Big pharmaceutical companies are undergoing significant restructuring while increasing their investments in artificial intelligence (AI) to prepare for a looming patent cliff that could impact nearly $400 billion in drug revenues by 2036. This dual strategy includes job cuts and a shift towards AI-driven research and development (R&D) systems to mitigate potential profitability declines.
Major players like Takeda, Novo Nordisk, and Merck are at the forefront of this transformation. Takeda recently announced plans to eliminate approximately 4,500 jobs by 2026, aiming for substantial cost savings. Similarly, Novo Nordisk has targeted a reduction of around 9,000 positions, while Merck is pursuing a $3 billion annual savings goal through workforce restructuring. These layoffs are part of a broader industry trend, with a reported total of over 22,000 jobs cut across 17 major pharmaceutical companies in the past year.
Alongside these workforce reductions, the pharmaceutical sector is heavily investing in AI capabilities. Roche has launched a large-scale AI supercomputing platform in collaboration with Nvidia, while Eli Lilly is establishing a $1 billion AI research institute. These initiatives underscore a strategic pivot towards enhancing R&D efficiency and drug discovery through advanced technology.
In contrast, South Korea's pharmaceutical and biotech industries are lagging in AI adoption, despite recognizing the need for efficiency improvements. A recent survey indicated potential job cuts in response to government drug price reforms, highlighting concerns over job security. Experts stress that Korea must accelerate its transition to AI-driven R&D to remain competitive globally, moving beyond mere cost-cutting measures to integrate AI throughout the drug development process.