Life sciences companies are entering a new era of capital intensity. The life sciences industry’s capital expenditures grew 13 percent per year from 2022 to 2024 as biopharma and medtech firms committed tens of billions of dollars to expand production capacity and improve supply chain resilience, particularly in the United States. This surge in investment was also spurred by breakthroughs in messenger RNA (mRNA), cell and gene therapies, new large-scale drugs such as GLP-1s, and efforts to localize supply chains in response to changing policies and an uncertain macroeconomic and geopolitical landscape. The industry’s growth trend is expected to continue: Firms have announced more than $150 billion in new capital projects before 2030 (Exhibit 1).
But capital alone doesn’t drive outcomes, and many life sciences companies lack strong, integrated capabilities in project management, talent strategy, and capital project delivery to help them get the most out of their investments. Furthermore, many life sciences companies have focused only on one major capital project at a time. Today, they must execute multiple complex programs in parallel, juggling long lead times for items such as transformers and complex process equipment with skilled-labor shortages as they compete for talent both inside and out of life sciences. Indeed, as other industries continue to invest in capital projects, there will be increased competition for skilled labor, specialized equipment, materials, and other resources.
As a result, many life sciences companies may not be ready to leverage this influx of capital efficiently and effectively. This can have a significant financial impact: In a ten-year net-present-value (NPV) calculation of a company launching a $2 billion product, for instance, even a six-month delay could cause the company to miss out on more than $750 million in NPV.
Life sciences companies for which time to market is a critical capability can embrace a time-based capital strategy. In this article, we discuss four capabilities that could decrease risks and costs while enabling companies to deliver faster and more reliably on projects: schedule-first project management; strong strategic procurement and contracting models; improved commissioning, qualification, and validation (CQV) readiness; and a fully integrated delivery capability and talent strategy.
Life sciences leaders who prioritize capital excellence could generate stronger financial outcomes and increase their ownership over the product life cycle, all while bringing life-saving medicines and therapies to market—and patients—sooner.
Barriers to effective and efficient delivery for life sciences capital
As the flow of capital to the life sciences industry accelerates and companies undertake multiple capital-intensive projects, many industry leaders face barriers to capturing value at speed. Life sciences companies face three unique capital delivery challenges that can lead to delays and budget overruns (Exhibit 2).
Traditional approaches to capital project delivery. Many companies still view capital delivery through a transactional lens. They may look to cut features, downsize the scope, pressure contractors to contain spending, or try to pass most of the risk onto contractors. Such companies need to shift their mindset to see that capital is a strategic investment tied to product life cycle impact, rather than one-time spending to accelerate delivery.
Gaps in internal capabilities and talent. Even when capital is available, execution delays and scope creep can dilute returns. Without stronger internal capabilities in project management, scheduling, and field execution, increasing capital spending won’t translate to faster, better outcomes. Many life sciences companies have chosen not to build capital expenditure capabilities because of the lumpy nature of capital expenditure spending—and they’re unsure of what to do with those capabilities once projects are complete. But a survey of leaders in the life sciences industry found that the top drivers of delivery gaps are sourcing internal talent through limited pipelines and outsourcing core expertise such as construction management and oversight to external partners (Exhibit 3). For example, companies often end up relying on engineering, procurement, and construction management partners to help deliver projects. Additionally, the labor shortage for skilled trades is a growing risk that will affect timelines and costs.1
ROI compression. While cost remains important, speed is now the critical driver of value. Organizations need to manage time, cost, and risk as an integrated system, and they need to develop capabilities that enable them to deliver on all three.
Life sciences firms need to move beyond simply spending more; they need to develop the integrated capabilities to improve delivery speed and assurance without increasing risk or cost variability.
Embracing a time-based capital strategy
For many high-margin life sciences companies, speed to market often matters more than cost; each month of delay can mean lost revenue, reduced patient access, and a weaker competitive position. To compete in this environment, companies need to rethink how they deliver capital projects—focusing not only on spending less but also on increasing speed and dependability. Some other industries with heavy capital experience have already moved in this direction (see sidebar “Capital excellence in the specialty chemicals industry: A case example”).
The upside is substantial. Best-in-class capital delivery can increase ROIC by four to eight percentage points. Consider a $500 million facility delivering a product with $1 billion in annual cash flow at an 80 percent gross margin: Launching just one year earlier can unlock $600 million in additional EBIT and materially uplift enterprise value.
Achieving this requires more than isolated project wins. It demands institutionalizing capital excellence and embedding capabilities that scale. The most effective organizations are integrating four capabilities that consistently drive speed, control, and sustainable value creation across their capital portfolios (see sidebar “One step further: Additional actions to support capital delivery”).
1. Adopting a schedule-first project management mindset
A schedule-first approach both tracks and drives progress. When fully embedded, this approach becomes a powerful lever to compress timelines, accelerate value capture, and increase ROI. Life sciences companies can take several actions to implement this approach.
Treat the schedule as the operational backbone. In most capital projects, the schedule is treated as a passive reporting tool (provided by contractors) that is updated periodically but rarely drives critical decisions. High-performing life sciences organizations flip this mindset. They treat the integrated master schedule (IMS) as the operational backbone, which aligns all functions—including design, procurement, construction, and CQV—on a single, authoritative plan.
Embed schedulers early to influence upstream decisions. Execution starts by embedding experienced schedulers by the conceptual design phase so teams can influence sequencing, resource planning, and lead-time assumptions early in the process, before they become permanent.
