Every January, more than 8,000 executives from pharmaceutical companies, biotechnology firms, medical device manufacturers, and healthcare systems converge in San Francisco for the J.P. Morgan Healthcare Conference. This gathering represents the most concentrated assembly of C‑suite decision-makers in the life sciences, making it an unparalleled window into the strategic priorities, pain points, and concerns that will shape the industry for the year ahead.^[1][2]

Here, we have compiled the ten most notable challenges that emerged from executive presentations, panel discussions, investor meetings, and industry commentary at JPM 2026. The intended objective is providing a clear-eyed view of the landscape rather than speculative trend-watching. For life science leaders, these themes represent not just obstacles but opportunities to create differentiated strategies, forge partnerships, and leverage technology for competitive advantage.^{[3][4][5][6][7][8][9]}

The common thread across JPM 2026 was a decisive shift from aspiration to execution. Leaders emphasized operational discipline, measurable return on investment, and the translation of strategy into tangible outcomes. The era of growth at any cost has ended; what matters now is disciplined capital deployment, rigorous evidence generation, and the organizational capacity to rewire operating models under intense performance pressure.^{[5][10][7][8][9]}

1. Capital scarcity and disciplined dealmaking

The dealmaking environment at JPM 2026 was defined by a paradox: ample capital exists, but only for assets that meet exceptionally high standards of differentiation, clinical de‑risking, and strategic fit. Alvarez & Marsal characterized the M&A tone as constructive but highly selective, with companies moving away from growth at any cost toward structured partnerships, option-based deals, and focused bolt-on acquisitions. Boards are demanding clear logic on synergies, integration plans, and de‑risking of transactions through post‑close execution, and success is increasingly measured by the speed and quality of integration rather than by deal size alone.^[11][6][7]

The financial backdrop is stark. Pharmaceutical companies executed more than $130 billion in transactions in 2025, roughly double the prior year, yet JPM 2026 itself saw relatively few new mega‑deal announcements, reflecting a more mature, measured deal cycle. Many executives used the conference to explain how recent acquisitions fit into longer-term strategy rather than to announce new deals under media pressure. Underpinning the urgency is the looming patent cliff: estimates suggest $173.9 billion to as much as $400 billion in annual revenue is at risk from loss of exclusivity by 2030–2033, with major products such as Keytruda, Opdivo, Eliquis, and Prevnar 13 among those affected.^{[4][8][12][13][14]}

Key pain points:

2. Policy, pricing, and regulatory uncertainty

Policy and regulatory uncertainty was repeatedly cited as a top strategic concern, with the Inflation Reduction Act (IRA), Medicaid cuts, pharmacy benefit manager scrutiny, and trade tensions shaping capital allocation and launch decisions. The first round of negotiated prices under the Medicare Drug Price Negotiation Program took effect on 1 January 2026, establishing minimum discounts of 38 percent off 2023 list prices for ten drugs and generating an estimated $6 billion in annual savings for Medicare and $1.5 billion in reduced out‑of‑pocket costs for beneficiaries.^{[16][17][8][18][5][10]}

A particular point of contention is the so‑called pill penalty, under which small‑molecule drugs become eligible for price negotiation nine years after FDA approval, while biologics are subject to negotiation after thirteen years. This four‑year discrepancy raises concerns about distorted investment incentives, and analyses note that funding for small‑molecule candidates has declined significantly since IRA enactment. In April 2025, a presidential executive order directed the Department of Health and Human Services to work with Congress on aligning the treatment of small molecules and biologics, but any fix is expected to be coupled with measures that avoid increasing net Medicare costs.^[17][16]

Key pain points:

3. Translating AI from hype to operational impact

Artificial intelligence dominated JPM 2026, but the conversation centered far more on execution, governance, and measurable value than on blue‑sky promises. Commentators summarized the shift as proof over promise, reflecting a focus on demonstrated clinical, operational, and commercial impact rather than speculative potential. Health systems and life science executives stressed the need to reduce cognitive load, not add another standalone tool, and highlighted the difficulty of scaling AI responsibly in highly regulated, safety‑critical environments.^{[21][8][22][23][1][5]}

Regulatory guidance has advanced rapidly. In early 2025, the FDA issued draft guidance on AI in drug regulatory decision‑making, later followed by the Guiding Principles of Good AI Practice in Drug Development. On 14 January 2026, the FDA and European Medicines Agency jointly released ten high‑level principles for AI use across the drug development life cycle. In parallel, the Joint Commission and Coalition for Health AI published governance recommendations in September 2025 that are now serving as a de facto national framework for health system AI deployment. Recent industry analyses project that by 2030, AI could be integrated into 60–70 percent of clinical trials, accelerating timelines and generating annual savings of $20–30 billion.^[22][23][24]

Key pain points:

4. Obesity and GLP‑1 drugs: demand, access, and manufacturing strain

Obesity and GLP‑1 receptor agonists were central to JPM 2026 discussions, but attention focused on the practical challenges of scaling the category rather than on enthusiasm alone. Novo Nordisk has launched an oral formulation of semaglutide for weight loss, the first oral GLP‑1 approved in the United States, while Eli Lilly awaits an FDA decision on its oral GLP‑1 candidate orforglipron, expected in the second quarter of 2026. Conference commentary indicated that the global obesity market could reach around $150 billion by 2030, and Pfizer’s $10 billion acquisition of Metsera underscores the strategic importance of next‑generation injectables and oral combinations.^{[27][28][29][30][4]}

Eli Lilly reported that approximately one million people per month are purchasing GLP‑1 medicines directly through Lilly Direct, its direct‑to‑consumer platform, with vial formats sold via this channel already ranking as the second‑best‑selling obesity product behind Zepbound auto‑injectors. Novo Nordisk estimated that roughly 1.5 million U.S. patients are receiving compounded versions of Wegovy and Ozempic, which highlights ongoing revenue leakage despite federal efforts to restrict compounding. Executives and analysts noted that the next wave of competition will likely revolve around oral delivery to relieve manufacturing bottlenecks, extended‑release or low‑frequency dosing to improve adherence, strategies to preserve lean muscle mass, and sustainable maintenance regimens to address weight regain.^{[29][31][32][27]}

Key pain points:

5. China: competition, dependency, and de‑risking

At JPM 2026, China featured prominently as both a strategic opportunity and a structural risk in the biopharmaceutical ecosystem. Analyses shared around the conference highlighted that approximately one‑third of innovative medicines now originate from China, a significant increase compared to seven years ago when Chinese companies were primarily developing me‑too products. Early‑stage trials can often be run about 30 percent cheaper and faster in China, which has made the country an attractive location for first‑in‑human studies. At the same time, Chinese firms are emerging as formidable competitors in biologics, small molecules, and cell and gene therapies.^{[8][4][10][15][32][6]}

The U.S. BIOSECURE Act, enacted in December 2025, restricts federal procurement and grants involving biotechnology products or services provided by designated Chinese entities. This law aims to protect U.S. biotechnological infrastructure but also forces U.S. companies to reassess reliance on Chinese contract development and manufacturing organizations, resulting in complex technology transfers, supplier requalification, and capacity investments in alternative geographies. Research from the Carnegie Endowment suggests that Chinese biopharmaceutical firms are responding by deepening their presence in Southeast Asia, shifting segments of manufacturing and data operations to countries such as Indonesia, Thailand, Malaysia, and Singapore.^{[35][36][37][33]}

Key pain points:

6. Health system financial fragility and back to basics priorities

Provider executives at JPM 2026 emphasized margin stabilization, workforce sustainability, and operational fundamentals as primary priorities, with less appetite for unproven innovations. This pragmatism directly affects the adoption of new therapies and technologies, particularly those without clear near‑term economic or workforce benefits. According to recent reports, the healthcare landscape is being reshaped by rising demand from aging populations and chronic disease, persistent inflationary pressure, capital constraints, and uneven progress on care transformation, all of which increase the need for scalable, resilient operating models.^{[38][39][40][5][20]}

Hospital and health system margins have stabilized but remain thin, with greater variability across organizations and growing dependence on commercial payers alongside increasing Medicare exposure. Labor costs have settled at structurally higher levels, and shortages in key roles such as primary care physicians and nurses continue to strain operations. Meanwhile, physician burnout remains pervasive: multi‑country data suggest that around one‑third of primary care physicians report burnout, and multiple studies link electronic health record usability issues, alert fatigue, and administrative burden to higher burnout risk.^{[26][41][42][38][20][25]}

Key pain points:

7. Evidence, access, and real‑world outcomes expectations

At JPM 2026, payers, regulators, and investors consistently emphasized the need for robust real‑world evidence, clear value demonstration, and outcomes‑based narratives. This is particularly true for categories such as obesity, women’s health, cell and gene therapies, and longevity, where long‑term functional and economic impact is as important as traditional clinical endpoints. By 2022, more than half of U.S. payers reported at least one outcomes‑based contract, and expectation is growing that such models will expand if operational hurdles are addressed.^{[44][45][4][5][10]}

Prominent examples illustrate this shift. Novartis structured outcomes‑based contracts with Cigna and Aetna for Entresto, tying higher rebates to reductions in heart failure hospitalizations and mortality that match clinical trial benchmarks. Amgen agreed to refund some costs for Repatha if adherent patients experience major cardiovascular events under an arrangement with Harvard Pilgrim. Pfizer’s contract for Xeljanz links payment to defined improvements in rheumatoid arthritis disease activity within an agreed timeframe. These agreements depend on reliable data capture, agreed‑upon outcome measures, and alignment among manufacturers, payers, and providers.^[45][44]

