Christopher Cole

Saharsh Part 2

 recently spoke with Saharsh Davuluri, Vice Chairman and Managing Director, Neuland Labs, to get his perspective on trends that shaped pharmaceutical development and manufacturing in 2025 and where things are headed in 2026. In this part 2 of our three-part interview, Davuluri explores a digital transformation within the API manufacturing sector. He observes that while the API industry has historically been slower to automate than other chemical sectors, a new paradigm is emerging through the adoption of AI-based tools and digital workflows. He notes Merck’s Synthia tool for route synthesis and equipping a new R&D campus with advanced parallel synthesis equipment to better mimic plant-scale production.

Davuluri’s ultimate vision is a fully paperless manufacturing environment driven by electronic batch records and a manufacturing execution system, which ensures complete traceability and product quality. Davuluri highlights the practical impact of these advancements for the workforce, stating: "This is real, and this is something that's going to make life a lot easier for process chemists who are looking at making scalable processes when it comes to manufacturing."

Central to this transformation is a shift attracting and retaining scientific talent through fostering a "knowledge hub" in which scientists collaborate on innovative processes for new chemical entities. Unlike traditional roles that may feel academic, scientists in such an atmosphere are encouraged to go into the plants to oversee scale-ups, allowing them to see their designs evolve into actual medicine for patients. This focus on high-level expertise marks a significant departure from traditional industry models. Davuluri explains, "We are living in a world where it's no longer about labor arbitrage; it's about knowledge arbitrage."

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Editor's note: This transcript is a lightly edited rendering of the original audio/video content. It may contain errors, informal language, or omissions as spoken in the original recording.

We are starting to see that there is a clear trend in using digital tools and AI for process development and scale up, but especially when it comes to API process development, scale up and manufacturing. What we are seeing is adaptation of AI-based tools. I think there's a Merck tool called Synthia that Neuland’s been using now; helps us, you know, identify the most appropriate route of synthesis for making an API.

That's a tool that we've been using now for quite some time and, right now, Neuland's in the process of building a new R&D campus in Hyderabad. As part of our plan, we intend to equip all our labs with these parallel synthesis equipment called Mya 4 by this company called Radleys.

The idea would be to use Synthia as an AI tool for coming up with the right process and then use these automated synthesizers at lab scale, which actually do a fantastic job of mimicking plant scale manufacturing, and then use eLab notebooks to capture all the data from these modern lab equipments and essentially give us a fully prepared recipe with no human intervention, which is kind of locked and loaded to plug into a manufacturing execution system, or an MES, at plant scale. This is real, and this is something that's going to make life a lot easier for process chemists who are looking at making scalable processes. 

When it comes to manufacturing, I think there's a lot of interesting developments. You know, the API manufacturing sector has not automated or modernized as much as the other industries like chemical manufacturing has. It's time to kind of make some moves over there. So we are starting to see a better adoption of DCS systems in our manufacturing environment.

You know, our vision for Neuland would be to eventually move into a paperless environment where we would have a manufacturing execution system coming out of our ERP telling us what's the recipe, and then, you know, actually plug it in and get the entire manufacturing done through electronic batch records so we don't have any paper and there's complete traceability and the ability to kind of assure the quality of the product for the patients. I think some of these will take time, but I think there is a clear crystallization of how these tools can really help us start embracing modernization for API manufacturing.

There's always dearth of talent. And I think in light of these technological advancements, it's very important to figure out ways in which you can not only attract, but retain top talent, especially on the scientific side… try to create an ecosystem that nurtures scientific talent, try to create a knowledge hub where, you know, there's a lot of scientific learning other than just kind of, you know, the grind of delivering projects and getting stuff done. There's a lot of community-based scientific discussions, and we have a very interesting mix of scientists. Most of them are Indian, because we are based in India, but a lot of them are trained in different parts of the world, and therefore they approach science from a different perspective.

