Geopolitical tensions are now the top economic risk facing life sciences companies, according to a new report from Willis, a WTW business.
The report, Managing the new economic risks in life sciences, was published Thursday with Oxford Analytica. It draws on a panel of senior executives and risk professionals across North America, Europe and Asia.
The panel identified five leading risks for 2026-2027. The research highlights growing concern that geopolitical rivalry, trade policy and government intervention increasingly shape where products are developed, manufactured and sold.
The five risks, in ranked order, are:
“Our research suggests companies are no longer managing geopolitical risk as a standalone issue, they are having to factor it into decisions about investment, manufacturing, innovation and market strategy,” Sam Wilkin, director of political risk analytics at Willis, said. “The challenge for leaders is not simply responding to one-off shocks, but navigating a world where geopolitics is becoming a permanent and central feature of the business environment.”
The findings suggest a more fragmented operating environment for an industry that long relied on global research networks, international supply chains and cross-border investment.
The risk landscape has also shifted quickly since WTW’s 2024 study. Pandemic-related issues featured prominently then, while executives now focus on geopolitical fragmentation, pricing pressures and trade uncertainty.
The warning lands as US pharmaceutical tariffs widen. Duties that began July 31 for 17 large manufacturers expanded Sept. 29 to mid-sized and smaller drugmakers, with rates that can reach 100%.
Companies that pair an onshoring plan with a most-favored-nation pricing agreement can qualify for zero tariffs through January 2029. Generics and biosimilars remain outside these duties for now.
The US has capped duty rates at 15% for applicable goods from the EU, Japan, South Korea and Switzerland under existing trade deals.
Healthcare cost pressure is also building. WTW’s 2027 Global Medical Trends Survey projects a global medical cost trend of 10.2% for 2027, up from 10.1% in 2026.
For brokers with life sciences clients, the five-risk ranking maps onto specific coverage conversations. Geopolitical lock-out - the top-ranked risk - has the most direct coverage implication: clients with manufacturing operations or research partnerships in geopolitically exposed markets should be reviewing political risk cover, supply chain disruption protection, and trade credit limits. The tariff section is the most time-sensitive: clients who have not yet filed an onshoring plan with a most-favored-nation pricing agreement face rates that can reach 100% from February, with the zero-tariff window running only to January 2029.
US pricing reform and transatlantic regulatory divergence both point toward D&O and regulatory risk placements. As governments treat life sciences as a strategic sector, senior executives face greater exposure to enforcement actions, pricing investigations and cross-border compliance failures. Healthcare cost pressure - the fourth risk - is already visible in what carriers are charging for employer health plans, so advisers with life sciences clients that self-fund should factor that trend into 2027 renewal conversations. The full Willis/Oxford Analytica report is available for download from WTW.