Key pain points:

8. Women’s health and longevity: from niche to scalable franchises

Women’s health and longevity were highlighted at JPM 2026 as under‑served yet rapidly growing areas of opportunity. Silicon Valley Bank data indicated that women’s health venture investment reached approximately $2.6 billion in 2024, the highest figure recorded, with FemTech growing 55 percent year‑over‑year and expanding more than 160 percent faster than the broader healthcare sector. Biopharma‑focused women’s health plays now account for roughly one‑third of total category funding, signaling a shift from pure digital health and wellness toward regulated therapeutics and diagnostics. In parallel, U.S. federal initiatives have committed roughly $1 billion to women’s health research, and conference programming underscored the need for far stronger representation of women in clinical trials.^{[46][47][4][19]}

Despite clear momentum, investment and evidence gaps remain substantial. Women represent 51 percent of the population but have historically received less than 9 percent of NIH research funding, and women’s health captures roughly 2 percent of healthcare venture capital despite an estimated $360 billion addressable market. The World Economic Forum estimates that closing the women’s health gap could unlock about $1 trillion in annual global GDP by 2040, yet pipelines remain relatively thin in menopause, autoimmune disease in women, cardiovascular risk specific to females, and maternal health. Longevity science is also gaining visibility, but regulatory frameworks and endpoint expectations for aging as a biological target are still evolving.^[48][4][46]

Key pain points:

9. Technology and data partnerships: integration and risk management

Executives at JPM 2026 described a more sober, disciplined approach to technology and data partnerships following a decade of digital health exuberance and several high‑profile failures. Rather than celebrating pilots, leaders focused on risk frameworks, vendor due diligence, and the ability to monitor real‑world performance over time. Eli Lilly’s announcement of a $1 billion collaboration with NVIDIA to build an AI‑powered co‑innovation lab for drug discovery and development exemplified the shift toward treating AI infrastructure as a strategic, long‑horizon investment.^{[49][2][8][23][10]}

Digital health commentators noted that in 2026 the product is not only the AI model but also the governance package: compliance posture, data provenance, documentation, and alignment with evolving payer and regulatory expectations. Policy direction around interoperability and administrative simplification will be a major determinant of which digital health models scale. Kaiser Permanente reported deployment of 242 AI tools across its network, generating around $100 million in annual value through applications such as ambient clinical documentation, call‑center automation, and neuro‑emergency triage that cut door‑to‑treatment times by more than 40 percent across more than 50 sites.^[9][49]

Key pain points:

10. Organizational rewiring for multi‑horizon change

Finally, many organizations used JPM 2026 to communicate multi‑year transformation programs aimed at modernizing operating models, technology stacks, and incentive structures. Advocate Health’s Rewire 2030 initiative, showcased at the 2025 conference, has become a reference point for how large integrated delivery systems intend to reposition themselves for the next decade by aligning purpose, leadership, platforms, and AI‑enabled workflows. Executives repeatedly emphasized that strategy alone is insufficient without new governance mechanisms, cross‑functional decision rights, and upgraded execution capabilities.^{[50][51][3][5]}

KPMG’s long‑range assessments argue that incrementalism will not be sufficient for pharmaceutical companies facing patent cliffs, pricing pressure, and changing stakeholder expectations. Instead, they recommend establishing independent, CEO‑sponsored units that experiment with Pharma 2030 models across clinical development, commercial engagement, and data‑driven decision‑making. Uptake Strategies likewise highlights the importance of leadership role‑modeling, culture change, investment in adaptive capabilities, and embedding new ways of working while anticipating further disruption.^[52][48][50]

Key pain points:

Conclusion

The ten strategic challenges outlined here represent the core agenda for life science executives in 2026 and beyond, reflecting the issues that C‑suite leaders debated and prioritized at the industry’s most influential annual gathering. Capital remains available, but it is flowing only to demonstrable value. AI is moving from exploration to implementation, contingent on governance, interoperability, and measurable return on investment. Policy uncertainty is rising, yet leading organizations are building scenario plans rather than waiting passively for clarity. Health systems are financially fragile, but they are selectively investing in innovations that improve margins, workforce resilience, and patient outcomes.^{[7][54][24][11][38][39][8][20][22][3][4][5][6][10][23]}

For life science companies, sustained success will depend on disciplined portfolio management, robust evidence generation, patient‑centric commercial models, and the organizational agility to rewire operating models under pressure. The organizations that pull ahead will be those that translate strategy into measurable impact, harness technology to build differentiated capabilities rather than follow hype cycles, and forge partnerships grounded in shared value and execution discipline. In an environment defined by capital efficiency and operational rigor, the ability to connect clear strategic choices with credible implementation will be the defining competitive advantage.^{[55][56][57][58][51][7][39][49][9][50]}

References