How Regulatory Affairs are Changing and What to Look Out For in 2025
Change is nothing new in the life sciences industry, but today’s regulatory environment is changing more rapidly than ever. With the rapid pace of new technologies, shifting global health priorities and growing concerns about sustainability, pharmaceutical, biotechnology and medical device companies are bracing for a sea change in the way business gets done.
Companies will need to adopt forward-looking strategies to navigate this complex landscape effectively. So, what can be expected in 2025? Here’s a closer look at the trends, changes and how to stay ahead.
Big Trends Shaping the Future of Regulation
1. The Rise of Digital Health and Artificial Intelligence
While digital health and AI/ML-based technologies are booming, they also introduce new challenges for regulators: how to establish a framework for innovations like adaptive algorithms, real-time data monitoring or advanced analytics that keep up with the pace.
- What’s happening? The FDA approach toward AI/ML in SaMD focuses on transparency, algorithm validation and lifecycle monitoring [i]. Similarly, the new EU MDR encompasses digital tools within its scope. (ii)
- Why it matters: Companies must be highly rigorous in the validation of their AI models and compliant with monitoring and data governance. Collaboration with regulators during the development phase can also help streamline approval processes for cutting-edge technologies. It’s not about having the tech, it’s about proving it works safely.
2. Harmonisation vs. Regional Specifics
Efforts like the International Council for Harmonisation (ICH) try to bring uniformity in regulatory requirements globally. However, regional differences cannot be completely avoided.
- Real-World Example: While China’s NMPA has fast-tracked clinical trials, it exercises rigorous post-market surveillance (iii). Meanwhile, both the US and EU have taken different paths toward value-based healthcare systems.
- Industry Insights: “Tailoring regulations by regional needs is inevitable globally; diversity in healthcare faces few alternatives,” said Janet Woodcock, FDA’s Principal Deputy Commissioner. Striking a balance between global harmonization and regional autonomy will be key for fostering innovation across markets.
3. Sustainability Is a Regulatory Priority
Sustainability is no longer optional; it’s being baked into regulations. The European Deal is driving this change, making it necessary for pharmaceutical companies to cut down on emissions and handle responsible drug disposal. (iv)
- The stats: Pharmaceuticals account for 4% of the EU’s total industrial greenhouse gas emissions.
- What companies need to do: It is a question of survival, with sustainable manufacturing practices, overhauling supply chains and compliance with environmental impact assessments being key to remaining ahead. Exploring green technologies, such as renewable energy-powered facilities, can also significantly reduce environmental footprints.
Regulatory Changes Coming in 2025
1. New Standards for Clinical Trials
Decentralized clinical trials (DCTs) – virtual site visits and remote monitoring – saw a huge uptick during the pandemic. Now regulators a codifying standards to ensure consistency.
- What’s next? The FDA and EMA are expected to finalize guidelines for remote technologies and digital data collection by 2025. v
- Impact: This would imply upgrading digital infrastructure in such a way that it enables companies to collect and manage patient data safely without breaching regulatory requirements. Focusing on patient-centric approaches, such as real-time feedback systems, will also enhance the overall effectiveness of DCTs.
2. Value-Bases Pricing of Drugs
Now, governments are making efforts to link drug prices much more aggressively with real-world value, particularly focusing on affordability and access.
- The Numbers: Deloitte predicts that by 2025, value-based pricing models will be adopted in 60% of major markets. (vi)
- Implications for Companies: Companies will need to show solid evidence of cost-effectiveness and real-world outcomes to support pricing. In addition, partnerships with healthcare providers can help gather robust real-world data for demonstrating the value of therapies.
3. Improved Post-Market Surveillance
Big Data and real-world evidence (RWE) have become central to how regulators monitor the safety and efficacy of products post-approval.
- Cast Study: Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) utilizes RWE frameworks to monitor long-term safety.
- What this means: Companies must integrate real-world data collection into product strategies to remain compliant and improve their offerings. Investing in advanced analytics tools can also help companies extract actionable insights from real-world data, boosting both compliance and innovation.
How to Stay Ahead in a Rapidly Changing Environment
1. Build a Strong Regulatory Intelligence Team
Knowledge of global regulations is not an option but a necessity. Be it through in-house teams or partnerships with intelligence providers, monitoring changes becomes imperative.
Staying proactive rather than reactive allows companies to anticipate shifts and adapt quickly.
2. Collaborate Early with Regulators
Regulatory authorities are increasingly open to collaborating at an early stage. Engaging them early within the development cycle can aid in easier approvals, particularly for innovative therapies.
The collaboration fosters trust and ensures that regulatory expectations are met seamlessly.
3. Embrace Technology to Ensure Compliance
AI-powered compliance tools will automate very time-consuming processes like the preparation of dossiers with minimal errors. The right investments in technology today will go a long way in mitigating regulatory burdens tomorrow.
Blockchain technology is emerging as a reliable tool for enhancing transparency and traceability in compliance processes.
4. Double Down on ESG and Sustainability
It isn’t just a question of compliance; in fact, there are real commercial benefits from incorporating environmental, social and governance principles into operations.
According to McKinsey, companies with strong ESG performance enjoy 20% higher valuation multiples than their counterparts. (vii) Embedding ESG into corporate culture can also help attract top talent who value sustainable practices.
5. Strengthen Cybersecurity
With digital health growing, so are the risks. Strong cybersecurity, according to Lloyd’s Register, is an essential element in protecting patient data and intellectual property. (viii)
Regular cybersecurity audits and training can further safeguard critical digital assets against emerging threats.
Looking Ahead: 2025 and Beyond
By 2025, the regulatory environment will be more complex than ever as innovation is balanced by accountability. Companies embracing this change – through technology, sustainability and collaboration with regulators-will emerge stronger.
As Dr. Margaret Hamburg, former commissioner of the FDA, aptly noted, “Regulatory frameworks must evolve with scientific innovation so progress reaches patients safely and efficiently.” The integration of cutting-edge compliance tools with operational strategies can further solidify a company’s readiness for the future.
The time for life sciences organizations to get ready for this changing landscape is now. Waiting too long risks being left behind in an industry where compliance is not an option, and innovation is the lifeblood of survival.
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[ii] https://health.ec.europa.eu/medical-devices-sector/new-regulations_en
[iii] https://english.nmpa.gov.cn/2024-05/11/c_986570.htm
[viii] https://www.lr.org/en/services/classification-certification/cyber-resilience/