The global pharmaceutical industry is entering a correction phase. Following a surge in production in 2025 driven by fears of trade wars, the market expects a sharp slowdown. According to the Atradius report “Industry trends pharmaceuticals: January 2026”, the key trends for the coming year are the shift of R&D centers to Asia, US attempts to reshore production through protectionism, and Europe’s loss of competitive advantages.
The “High Base” Effect: Why the Market is Stalling
By the end of 2025, global pharmaceutical production showed explosive growth of 9.1%. However, analysts warn that this success was artificial. The main driver was pre-emptive stockpiling (front-loading): manufacturers and distributors hastily filled warehouses, racing to beat the imposition of strict American tariffs.
A natural decline in activity is expected in 2026: the forecast for global output growth is just 1.6%. The market will be “digesting” the inventory built up during last year’s panic buying.
USA: Tariff Leverage and Forced Price Reductions
The US market, which grew by 5.2% in 2025, will slow to 0.9% in 2026. The Donald Trump administration is using tariff policy as a tool of pressure. Although generics and most branded drugs have so far received tariff exemptions or quotas, the threat of new restrictions remains.
Pharma giants were compelled to accept US terms: in exchange for avoiding high tariffs, they agreed to lower drug prices to meet global minimum benchmarks.
Parallel to this, US authorities are stimulating the return of manufacturing to American soil by reducing regulatory pressure. However, analysts remain skeptical: due to the high cost of production within America, these measures may prove ineffective.
Europe: Loss of Leadership
The most dramatic scenario is unfolding in the Eurozone. After a record production jump of 21.6% in 2025 (driven largely by Ireland stockpiling ahead of tariff threats), a decline of 3.7% is expected in 2026.
The European Union faces a systemic competitiveness crisis. Despite having a developed base and quality standards, Europe is losing the innovation race to the US and China. The reasons include slow clinical trial launch procedures, complex regulation, and a smaller volume of available funding.
The UK has chosen its own path: it negotiated zero tariffs with the US, but in return committed to lowering drug prices for the American market.
Asia: The New Center of Power
Unlike the West, Asian markets are demonstrating confident organic growth.
- China: Production growth for 2026 is forecast at 6.6%. The country is successfully transforming the industry from a “generics factory” to a creator of innovative drugs. Biologics and new molecules already account for 40% of developer portfolios, and China’s share of global clinical trials has risen from 5% to 30% in ten years.
- India: Growth of 5.0% is expected. The government is actively subsidizing the production of Active Pharmaceutical Ingredients (APIs) to reduce dependence on Chinese raw materials.
- Southeast Asia: Vietnam (+8.2%) and Singapore (+7.2%) are becoming beneficiaries of supply chain diversification, attracting investment from global giants.
Technological Shift
The global pharmaceutical market is changing priorities: instead of simple medicines, manufacturers are betting on complex technologies. The main focus is now on biopharmaceuticals, antibody-drug conjugates (ADCs), and gene therapy.
Artificial Intelligence (AI) is becoming a critically important tool. It is expected that in the coming years, the adoption of AI will significantly increase sector productivity, especially in preclinical stages and R&D, allowing premium products to be brought to market faster.
Summary
Thus, the Atradius report confirms a global realignment of forces. In the US, the administration is tightening control over drug costs through tariff mechanisms. The Eurozone is showing negative dynamics and an outflow of innovation due to regulatory barriers. The industry’s center of gravity is definitively shifting to Asia, which is transforming from a production base into a key hub for clinical research and biotechnology.
