How the Middle East conflict is impacting the life science industry

What parts of the life science sector are most affected by the Middle East conflict?

“Globally, the most affected segments are those that rely on complex, cross-border supply chains, particularly products that are time-critical or temperature-sensitive. These include biologics, vaccines, oncology treatments, insulin, and GLP-1 therapies, as well as certain high value medical devices that depend on specialized components.”

“From a regional perspective, Europe and Asia are more exposed than other regions. Europe is highly dependent on imported APIs and intermediates, while Asia produces a large share of these inputs and relies on uninterrupted export routes. Any disruption to trade through the Strait of Hormuz and other transit corridors in the Middle East therefore affects both regions disproportionately.”

In terms of companies, API importers, biotech firms with limited inventory buffers, contract manufacturers, and specialized medtech suppliers are more vulnerable.

“In terms of companies, API importers, biotech firms with limited inventory buffers, contract manufacturers, and specialized medtech suppliers are more vulnerable, as they lack the flexibility to adapt to transport delays and higher logistics costs, in contrast to large, diversified life science groups like AstraZeneca, Roche, and Sanofi. For the large European life science groups, the disruption is evident mainly through higher logistics and input costs rather than direct supply disruptions, reflecting their diversified manufacturing bases and operational resilience.”

“For patients, the impact is most visible for those relying on time-sensitive or cold-chain-dependent treatments, where delays can disrupt treatment schedules, even when medicines remain available generally.”

In Europe, the conflict is primarily reducing financial flexibility rather than disrupting production.

What effects have you seen when it comes to the European life science industry?

“In Europe, the conflict is primarily reducing financial flexibility rather than disrupting production. Pharma, biotech, and medtech manufacturing continues, but higher freight, energy and input costs are squeezing profit margins.”

“Europe is particularly exposed because it remains structurally dependent on imported APIs, chemical intermediates, and specialized components, the transport of which depends on shipping and air freight disrupted by the conflict in the Middle East. As transport routes lengthen, logistics costs and working capital rise.”

Describe the potential consequences on Europe’s life science industry if the conflict is prolonged? What kind of companies are most at risk?

“If the conflict is prolonged, its impact would become increasingly relevant in terms of credit for parts of the European life science sector. Higher logistics and energy costs would accumulate alongside existing pressures such as loss of exclusivity cycles, rising capital expenditure, and sustained R&D intensity.”

If the conflict is prolonged, its impact would become increasingly relevant in terms of credit for parts of the European life science sector.

“The companies most at risk are smaller pharma and biotech firms, API manufacturers, contract drug developers and manufacturers, and specialized medtech suppliers. These companies tend to operate with slimmer margins, are more exposed to volatile energy costs, and have limited pricing power. In practical terms, the pressure would be felt less through immediate supply shortages and more through margin erosion, higher working capital and weaker cashflow, putting strain on balance sheets over time.”

Do you know anything about the consequences on the healthcare system in the Middle East? How is access to medicines affected in these countries?

“The impact on healthcare systems varies across the Middle East, depending on income level, import dependence, and exposure to the various conflicts in the region. Most countries rely heavily on imported medicines, biologics and medical devices, making them sensitive to transport disruption and higher logistics costs.” 

“In countries affected by conflict or where incomes are lower, disruptions translate more quickly into delivery delays, higher prices, and pressure on hospital inventories, particularly for essential and temperature-sensitive medicines. In these settings, logistics reliability matters as much as physical availability. In wealthier countries, including those in the Gulf, medicine access generally remains intact, but healthcare systems face higher procurement costs and longer lead times as air freight is rerouted, and insurance and fuel costs rise.” 

Overall, the region is not immediately likely to experience widespread drug shortages, but faces the strains of reduced reliability, higher costs, and growing operational challenges, particularly in areas with fragile healthcare systems.

“Overall, the region is not immediately likely to experience widespread drug shortages, but faces the strains of reduced reliability, higher costs, and growing operational challenges, particularly in areas with fragile healthcare systems – particularly those in war zones such as Gaza, southern Lebanon, Sudan, Yemen, and inside Iran.”