And we have a very open culture where we not only look at protecting IP, but within the framework of IP sensitivity, we also encourage this talent pool to exchange ideas on what might be an interesting way to crack a problem. A big part of what we do as a CDMO business, we spend a lot of time working with innovators, hand in hand, trying to develop novel, innovative processes for new chemical entities. And a big outcome of doing creative work over there is that our scientists get to put their names on patents, although these patents are attributable and owned by our customers, which is the, the pharmaceutical companies, the names of the authors are very frequently the scientists working at Neuland who have contributed to that IP. And that creates a very high level of attraction, especially in an industry, in an area, like India. There's a lot of generics business and, therefore, it creates an additional motivation.

The other thing I would say is, you know, there's a lot of emphasis on successful scale up and delivering product to the patient because Neuland is… you know, 90% of the work we do is commercial manufacturing, and therefore when a scientist wants to come and work for Neuland, they recognize that they are actually coming and working for a company that is likely to put a pill in the hands of a patient and not necessarily just doing work in the lab, which might seem academic at times.

So the ability for a scientist to go stand in the plant and oversee a scale up, that's something that does not happen in a lot of organizations. But we have started to encourage our scientists to go into the plants, oversee campaigns, learn from the engineering groups, learn from the manufacturing groups on how their process that they have designed is performing in the plant scale.

That is a unique exposure, which also stimulates a lot of scientists, and that's also something that helps us attract the right kind of talent. We are living in a world where it's no longer about labor arbitrage. it's about knowledge arbitrage. And we cannot operate in the old paradigm where… Neuland is located in India, which is a developing economy and therefore there are these labor arbitrage opportunities. I think that does not work anymore and therefore, you know, trying to get to a paradigm of knowledge arbitrage.

Videos

Saharsh Davuluri, Neuland Labs, discusses the move from labor to knowledge arbitrage for API manufacturers, using AI tools to empower scientists in process development.

Advancing Pharmaceutical Quality through Integrated Digital Systems and Collaborative Scientific Innovation

Remco Munnik, Arcana, details pharma's shift to data-first operations, AI adoption, and robust data stewardship.

The Evolution of Data-First Regulatory Operations

 recently spoke with Remco Munnik, founder and owner, Arcana Life Sciences, to get his perspective on trends that shaped pharmaceutical development and manufacturing in 2025 and where things are headed in 2026. Munnik, who has 25 years of experience in regulatory affairs, discusses the industry's "decisive, swift shift towards data-first regulatory operations.” Driven by initiatives from the European Medicines Agency, Munnik explains that the implementation of electronic application forms and product databases marks a turning point where "digitalization is no longer optional, but really a permanent fixture of regulatory practices."

A major focus of the discussion is the integration of AI. While the industry aims to use AI to automate document generation and enhance quality oversight, Munnik identifies significant barriers, including fragmented legacy systems and limited data standardization. He argues that successful AI adoption requires not just technical tools, but a robust data governance setup and a significant culture shift within organizations.

This digital evolution has also resulted in a widening skills gap. Munnik notes that the role of the pharmaceutical professional is changing; where they once focused on documentation, they must now act as data scientists capable of extracting insights from complex datasets. As Munnik describes the transition: "In the past, when you worked in pharma, you had to be a scientist, and the scientist then became an administrator to document everything." To bridge this gap, he advocates for on-the-job rotations and a leadership mindset that embraces inevitable change as a competitive advantage.

Looking toward 2026, Munnik emphasizes the need for investment in data-driven infrastructure to ensure traceability from the point of data creation to final registration. He highlights promising innovations, such as the work of the 

, which seeks to replace resource-intensive document submissions for lifecycle changes with direct database updates. These advancements, combined with 

upcoming European pharmaceutical legislation

, are set to redefine how the industry maintains compliance and achieves speed to market.


My name is Remco Munnik. I'm a consultant at Arcana. I started that company in July of this year. [I have] 25 years of experience in regulatory operations and regulatory affairs, a subject matter expert in electronic submissions.

In the regulatory operations space, I really saw a decisive, swift shift towards data-first regulatory operations. In Europe, the European Medicines Agency is really setting there the tone with the product database go live, which is also complemented by the rollout of processes that use data.

So, the electronic application form of shortage reporting. I think that really showed that digitalization is no longer optional, but really a permanent fixture of regulatory practices.

