Global big pharmaceutical companies are accelerating overhauls by simultaneously pursuing large-scale restructuring and expanded investment in artificial intelligence (AI). With patents on drugs worth about $400 billion (about 597 trillion won) set to expire by 2036, they have begun in earnest to cut expense and streamline research and development (R&D).
According to the industry on the 19th, global big pharma companies are pushing to slim down their organizations while shifting to AI-centered research and development systems to brace for potential profitability deterioration from patent expirations.
◇ Takeda, Novo, Lilly all plan large cuts… AI transition
Japan's Takeda Pharmaceutical on the 15th unveiled a "transformation program" in its annual earnings announcement and said it will cut about 4,500 jobs by the 2026 fiscal year. The plan includes reducing 634 positions at its U.S. headquarters in Cambridge, Massachusetts. The company expects the restructuring to generate annual expense savings of more than 200 billion yen (1.26 trillion won) by 2028.
The reorganization will proceed in line with the inauguration next month of Julie Kim, a Korean American executive, as Takeda's next chief executive officer (CEO). Along with workforce reductions, Takeda plans to realign its business structure, including launching three new drugs by next year.
This trend is spreading across global big pharma. An analysis by IQVIA and the U.S. pharmaceutical trade outlet FiercePharma of 17 major drugmakers with annual revenue of $20 billion or more found they cut a total of more than 22,000 jobs over the past year.
The industry views this as a structural strategy to prepare for large-scale patent expirations through the 2030s. As blockbuster drug patents expire one after another, raising the risk of profitability erosion, companies are said to be shifting their business structures to reduce labor and operating expense while increasing AI adoption.
Major drugmakers are in fact expanding AI investment alongside layoffs. Denmark's Novo Nordisk announced a plan last September to cut about 9,000 jobs, targeting annual savings of about 8 billion Danish kroner (about 1.8538 trillion won). U.S.-based Merck (MSD) is also pursuing annual expense savings of $3 billion (about 4.4325 trillion won) by 2027 through restructuring affecting thousands of employees.
Switzerland's Roche reduced about 10,000 jobs worldwide through last year, and Novartis cut 8,000 positions, about 10% of its workforce. France's Sanofi also reduced more than 8,000 jobs during the process of reorganizing equity in its consumer health business.
At the same time, these corporations are ramping up AI-based research and development capabilities. MSD teamed up with Google Cloud to introduce "agentic AI," investing up to $1 billion, and Novo Nordisk signed an enterprise-wide AI adoption deal with OpenAI.
Roche is cited as the most aggressive investor. In March, Roche launched a "Hybrid Cloud AI factory," an AI supercomputing platform, with Nvidia. After securing an additional 2,176 of Nvidia's Blackwell GPUs, it is now operating more than 3,500 GPUs in total.
This is an ultra-large computing infrastructure to analyze complex cellular structures and discover new molecules that bind to specific targets, and it is considered the largest hybrid AI infrastructure in the pharmaceutical industry disclosed to date.
U.S.-based Eli Lilly and Company also announced in January plans to establish a $1 billion AI research institute. In February, it revealed plans to build a supercomputer called "LillyPad" based on more than 1,000 GPUs.
◇ Concerns about layoffs grow in Korea too… AI research and development capability still in its infancy
In Korea's pharmaceutical and biotech industry, signs are emerging of a spreading push for expense cuts and organizational efficiency. Some also warn that if the government's ongoing drug price reduction policy leads to profitability deterioration, job insecurity could become a reality.
In fact, according to a survey conducted in December by the Emergency Response Committee for Drug Price System Reform for the Development of the Pharmaceutical and Bio Industry on 59 pharmaceutical and bio corporations, the total number of employees at responding companies was 39,170. These companies said they would cut a total of 1,691 jobs if the drug price reform plan is implemented as originally proposed. That is 9.1% of their existing workforce.
By contrast with global big pharma, assessments say AI-based new drug development capabilities remain at an early stage. According to the Korea Pharmaceutical and Bio-Pharma Manufacturers Association (KPBMA), Korea ranks fifth worldwide in AI infrastructure competitiveness, but only 13th in specialized talent competitiveness that can apply it to actual drug development.
Industry voices also say Korea's pharmaceutical and biotech sector should not stop at simple expense cuts but must speed up a transition to AI-based research and development systems on par with global standards.
An industry source said, "Although the government emphasizes AI utilization, in reality AI adoption in the bio sector often remains at the level of automating document work," and added, "Like global corporations, we need to shift to applying AI and automation systems across research and development, including candidate discovery, clinical trials, and proof of concept (PoC)."