As if inventing life-saving treatments and getting them to patients wasn’t hard enough, today’s pharma leaders need to be geostrategists and diplomats of the highest caliber.

There are important differences between geopolitical risks and the normal financial and operational risks that every smart company manages regularly. Geopolitical risk is external, and companies have little control over it—but the scale of impact can be high. The impacts can be systemic and global and represent an abrupt paradigm shift in the business environment. These risks can challenge a company’s core strategy.

A new order

The last two decades were defined by hyper-globalization in pharma: speed and efficiency over redundancy, cross-border manufacturing and shipping, just-in-time inventories, and reliance on one or a few approved suppliers for active pharmaceutical ingredients and other ingredients. That model was underwritten by a relatively stable geopolitical order that kept trade lanes open and encouraged regulators to align.

The global order has shifted. Many companies today find themselves at the white-hot intersection of global politics, economic competition, and national security policy. The list of geopolitical risks facing the industry is long and growing—supply chain dependencies on China and India, sudden changes in the pricing environment, tariffs and sanctions, regulatory divergence, ongoing armed conflicts, and evolving cyber threats.

Just in 2025, we have seen a US Section 232 review of pharmaceuticals and renewed tariff threats; a threatened 100% tariff on branded drugs later paused amid negotiations; the EU’s pharma-law overhaul to address shortages; India’s export-rule changes; Chinese actions targeting certain companies; and a US government shutdown disrupting work at agencies that companies rely on for approvals and other regulatory oversight.

This isn’t a news cycle to react to; it’s the operating context to lead through. In this environment, companies must treat volatility as constant and resilience as a core capability.

Implementing a geopolitical risk framework

In today’s environment, how can leaders steer their organizations to work in a way that addresses volatility as a core design feature? Here are some practical thought starters to help you begin this journey.

1. Rigorously map geopolitical risks and monitor them continuously. Geopolitical risk deserves special attention, and outside expertise may be necessary to help companies determine the likelihood and impact of major events, including low-probability “tail risks.” Continuous monitoring of public and non-public information is critical. Proactive government affairs engagement can yield important information and sensitivities. Companies can also work with partners and their competitive-intelligence teams to surface updates. A robust geopolitical risk dashboard should be created and kept rigorously up to date.

2. Make geopolitics an enterprise discipline. Today’s operating paradigm calls for clear senior ownership and regular time on the executive team and board agendas. A major geopolitical risk event can affect every corporate function—IT, HR, R&D, manufacturing, procurement, legal, compliance, sales, and others. Cross-functional engagement in scenario planning and senior level oversight are critical to real preparedness and resilience.

3. Engage is rigorous scenario planning and identify early warning signs.
CEOs should demand real scenario planning for a wide range of high impact shocks, recognizing that multiple shocks can occur at the same time or in quick succession, and one shock can often intensify another. Tariffs can beget export controls and other retaliatory sanctions at the same time that a strike disrupts a major port. Rigorous scenario planning for worst case situations will not only help identify proactive steps to strengthen resilience before a crisis hits, but also those “no-regrets moves” that should be deployed at the beginning of a crisis and the escalation triggers that should be followed in deploying mitigation strategies.

4. Practice, practice, practice. Table-top exercises and crisis simulations are important tools. Many companies, however, do them just once a year (if that) and include mainly mid-level executives. More is necessary to build institutional resilience.

5. Consider ways to influence policy decisions. Governments often rely on business expertise to help bring policy goals to life in ways that will positively impact patients and public health. Companies that are not already actively engaged in policy debates should consider ways to get involved—such as through trade associations, industry coalitions, and/or direct engagement with policymakers at all levels.

When borders become bottlenecks, leadership—not luck—keeps medicines flowing to the patients that need them. The companies that adapt these new practices will find new opportunities in the changed landscape. This isn’t a crisis posture; it’s a design principle—one that companies will all need to adopt to thrive in this new era.

Geralyn Ritter is President and CEO and Monica Gorman, PhD, is Managing Director; both of Crowell Global Advisors, a global government relations, public policy, and public affairs consultancy