Across the industry, I think there's a strong desire to apply AI, whether to accelerate regulatory intelligence, automate document generation, or enhance quality oversight. And I think the challenge is not as to where to use AI but how to integrate it responsibly and effectively.

And I think the unresolved barriers to full [adoption] with AI, in practice, I see a lot of challenges still with data integrity and interoperability. So there's still fragmented legacy systems that are not connected, limited data standardization that hinders scalable AI and cross-departmental collaboration. I think that requires a robust data governance setup where roles and responsibilities are defined. And last but not least, I think it's also a talent and a culture shift. There's, from a talent point of view, people need AI skills. There might be an even digital maturity between departments, and change management is also really required to make sure that the AI can be scalable on an enterprise level.

I think there's a widening skills gap with digitalization. In the past, when you worked in pharma, you had to be a scientist, and the scientist then became an administrator to document everything. And I think what we see now is a shift that you need to be almost a data analyst or data scientist. So, still a scientist, but way more into data driven and really then extracting insights from complex datasets using statistics, machine learning, and data modeling.

I think here data governance and stewardship is key to bridge that gap, but I think best practices also from a selection, training on the job, learning on the job… so really embed the learning, on-the-job rotations, cross-functional team learning, I think that's very important. And last but not least, we also need a change perception within the leadership, because one thing that remains the same is change. So really embrace the change; it is inevitable, but try to leverage that as an advantage.

One of the most promising innovations that I've come across is the work that we have been doing at the Regulatory Optimisation Group. So this is a group that has been working with the European regulators to optimize life cycle management changes. So, traditionally, if somebody changes their name or address, you need to submit all kinds of documents, all kinds of submission to the regulators that needs to be assessed and processed. Now, this process is very time-consuming, resource-intensive, but also prone to inefficiencies. And what we've been now talking with the regulators [about] is also to submit this directly into a database. So, a name change, an address change, let's submit that directly into a database and everybody gets better because you have a cost efficiency, you have a quality improvement, everybody's informed at the same time, there's a speed to market, but also compliance, and I think that's really a win-win situation that we want to achieve.

In 2026, I still believe that companies need to invest quite a bit in data-driven infrastructure. So upgrade core systems, whether that's manufacturing execution systems or laboratory information systems, ERP platforms, how they are integrated with master data, but also regulatory data as part of IDMP. The linking between what is registered from a regulatory point of view and what is manufactured and marketed from a supply chain point of view will be a lot more important to capture. I think another investment is needed in governance [to] really have that clear traceability from the source where a data element is created until the submission and registration of the data element with the regulator there is important.

So, that's really important to define the data ownership across the functions, and I think last but not least, it's also the workforce enablement. Digital training needs to be standard, but also giving all the employees confidence with data standardization to really ensure that operators can interact and interpret fluently with standardized structured data.

I think one more thing in Europe that will be very important is the new European pharmaceutical legislation that will have quite an impact on the entire way of operating for pharma, but more to be shared in 2026 when the new pharmaceutical legislation draft is available.

Saharsh Part 1

 recently spoke with Saharsh Davuluri, Vice Chairman and Managing Director, Neuland Labs, to get his perspective on trends that shaped pharmaceutical development and manufacturing in 2025 and where things are headed in 2026. In this part 1 of our three-part interview, Davuluri examines the pivotal trends that shaped the global pharmaceutical industry in 2025. He identifies robust M&A activity as a primary development, highlighting how major deals—such as the Pfizer-Metsera and AbbVie GLP-1 agreements—are dissolving the traditional boundaries between therapeutic domains. Davuluri observes, "It does seem that the M&A trends point to what was typically considered to be certain domain areas for big pharma; I think they're all blending now."

The conversation also delves into the impact of the "Make-in-USA" movement, which has prompted a strategic re-evaluation of insourcing versus local outsourcing. These geopolitical shifts have led to a heightened focus on supply chain resilience and the local sourcing of raw materials. Davuluri points out that many customers are now moving away from Chinese suppliers to ensure a more secure, localized pipeline for API production.

Furthermore, the interview highlights a significant trend toward strategic inventory stocking as a means of de-risking the business. Davuluri notes that innovators are now holding up to six months of API stock and sometimes a full year of drug product inventory to prevent supply chain interruptions. He emphasizes the motivation behind these shifts, stating, "This is something that's being done in the interest of the patients, to make sure that there's no disruption because of these geopolitical issues."

