Prices, pipelines and patent cliffs: Inside pharma’s big reset

This earnings season, Europe’s biggest pharma companies posted results ranging from 7% beats to 3% misses — but no one really cared.

Instead, drugmakers looked ahead, with 2026 shaping up to be a defining year following a dramatic 2025, and one where the impact from last year’s developments is set to crystallize.

“2025 was about understanding kind of the rules of the future of the game… what’s still to be seen in [2026] is how those companies actually implement what they agreed to, particularly in the deals that you saw with the Trump administration,” McKinsey Senior Partner Greg Graves told CNBC.

In addition to political dealings, companies are facing a so-called “patent cliff” in the upcoming years, where some of the world’s best-selling drugs lose exclusivity in key markets, exposing them to competition from much cheaper generics.

While drugmakers are always to some extent touting their pipelines, they’re now putting them even more on display as they seek to reassure investors that their pipeline holds enough promise to offset upcoming patent expiries.

“With the scale of the patent losses that are coming up over the next few years, you probably are hearing a bigger focus on the optimism for the future, as opposed to near-term delivery,” Graves said. 

Novartis CEO Vas Narasimhan, for example, told CNBC’s “Squawk Box Europe” last week that his company is about to lose $4 billion in sales and nearly as much in profits only in the first half of this year, marking “the largest set of loss of exclusivities in Novartis’ history.” 

In the same breath, he highlighted that due to “great growth drivers” and a “strong pipeline,” they are still able to grow.

AstraZeneca appears to be equally confident in its pipeline, boasting potentially 25 new blockbuster medicines by 2030, when it also hopes to reach $80 billion in revenue, up from the $59 billion seen in 2025.

Many companies are also emphasizing the importance of their business development strategies as they are increasingly looking to M&A to help them find the next blockbuster drug. 

The phrases “strategic fit” and “bolt-on deals” have become go-to lines for the CEOs. 

While some companies are targeting smaller acquisitions and early-stage assets, others are open to bigger, late-stage deals to bridge the gap, Camilla Oxhamre, portfolio manager at Rhenman & Partners, told CNBC.

While companies can fill that revenue gap by developing drugs internally, going on a shopping spree often yields faster results. 

Sanofi’s CEO Paul Hudson learned that the hard way as his tenure as CEO came to an abrupt end on Thursday, closing out a six-year reign at the French company, during which his emphasis on R&D had failed to deliver speedy results. Sanofi has yet to respond to CNBC’s request for comment on Hudson’s departure.

Belén Garijo, currently CEO at Merck KGaA, will replace Hudson with the mandate to “strengthen the productivity, governance, and innovation capacity…