survey…and possible implications:

1. Nearly half of respondents anticipate potential tariffs tied to Section 232 National Security Investigation of Imports of Pharmaceuticals and Pharmaceutical Ingredients will have a “significant” or “moderate” impact on their organization.
   
   What it could mean: About a quarter of biopharma executives predict the financial implications on their supply chain—from proposed tax, tariff, and drug pricing policies changes—could be more than $10 billion a year, according to the survey results. Last April, the Department of Commerce launched a Section 232 pharmaceutical investigation into foreign-sourced drugs and their ingredients, aiming to identify vulnerabilities that could lead to supply chain disruptions or price hikes.ⁱⁱ
2. Almost half of European-based LSHC organizations expect current or planned US tax, tariff, and drug pricing policies will significantly impact their business, compared to 30% of US-based organizations.
   
   What it could mean: The data suggests this is an industry that understands the potential impact but has not yet undertaken the full-scale structural changes that may be needed to address it. According to our recent survey results, 17% of global life sciences companies intend to move or expand production in the US in response to tariffs and new policies. However, that could change as companies learn more about the financial implications.
3. Most respondents expect tax, tariff, and pricing policy changes will have some influence on their capital allocations. Almost half (47%) expect the impact will be “moderate,” while 19% anticipate a “significant” impact, and 4% said the effect would likely be “extreme.”
   
   What it could mean: A majority of survey respondents report that tariffs and trade instability are materially increasing their cost base, especially in manufacturing, specialized APIs, and advanced inputs. Historically, the life sciences sector has been able to absorb outside cost pressure. Companies that invest in value, flexibility, and real-world outcomes could define the next frontier of innovation.

Today’s choice: Waiting it out vs. stepping it up
In the midst of ongoing changes, it can be easy to focus on moment-to-moment tactical reactions. But this may be a time for LSHC executives to evolve, rather than merely react. Scenario planning, capital reallocations, and other moves that are taking place now can become the foundations of that deeper change if organizations forge ahead and build resilience for the long haul. Changes to unify systems, update culture, and hone decision-making capabilities can give them the ability to take charge of their futures.

A few months ago, we wrote in this space that tariff, drug pricing, and regulatory pressures called for a state of “perpetual readiness.” Organizations that have perpetually ready cross-functional teams may be best positioned to navigate through the changes ahead.

Acknowledgements: Jessica Overman, Dimple Jobanputra, Leslie Korenda, Maulesh Shukla, Chris Giambrone, Wendy Gerhardt

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Endnotes

ⁱHR 1: An act to provide for reconciliation pursuant to title II of H. Con. Res. 14, Library of Congress, July 4, 2025
ⁱⁱFact Sheet: National Security and economic resilience through Section 232, The White House, April 15, 2025

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