Finally, Davuluri addresses the surge in Chinese pharmaceutical innovation, noting a record-breaking year for out-licensing deals that reached over $50 billion. As Western companies license these drugs, the industry faces new questions regarding where manufacturing will ultimately take place, especially for small molecules and peptides. Overall, Davuluri paints a picture of an industry in transition, balancing rapid innovation with the need for geopolitical stability.

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I think 2025 has been a very interesting year. I think starting with some of the insights that we heard about at the JP Morgan conference and then throughout the year, there have been quite a few interesting developments. Probably I would say number one is M&A. We've seen a lot of interesting deals happening.

The Pfizer–Metsera deal I think is really interesting. There's a lot of companies… AbbVie, a GLP-1 deal with a Danish company. It does seem that the M&A trends point to what was typically considered to be certain domain areas for big pharma, I think they're all blending now.

You no longer can say, AbbVie's no longer in this therapeutic area. I think that to me is one interesting development that needs to be taken note of. Obviously the, the make-in-USA conversations that are happening ever since president Trump came into office, I think that's definitely stirred the pot quite a bit in terms of what is big pharma strategy.

Are they gonna insource, are they gonna outsource from local companies? Obviously that's something that is an interesting development that, especially a company like Neuland, whose facilities are largely in India, I think it does have an impact. And, third I would say is, I think there is a substantially positive trend in the innovation that is happening in Chinese pharmaceutical companies.

I think the volume of Chinese out-licensing deals is on the rise. I believe last year was a record, almost $50 billion plus of out-licensing deals that the Chinese companies have done, mostly with Western pharmaceutical companies. That points to a question mark on where would these drugs get manufactured once licensed by the western pharmaceutical companies. So I guess these are some of the trends that I think directly impact a company like Neuland, which is in the CDMO space, largely interested in the space of small molecule and peptides.

We're seeing a lot of emphasis on local sourcing. There's definitely a higher level of insistence from our customers on trying to buy locally available raw materials, avoid maybe chemical manufacturers, suppliers out of China, just to ensure that there is a supply chain that is local and can make API.

There's also a lot of stocking happening, especially on the innovator side. Neuland works with a lot of big pharma companies who are making drugs which have been recently commercialized, APIs that are being made and we are seeing an increasing trend where our customers are telling us that they would not only like to see several months, sometimes six months, of API stock being held in their warehouses, but they're also looking at making drug product six months or one year worth of inventory. This is definitely a higher level of inventory buildup that we have seen companies talking about. I guess this is something, again, that's being done in the interest of the patients, to make sure that there's no disruption because of these geopolitical issues.

I think another trend emanating is for businesses also to diversify and de-risk. So we are seeing, and Neuland's not necessarily following the strategy, but we've seen a lot of companies, say in India, who have been talking about “Okay, we don't wanna be as reliant on the US business anymore. We are going to have a diversified business mix from other regions, say China. Japan, Latin America, etc.” So, these are some of the trends that seem to be emerging as a result of whatever little instability that we have started to see in the last year or so.

Saharsh Davuluri, Neuland Labs, covers M&A blending, geopolitical shifts, and supply chain de-risking in this look back at pharma in 2025.

Navigating Geopolitical Shifts, M&A, and Supply Chain Resilience

 connected recently with Manish Garg, PMP, PSM, the newest member of our 

 and principal engineer and associate director, Hikma Pharmaceuticals to look back and 2025 and ahead into 2026. Garg reflects on the forces that most reshaped the industry in 2025, from AI-driven R&D to the rise of personalized and high-value therapies. The discussion explores how companies are rethinking supply chains, manufacturing strategies, and digital capabilities to build resilience amid geopolitical and economic uncertainty. Looking ahead, the Garg also examines what will drive innovation in 2026 and how drug manufacturers should prepare their operations for the next phase of competition and growth.

PharmTech: What impacted the pharmaceutical industry the most in 2025?

