Biopharma innovation surges as regulation and risk rise

Key points:

• Regulatory complexity and policy uncertainty are slowing drug approvals and dampening investor confidence.

• Rising specialty drug complexity is fragmenting supply chains and driving higher costs and access challenges.

• Pricing pressure on branded pharmaceuticals is intensifying amid affordability concerns and federal intervention.

January 2026 — The U.S. biopharmaceutical industry has never been more innovative — or more vulnerable to fragmentation. Even as scientific breakthroughs have dramatically accelerated drug development in recent years, mounting pressures around pricing, access, and regulation are pushing the industry toward a critical inflection point.

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 “There are thousands of diseases affecting millions of patients around the world who are waiting for scientists to do their jobs and come up with solutions,” said Christopher Molineaux, president and CEO of Life Sciences PA in an interview with Invest:. But, “investors have been sitting on the sidelines largely because of public policy issues, creating a degree of uncertainty for the industry and business in general.” 

According to Kedrion Biopharma Chief Commercial Officer Bob Rossilli, the biggest point of contention is around product approvals and bringing new treatments to market, which have become increasingly complex and tightly-controlled. 

“The complexity of those regulations continues to grow, forcing our company, and others across the industry, to constantly adapt,” Rossilli told Invest:. This often intensifies financial and administrative burdens for manufacturers and pharmaceutical companies. 

“It’s a costly and time-intensive process to move from hypothesis and concept to full approval,” he added.

As Rossili observed, this evolving regulatory framework is changing the approach to the drug approval process and creating broader uncertainty for drug developers.  

Partly as a result, the number of new FDA-approved drugs is down compared to recent years. In 2025, there were just 46 novel drug approvals, versus 50 in 2024 and 55 in 2023, according to a white paper by Fierce Pharma. 

At the same time, new meds haven’t been selling the same. In 2024, there were nearly 20 new meds approved that were expected to generate blockbuster sales of at least $1 billion by 2030, according to Evaluate Pharma. However, in 2025, only eight newly approved medicines were expected to break past the trillion-dollar threshold. 

According to a report by the FDA Center for Drug Evaluation and Research (CDER), fewer approvals and endorsements generally yield higher prices for consumers, hurting affordability, and leading to a more competitive, fragmented industry.  

For Joe Cardosi, founder and CEO of Free Market Health, the trend towards fragmentation and complexity is creating real challenges for the biopharma industry in the country, especially within the specialty drug segment.  

“While payers are understandably focused on managing costs, the deeper and more persistent challenge lies in the growing complexity and fragmentation of the specialty pharmacy ecosystem,” Cardosi told Invest:.

As Cardosi explains, today’s manufacturers often bring high-cost, high-complexity therapies to market and limit distribution to a handful of specialty pharmacies equipped to handle specialized logistics and medication. 

This means that the increase in complexity of the specialty drug has created a similarly elaborate supply chain to manage the distribution, driving up expenses for drug makers and payers alike, and reducing accessibility. 

“These treatments, often for complex conditions like cancer, cystic fibrosis, and autoimmune disorders, can cost anywhere from $10,000 to $30,000 or more per month,” said Cardosi.

These elevated prices continue to encourage greater competition and production in the market. In fact, the number of specialty drugs in the United States has vastly increased in recent years from just 10 in 1990 to 300 in 2015.

As Cardosi notes, this shift in complexity has reshaped the buyer-seller dynamic within the pharmaceutical space. While payers could historically rely on a single specialty pharmacy to manage all conditions and dispense all products, biopharma companies have started to produce more specialized medications, prompting pharmacies to shift towards those niche markets too. 

“Many (pharmacies) now focus on specific conditions,” Cardosi said. “This sub-specialization has left payers scrambling to identify which pharmacy has access to a given medication and how to efficiently connect a prescription to the right specialty provider.”  

Consequently, biopharma companies across the country are struggling to reconcile costs, fragmentation, and patient needs. 

In fact, pricing and access to medications are some of the most significant considerations for nearly half of life sciences executives, according to a new Deloitte survey of 280 industry leaders. This is seen particularly in the branded pharmaceuticals space. 

According to Luca Maini, assistant professor of health care policy at Harvard Medical School’s Blavatnik Institute, the price of branded drugs — such as GLP-1 medicines for diabetes and obesity or next-generation cancer drugs — are becoming harder to manage due to high-demand and monopolistic control.  

As Maini observes, around 90% of drug prescriptions are generic (cheaper, mass produced commodities) but 80% of customer spending is on branded drugs.

“When we talk about affordability and spending, the branded pharmaceuticals are more of a concern,” said Maini, as cited by Harvard Medical School. 

Those have also been the focus of the Trump administration since September 2025, when the White House announced 14 deals with major pharmaceutical manufacturers to bring down drug prices.

According to President Trump, these negotiations will provide “substantial price relief on numerous products taken by millions of Americans.” 

However, there are growing anxieties about its tangible effects. According to Molineaux, “the executive orders coming out of the White House create more uncertainties for an industry that is already very difficult to navigate.” 

Molineaux also pointed out that nine out of 10 biopharmaceutical companies seeking FDA approval for a pharmaceutical product will fail, making the process high-stakes and expensive. 

“Investors are already very cautious. When you add another layer of uncertainty, like federal policy, that makes investors even more reluctant to fund this high-risk business,” he added. 

Want more? Read the Invest: reports.