Use generative tools to simulate and optimize. Players that are more advanced go a step further by using generative scheduling platforms to simulate execution paths, identify acceleration levers, and model trade-offs dynamically. For example, a biologics expansion team used generative scheduling to resequence the installation of a clean room and quality control lab, shortening the schedule by six weeks.
Align culture and governance around the IMS. Effective implementation requires alignment in culture and governance. Functions need to accept the IMS as the shared plan of record instead of maintaining fragmented subschedules. Governance teams need to link decisions about releasing capital to schedule maturity, treating speed-to-impact risk with the same scrutiny as the budget and scope.
Organizations that have embedded schedule-first project management report timeline reductions of 10 to 15 percent, with improved transparency and better coordination across workstreams.
2. Implementing strategic procurement and contracting models
When done right, strategic procurement reduces costs and secures reliable delivery. It requires looking at the full cost across the whole contract as opposed to just “buying cheapest.” It protects the schedule, improves capital efficiency, and enables execution at the pace required for modern life science portfolios. Adopting progressive contract models means organizations can reliably execute processes even when complexities arise. Several actions help implement this approach.
Reframe procurement as a frontline driver. Procurement is often treated as a downstream function that is activated only once the scope is locked and schedules are set. But in accelerated capital delivery, procurement must move upstream. Strategic sourcing becomes a pacing item, and delays in procurement can stall an entire project. Conducting should-cost or cleansheet analysis up front can help drive value for procurement from the beginning.
Engage suppliers early to shape execution. Leading life sciences organizations bring contractors and key suppliers into the process early—usually during concept design—to shape scope, clarify specifications, and lock in lead times before the schedule is determined. Rather than sourcing monolithically, teams break scope into early bid packages, allowing parallel progress on design and procurement, and giving long-lead equipment a head start.
Shift to outcome-based contracting models. Companies can leverage new, more-collaborative contracting models, such as progressive design-build or integrated project-delivery contracts, to link incentives via gainshare and painshare arrangements to outcomes for everything from schedule milestones to installation readiness. These models share risk, align incentives, and give owners greater control over the project life cycle.
Structure contracts to reflect real-world complexity. To ensure contracts account for real-world complexity, life sciences companies can prenegotiate escalation terms, lead-time buffers, and productivity assumptions. Teams can also engage commercially capable owner reps—that is, people who can negotiate performance structures, manage claims risk, and keep suppliers aligned to the most efficient scheduling.
Companies adopting strategic procurement approaches have seen procurement cycle time improved by up to 20 percent, as well as greater cost certainty through reduced claims and change orders.
3. Strengthening CQV readiness
To deliver products that are safe, high quality, and compliant, organizations need to integrate robust CQV into the workstream. If implemented correctly, CQV can accelerate products’ time to market, increasing ROI. There are several ways organizations can deliver timely, high-quality CQV.
Integrate a front-loaded CQV strategy in the construction process. CQV is often handled separately from the rest of the project, which creates avoidable delays. A front-loaded CQV strategy avoids these bottlenecks and can accelerate the construction process without compromising compliance or product release timelines.
Make CQV a critical-path workstream from day one. To accelerate project delivery, life sciences companies can assign a CQV lead at the project’s outset to ensure validation logic is built into the IMS alongside design and procurement. Teams align user requirements specifications early, coordinate closely with process engineering, and structure deliverables to support qualification readiness from the start.
Use modular, prevalidated systems to gain speed. To compress timelines further, advanced teams deploy skid-mounted, prevalidated systems that arrive on-site with major portions of commissioning and testing already completed. Where possible, factory and site acceptance testing are executed off-site in controlled environments, where teams can test equipment separately from the construction progress and reduce start-up risk.
Leverage digital tools and risk-based validation. Digital validation platforms—digital tools that manage and automate protocol execution, deviation tracking, and the integration of quality management systems and laboratory information management systems—add another layer of speed and control. Combined with risk-based validation approaches, these tools help focus resources on critical systems, reduce protocol bloat, and speed up batch release.
Firms that integrate CQV from the start could accelerate start-up by three to six months, while also improving compliance and documentation quality.
4. Building institutional delivery capabilities and talent strategies
The right talent and internal capabilities can lead to smarter, faster, and more-resilient manufacturing outcomes. Organizations can take several actions to build expert internal teams and capabilities to control the delivery process.
Institutionalize control and repeatability. We have observed leading organizations taking a different approach by using engineering, procurement, and construction management to provide short-term execution capacity while companies increase their institutional capabilities to achieve repeatable, high-value delivery.
Stand up a capital projects center of excellence (capital COE). To enable this shift, organizations are creating capital COEs, dedicated functions that codify best practices, provide expert support to projects, and enforce governance standards across the portfolio. The capital COE houses critical roles such as engineers, schedulers, contract strategists, and controls experts and deploys them flexibly across projects.
Standardize execution through playbooks. To enable consistency and speed, capital COEs develop standardized capital playbooks that cover stage gates, contracting models, scheduling protocols, and CQV workflows.
Hardwire execution via digital tools. Digital tools are critical to institutionalizing delivery. Project controls platforms centralize cost, schedule, and risk data; capital dashboards provide real-time visibility; validation systems ensure compliance at speed; and structured training programs help build internal teams with the skills to plan, negotiate, and manage capital effectively.
Companies that have built strong internal delivery teams report fewer delays, faster ramp-up of new sites, and a 15 to 30 percent increase in capital project throughput across the portfolio.
With substantial capital pouring into the life sciences industry, leaders can prioritize capital excellence by shifting their mindset from traditional, product-driven approaches to time-based capital strategy. Leaders who shorten project life cycles could rise above the competition while quickly and efficiently delivering life-saving medicines and therapies to the patients who need them.