Garg: The most impactful trends were the widespread adoption of AI in drug discovery (R&D), manufacturing supply chain and operation efficiency, the rise of personalized medicine, and the shift toward complex, high-value therapies. AI dramatically cuts costs and timelines for identifying new drug candidates by efficiently analyzing vast data, a significant improvement over traditional trial-and-error methods. Personalized medicine, leveraging genetic data to tailor treatments (especially in oncology), gained traction, offering more effective outcomes and transforming R&D strategies to focus on niche, high-value therapies.

How is the sector reimagining supply chains to protect against various global disruptions?

The sector is moving away from purely cost-efficient, just-in-time models toward building resilience through diversification and regionalization. Strategies include multi-regional sourcing to reduce dependence on single-country suppliers (e.g., beyond "China+1") and exploring nearshoring or reshoring manufacturing for critical APIs. Companies are also using advanced data analytics and strategic inventory management to anticipate shortages and minimize the impact of sudden disruptions or new tariffs. I noticed significant investment in expanding US manufacturing footprints, which supplies most of our US sales and positions companies well to mitigate the impact of potential US tariffs and geopolitical trade tensions.

What roles do AI and digital technologies play in accelerating drug discovery and manufacturing efficiency?

AI and digital technologies accelerate drug discovery by predicting molecular interactions and optimizing clinical trial design, while in manufacturing, they enable predictive maintenance and real-time process monitoring. Unresolved barriers to full adoption include issues with the quality and fragmentation of available data, the "black box" nature and lack of interpretability of some AI models for regulatory approval, and a significant shortage of professionals with combined AI and pharmaceutical domain expertise. Other significant barriers to full adoption include data silos and high upfront implementation costs.

How does the industry plan to maintain competitive advantage as margin pressures intensify?

The industry plans to maintain advantage by strategically focusing on high-barrier-to-entry products, such as complex injectables and biosimilars, and streamlining operations through enhanced R&D efficiency. Companies are also leveraging AI to boost R&D efficiency, enabling faster identification of novel, profitable drug candidates to fill pipelines depleted by patent expirations. Strategic mergers and acquisitions (M&As) are also being used to quickly acquire innovative pipelines and consolidate market share. At Hikma, we are investing significantly in our pipeline of differentiated products (e.g., respiratory and nasal sprays) and leveraging our strong presence in the MENA region to offset price erosion in the US generics market. Strategic M&A also plays a key role in acquiring new capabilities and expanding market share.

What will drive innovation and drug development in 2026?

In 2026, the primary drivers will be the advancement of generative AI for 

 drug design and the use of real-world evidence (RWE) in regulatory submissions. Generative AI will enable the design of more complex molecules faster, while RWE gathered from digital health technologies will streamline clinical trials and help prove product value in real-world settings. This convergence demands that we have robust digital foundations to capture, secure, and analyze this data effectively, a key area of focus for my IT and data teams.

How should drug manufacturers plan for facility, equipment, or other upgrades in 2026?

Drug manufacturers should plan for significant investment in upgrading existing facilities to become "smart factories," incorporating Internet of Things (IoT) sensors, robotics, and advanced automation to achieve Industry 4.0 standards. This includes integrating IoT sensors for real-time monitoring, advanced robotics, and cloud computing infrastructure to handle large data volumes. These upgrades are essential for improving agility, enabling the production of diverse product portfolios (from generics to complex biosimilars), and ensuring the robust data integrity required for enhanced quality control and regulatory compliance. Such investments are critical for long-term competitiveness and resilience against future operational challenges.

Articles

In 2025, the pharmaceutical industry was significantly reshaped by AI-driven R&D, personalized medicine, and high-value therapies. Companies are rethinking supply chains to enhance resilience against global disruptions, moving towards diversification and regionalization. AI and digital technologies are pivotal in accelerating drug discovery and manufacturing efficiency, despite challenges like data quality and expertise shortages. To maintain competitive advantage, the industry focuses on high-barrier products and strategic M&As. In 2026, innovation will be driven by generative AI and real-world evidence, necessitating robust digital foundations and smart factory upgrades.

Manish Garg, Hikma, reflects on how AI, resilient supply chains, and smart manufacturing are reshaping pharma today and beyond.

