This white paper identifies key areas of impact and outlines strategic considerations that the Procurement & Logistics group at IPS is monitoring. By proactively integrating these insights into organizational goals, IPS aims to adapt to the evolving political landscape and ensure effective project delivery aligned with client
February 2025
Kevin R. Batche Vice President, Procurement & Logistics IPS-Integrated Project Services
As we start 2025, changes in the presidential administration are anticipated to bring significant shifts in regulatory policies, economic strategies, and industry standards, particularly affecting the life sciences construction sector.
The potential implementation of policies such as the Most Favored Nation (MFN) drug pricing could influence the pharmaceutical construction sector. However, healthcare policy may not be as prominent a focus for the new administration. While some regulatory adjustments are possible, significant changes are not anticipated at this stage. IPS will continue monitoring developments to respond promptly if the regulatory landscape shifts.
The emphasis on domestic manufacturing, driven by onshoring initiatives and Buy America policies, is expected to spur the construction of new facilities. This shift presents opportunities for growth but may lead to increased costs.
Establishing strong ties with domestic suppliers to gain better pricing and material access. By utilizing a detailed framework for supplier evaluation, which includes criteria such as reliability, sustainability practices, and capacity for innovation, IPS ensures partnerships that align with its operational and strategic goals. For example, recent collaborations have demonstrated success in reducing lead times and stabilizing pricing through proactive engagement and shared forecasting tools.
Budgeting to account for potential cost increases and secure necessary funding.
Leveraging technology to reduce waste and accelerate timelines.
Incorporating energy-efficient methods to achieve long-term cost savings.
A rollback of prior administration regulations focused on climate change and sustainability could reduce compliance costs but may slow progress on environmental initiatives. Striking a balance between cost savings and sustainability benefits will be essential. IPS will work with clients to align project objectives with both economic and environmental considerations.
New appointments to key health-related agencies like the FDA and CDC may influence drug approval processes and regulatory oversight. These shifts could necessitate updates to facilities, potentially increasing construction costs. Conversely, relaxed regulations might lower expenses. IPS will remain flexible to navigate these dynamic changes effectively.
New tariffs and economic policies may lead to higher material costs and supply chain disruptions. These changes could affect project timelines and budgets. Tariffs on steel, aluminum, and lumber from countries like China, Mexico, and Canada will increase costs for structural components and other construction materials used in pharmaceutical facilities.
Supplier Diversification
Reducing dependency on single suppliers by establishing relationships with multiple domestic and international sources.
Bulk Purchasing
Securing materials before tariffs are implemented to lock in lower prices.
Pharmaceutical industry construction spending is projected to exceed $5 billion annually through 2025, with costs rising by 5–7%.
Strategic planning and budgeting will
be critical to managing these
financial challenges.
Local Sourcing
Avoiding tariffs, reducing transportation costs, and supporting local economies.
Including tariff-related contingencies in contracts and leveraging government incentives.
Geopolitical tensions and logistical challenges are expected to persist, affecting material availability and pricing. These disruptions could extend project timelines and raise costs. To mitigate these risks, IPS evaluates the domestic supply chain through thorough assessments and employs strategic sourcing to enhance resilience. By identifying potential bottlenecks and leveraging strong supplier relationships, IPS ensures consistent material availability while minimizing disruptions.
Supplier Networks:
Building relationships with multiple suppliers across regions to enhance resilience.
Technology Utilization:
Using advanced analytics to anticipate and respond to potential disruptions.
Exploring local options and publicprivate partnerships for steady material supply.
Preparing contingencies for supply chain challenges to minimize impact.
IPS is analyzing three-year lookahead regional workforce trends to address skilled trade shortages proactively. Labor deficiencies can be anticipated and addressed in advance utilizing numerous simple strategies.
We are acitvely attracting and retaining skilled workers through competitive benefits. Recognize that very few projects are being staffed on a 40-hour workweek basis. Skilled labor is being attracted to projects paying overtime on extended work hours as well as incentive bonuses for tradesmen that stay with the project.
The skilled labor shortage in construction, exacerbated by stricter immigration policies, is expected to increase wages and project costs. IPS conducts comprehensive regional labor studies to identify gaps and trends in project staffing.
By evaluating manpower availability across North America, IPS determines the specific trades accessible in each region and develops targeted solutions.
IPS is strengthening ties with construction staffing providers to ensure workforce reliability. We need to support our subcontractors with additional labor resources in disciplines where they are falling short. We are still looking for the core management resources to be in employment of the selected contractor, but we have found that their crew can be augmented with skilled labor and perform successfully.
We utilize prefabricated components to reduce onsite labor requirements and enhance quality. By utilizing off-site fabrication, normally site-based labor can be performed in regions non-impacted by those trade labor deficiencies.
Kevin Batche Vice President, Procurement & Logistics
The life sciences construction sector faces a complex and evolving landscape in 2025, shaped by changes in regulatory policies, economic dynamics, and industry trends. Challenges such as rising costs, supply chain disruptions, and labor shortages require a proactive and strategic approach to ensure successful project delivery.
IPS is committed to:
Agility: Adapting to regulatory changes and economic shifts.
Innovation: Leveraging technology to drive efficiency.
Collaboration: Fostering strong supplier and workforce partnerships.
By implementing these strategies, IPS can navigate uncertainties, capitalize on opportunities, and continue delivering exceptional value to clients while maintaining leadership in the life sciences construction industry.