2025 life sciences litigation trends

Securities class action (SCA) filings against life science companies increased 15% in 2024 over 2023 – a total of 50 cases, representing 22% of all securities class action lawsuits during the year. ^[1] In the same period, the broader D&O market has remained persistently competitive, with conditions tempered by pressures toward rate stabilization. Although reductions may still be available on a case-by-case basis, we anticipate the most likely renewal outcome for life sciences companies for the remainder of this year and into 2026 to be flat for stable risk profiles.

SCA trends in health technology and services

A NERA report^[2] identified ‘health technology and services’ as the second most sued industry in 2024 with 26% of all filings (ceding first place to electronic technology and technology services). The figures are consistent with past year results, with ‘health technology and services’ the second most sued industry since 2020, with a single year exception (2022) where it was the most sued industry.

Overall SCA filings were up year-on-year, with 225 filings in 2024, as compared to 212 filings in 2023.^[3] In the first half of 2025, there were 111 SCA filings, which annualized, would represent a similar filing rate as in recent years.^[4] Of note, however, there was a significant drop in filings in Q2 2025 (44 filings) as compared to Q1 (67). Of the 111 cases filed this year, 31 were against companies in the life science, biotechnology, pharmaceutical and broader healthcare sectors, reflecting a consistent pattern of more than 20% of overall filings. ^[5]

Key allegations and dismissal trends in life sciences SCAs

A breakdown of 2024 SCA filings against life science companies provides a deeper insight into the nature of these more recent claims.

• Approximately 52% of complaints involved alleged misrepresentations regarding product efficacy and safety, which could potentially impact the likelihood of Food and Drug Administration (FDA) approval.^[6]
• Approximately 34% of the complaints arose from alleged misrepresentations involving regulatory hurdles, the timing of FDA approval, or the sufficiency of applications submitted to the FDA.^[7]
• Another 34% of complaints involved alleged misrepresentations related to the company’s financial reporting. ^[8]
• Approximately 20% of the complaints involved alleged misrepresentations of material information made in connection with proposed mergers, sales, initial public offerings and other transactions.^[9]
• Approximately 57% of SCAs are related to the pre-approval phase of the product lifecycle (Phase 1, Phase 2, Phase 2/3, Phase 3, NDA, BLA, HDE and other), with the remaining 43% relating to post-approval (regulatory issue, sale performance, financial reporting and other). ^[10]

Data as to the success of life science companies at the pleadings stage of litigation reveal — consistent with recent prior years — that companies prevailed in disposing of cases a majority of the time:

• 2024: Companies won dismissal in 24 of 41 decisions issued by district courts (59%)^[11]
• 2023: Companies won dismissal in 17 of 25 decisions issued by district courts (68%)^[12]
• 2022: Companies won dismissal in 15 of the 29 decisions issued by the district courts (52%)^[13]
• 2021: Companies won dismissal in 19 of the 33 decisions issued by the district courts (58%)^[14]

Companies also had success in 2024 at the appellate court level, with courts affirming either the lower courts’ dismissal or grant of summary judgment in all eight cases.^[15]

Litigation risk outlook for life sciences

Our conclusions are twofold:

As an industry, the life sciences are experiencing a relatively consistent number of filings in raw numbers, yet they are sued more than almost any other industry as a percentage of overall filings. Looking ahead, the risks remain challenging, particularly for biopharma companies facing exposures with their role in drug pricing, drug and technology development and access to medicines, all at a time of data-driven approaches, greater collaboration and digital transformation. Macroeconomic conditions, from the potential for economic impacts of tariffs, as well as government funding cuts affecting life sciences companies, create possible challenges for a fast moving and innovative industry.

The headline of proportionately higher-than-average filings is offset by the higher success rate in dismissing these claims. Many SCAs are predicated on the purported failure of products to meet expectations either in terms of progress through development or of revenues derived. Often, such claims can be defended by robust risk factors and other disclosures in public filings.

D&O market conditions for publicly traded life science companies

• Rate environment: Initial indications from markets reflect a push for rate, especially on the primary and low excess layers. There may be potential justification and support for flat pricing, and maybe even modest decreases, on a case-by-case basis.
• While capacity continues to yield competition, several years of downward pressure on excess pricing means pricing is more static.
• D&O underwriter focus: Insurers are looking at financial strength (especially liquidity), environmental, social and governance (ESG) concerns, claim history, regulatory uncertainty, loss-cost escalation, cyber and privacy, event-driven claims and systemic exposures.
• Some buyers will be particularly challenged.
  • Non-U.S. parent with U.S. exposures
  • Companies with late-phase pipelines
  • Liquidity-challenged and pre-restructuring/bankruptcy risks
  • Artificial intelligence-exposed organizations
  • IPOs, de-SPAC business combinations
  • Companies that remain reliant on government funding
  • Companies with a focus on oncology drugs
• Notably, the full impact of tariffs and government funding cuts is yet to be seen.

Seizing opportunities: Securing renewal advantages requires continued discipline

• Start and finish early: Hold your broker and insurers to time commitments, and do not make decisions under duress. This may maximize the ability to make the most of existing market conditions and to stave off pressure on rate.
• Continued focus on coverage (“driving value in a stable environment”): Where insurers may be less able to agree to more favorable pricing, they may be amenable to differentiating their offerings with other areas of value, such as enhanced coverage, including, among other areas, the addition of entity investigations costs coverage and increased sublimits where feasible.
• Although overall market conditions have been favorable, biopharma remains an industry with less available capacity than others.
• Rely on a broker with analytical resources to help you identify the best retention, limit and structure.
• Meet with your insurers: Understand their specific concerns about your company and address them. Differentiate your risk.

Footnotes

1. Dechert LLP: Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies: 2024 Edition Return to article
2. National Economic Research Associates: Recent Trends in Securities Class Action Litigation: 2024 Full-Year Review Return to article
3. Cornerstone Research, Securities Class Action Filings: 2024 Year in Review Return to article
4. Stanford University, Cornerstone Research, Securities Class Action Clearinghouse, securities stanford edu Return to article
5. Stanford University, Cornerstone Research, Securities Class Action Clearinghouse, securities stanford edu Return to article
6. Dechert LLP: Developments in Securities Fraud Class Actions Against U.S. Life Sciences Companies: 2024 Edition Return to article
7. Id. Return to article
8. Id. Return to article
9. Id. Return to article
10. Sidley Austin LLP: Securities Class Actions in the Life Sciences Sector, 2024 Annual Survey Return to article
11. Id. Return to article
12. Id. Return to article
13. Id. Return to article
14. Id. Return to article
15. Id. Return to article