From AI to Smart Factories: How Pharma Is Preparing for 2026

2025 pharma disruption hinged on three themes: political pricing/tariffs, tough quality scrutiny (FDA warnings), and innovation vs. changing standards (patient focus.

Pharma Disruption in 2025: A Recap of Our Top 10 Articles

Diving through our top 10 articles of 2025, we found that the pharmaceutical industry was largely characterized by disruption, spanning from high-level politics to plant floor production standards, setting an intense stage for the coming year. The defining events of the year coalesced around three major themes impacting global biopharmaceutical operations.

The first major theme involved significant political intervention in drug pricing and regulation. The Trump administration aimed to force drug manufacturing back home by proposing a 

. This proposal compelled companies to make a critical decision: either build manufacturing capacity within the US or face massive costs. Pressure on drug pricing also intensified through the implementation of 

Most Favored Nation deals, a regulatory pricing mechanism that AstraZeneca agreed to

, becoming the second major player to sign on. Compounding this regulatory environment was substantial turnover and volatility at key federal agencies, including 

. These departures created considerable uncertainty and prompted questions regarding the future integrity of science-based policymaking in the US.

The second thematic area focused on heightened scrutiny of manufacturing quality and process controls. Regulatory oversight became much tougher, signaled by specific actions such as an 

FDA warning issued to a Novo Nordisk plant

 for recurring issues. The findings detailed in the warning were described as "incredibly specific," underscoring the intensified scrutiny. Such quality failures introduce significant risks to a company's reputation, drug approvals, and overall business operations. In response, the 

FDA issued new guidance mandating much stricter process controls

The final theme explored the clash between rapid innovation and changing standards. While innovation flourished, particularly in the 

 for liver disease, which experienced an "explosion," evolving regulatory landscapes presented new challenges. Key approvals for this notoriously difficult-to-treat condition were characterized as an absolute game changer. Conversely, a debate flared regarding TiO2 (titanium dioxide), an ingredient present in thousands of medications. 

 that while alternatives exist, none currently really measure up. Furthermore, a philosophical shift brought 

the patient’s voice into the regulatory process

, signaling a move toward a more holistic, patient-focused view of a drug's value.


Let's jump in. We're breaking down the biggest pharma tech stories that really defined 2025. We've boiled it all down to three huge themes that shaped the entire year for pharma, and really 2025 is all about disruption from politics to the plant floor and everywhere in between. So our first theme, it's all about how politics really shook up drug pricing and regulation.

A proposed a hundred percent tariff on imported drugs. Yeah, that was a huge move to force manufacturing back home. So companies had a big choice to make build in the US or get hit with massive costs. The administration also turned up the heat on pricing with so-called most favored nation deals, and it was a big deal when AstraZeneca signed on becoming the second major player to do so.

On top of that, you had this massive turnover at key agencies creating a ton of uncertainty. I mean, just look at this timeline. You can really see the volatility at the FDA and CDC. These departures raised some serious questions about the future of science-based policymaking in the us. Okay, let's switch gears.

Theme number two is all about manufacturing and quality under the microscope. Case in point, a Novo Nordisk plant got hit with an FDA warning for some recurring issues, and the findings were incredibly specific, which was a clear signal of much tougher regulatory scrutiny for companies. This stuff is a huge deal.

It risks your reputation, approvals, and the whole business. So in response, the FDA dropped new guidance that basically calls for much stricter process controls. Alright, our final theme, this one covers the clash between rapid innovation and changing standards. You wanna see innovation. The market for MSS treatments for liver disease is just exploding.

A few key approvals for this notoriously tough to tree condition. Were in absolute game changer. But at the same time, a big debate flared up over TI O2 an ingredient in thousands of medicines. And here's the problem, the European regulators found that, yeah, alternatives exist, but none really measure up.

We also saw a huge philosophical shift really bringing the patient's voice into the regulatory process. This quote says it all, it's a move toward a more holistic, patient-focused view of a drug's value. So when you put it all together, these three forces are what really define the pharma world in 2025.

This all sets a pretty intense stage for next year, leaving us with one big question. What's coming next?

