Artificial intelligence is dramatically speeding up drug development — and a proprietary survey shows how it's priming a bigger automation push that's changing the trajectory of early-stage pharma research.

Why it matters: The TD Cowen survey of 80 biopharma leaders and insiders finds AI is compressing drug developers' preclinical costs and timelines by as much as 70%.

• That's fueling demand for cutting-edge software, sequencing tools and computer models that will help churn out more experimental treatments in the next five years.

The big picture: AI can't replace scientific intuition. But the way it can streamline the grueling R&D before human testing begins is making computer screens as important a feature of drug design as traditional laboratories.

• The hope is to "create more shots on goal," says Brendan Smith, director of life sciences equity research at TD Cowen, and to generate large amounts of data that can train the AI models to increase the odds of clinical success.
• There's a considerable downstream effect on "wet labs," where scientists will still evaluate the safety and effectiveness of the compounds.

Between the lines: The idea of a continuous research loop contrasts with the AI-fueled disruption and job losses hitting parts of white-collar America — though some segments of pharma could still be affected.

• The Trump administration's push to reduce animal testing in biomedical research will probably pivot more work to computational tools, 3D human tissue models and other alternatives that predict the toxicity of a compound.
• Demand for advanced software that can simulate biological processes and predict how two drugs can interfere with each other or adjust dosages for newborns and pregnant women will see the strongest upside by 2028, the survey finds.

Reality check: AI hasn't yet discovered a drug that's won FDA approval. And some investors question its ability to have a significant impact on patients.

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The latest FDA hiring update shows the agency is continuing to experience turnover at key centers overseeing drugs and biologics and vaccines, even as it tries to recruit more scientific and review personnel.

The big picture: The pharmaceutical and biotech industries depend on the agency being predictable and reliable to shepherd millions of dollars in investments.

• But concerns about staffing and the loss of institutional knowledge remain after DOGE cuts and Health Secretary Robert F. Kennedy Jr.'s reorganization of the federal health bureaucracy.

By the numbers: The Center for Drug Evaluation and Research brought on 205 employees and lost 261 through the first three quarters of FY26 ending June 30, according to a quarterly update.

• The Center for Biologics Evaluation and Research hired 39 employees and lost 93 over the same period.

Since President Trump took office, both centers have lost about 20% of staff, according to a Raymond James investor note, which adds that "a 1:1 replacement of an FDA reviewer does not account for the institutional knowledge lost."

What's next: While acting commissioner Kyle Diamantas works to bring back talent and attract new candidates, the White House is vetting finalists to succeed former commissioner Marty Makary.

Hospitals and medical schools are sounding the alarm over an administration plan to change visa rules and potentially limit how long nonimmigrant physicians and biomedical researchers can stay in the U.S. for residency and training programs.

Why it matters: It's the latest immigration-related policy change to loom over the health care workforce. About 1 in 10 medical residents nationwide use J-1 visas to train at U.S. health systems, per the Association of American Medical Colleges.

Driving the news: The Department of Homeland Security finalized a rule late last week that would let visa holders stay in the U.S. for a fixed period lasting the length of their approved program, but not to exceed four years.

• Currently, visa holders are authorized for the entire length of their training.
• The administration wants to reduce the possibility of visa overstays and confirm that visas are being used for their intended purposes. Individuals could still apply for extensions.
• But health groups say many medical residency, doctoral and other programs often take longer than four years to complete. The American Hospital Association has said delays in extensions could disrupt physician training and leave residency slots unfilled, possibly reducing access to care.

The new rule is set to take effect Sept. 15.

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