PharmTech connected recently with Henrik Johanning, senior vice president, Quality & Strategy, Epista Life Science, to look back at 2025 and ahead into 2026. Johanning details major European regulatory and manufacturing trends transitioning from 2025 into 2026, focusing on the operationalization of modern quality risk management (QRM) and tangible upgrades required for facilities to achieve sustained compliance with European Union (EU) good manufacturing practice (GMP) Annex 1. The conversation explores the rising expectations for digital Good Manufacturing Practice (GMP) driven by Annex 11 and Annex 22, the reconfiguration of supply chains due to geopolitical factors, and the ongoing convergence of global standards under International Council for Harmonisation (ICH), Pharmaceutical Inspection Co-operation Scheme (PIC/S), and EU GMP.

PharmTech: What trends are shaping the transition from 2025 into 2026?

Johanning: From a European regulatory and manufacturing perspective, several converging trends stand out:

 following ICH Q9. Companies are moving from theoretical risk assessments toward genuinely risk-based prioritization of controls, remediation, and capital investment.

 Many sterile facilities are discovering that procedural compliance is insufficient; sustained compliance requires tangible upgrades to contamination control strategies, facility design, and utilities, particularly water and HVAC-systems.

, driven by EU GMP Annex 11 and Annex 22.

Annex 11 is driving stronger expectations around lifecycle management of computerized systems, data integrity, supplier oversight, and continued validation in increasingly complex and cloud-based IT architectures.

Annex 22 reinforces that digital tools, automation, and data used across development and manufacturing must be governed under the pharmaceutical quality system, with clear roles, accountability, and traceability from development into commercial production.

 is accelerating as manufacturers respond to geo-political uncertainty, rising tariffs, and single-source dependencies. We see increased focus on regionalization, dual sourcing, and closer alignment between manufacturing footprint decisions and global regulatory convergence under EU GMP, ICH, and PIC/S.

Continued convergence across EU GMP, ICH, and PIC/S

, resulting in less tolerance for regional interpretation gaps, particularly during inspections of global manufacturing and supply networks.

What trends do you see in AI and digital technology?

AI and advanced analytics are already improving efficiency in such areas as process monitoring, deviation handling, and documentation.

The main barriers to broader adoption are regulatory and organizational rather than technical (Figure): non-GMP-ready data, uncertainty around how to validate and govern AI/ML within Annex 11 expectations, and a shortage of hybrid profiles combining quality, engineering, and data expertise.

What trends do you see in pharmaceutical professional skills and talent?

Digitalization is widening the gap between traditional GMP roles and newer automation- and data-driven roles.

Leading organizations are investing in structured upskilling linked to concrete initiatives (e.g., manufacturing execution systems, continued process verification, digital quality management systems), developing hybrid quality, engineering, and data profiles, and using clearer career pathways as a retention lever.

What trends do you see in facilities, competitiveness, and sustainability?

Margin pressure, patent cliffs, and pricing reforms are forcing tighter alignment between network strategy, quality risk, and capital expenditure decisions. Sustainability is increasingly shaping facility and process design, especially HVAC, water systems, and cleaning strategies, where environmental performance, operational robustness, and cost efficiency are beginning to converge into the same business case.

What should pharma manufacturers plan for in 2026?

Manufacturers should prepare for regulatory-driven digitalization under Annex 11 and Annex 22, continued modernization of legacy sterile and biotech facilities, and a shift from isolated IT or engineering projects toward integrated people, process, technology programs, with QRM, data integrity, lifecycle governance, and supply chain resilience built in from the outset.

European regulatory and manufacturing trends are evolving, with a focus on modern quality risk management and compliance with EU GMP Annex 1. The transition from theoretical to risk-based prioritization is emphasized, alongside the need for tangible facility upgrades. Digital GMP expectations are rising, driven by Annex 11 and Annex 22, necessitating robust lifecycle management and data governance. Geopolitical factors are prompting supply chain reconfiguration, while global standards are converging. AI and digital technology adoption face regulatory and organizational barriers, and digitalization is reshaping pharmaceutical professional skills and facility design.

Henrik Johanning, Epista Life Sciences, takes a European perspective on what will be required of pharma developers and manufacturers in 2026.