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April 2025
Principal Consultant
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The global natural language processing (NLP) in healthcare and life sciences market size is calculated at USD 6.66 billion in 2024, grew to USD 8.97 billion in 2025, and is projected to reach around USD 132.34 billion by 2034. The market is expanding at a CAGR of 34.74% between 2025 and 2034.
Natural language processing (NLP) is a field of artificial intelligence (AI) that enables machines to comprehend and respond to human speech. It involves the use of machine learning, deep learning, and text analytics to interpret and analyze human language from various sources, including audio recordings, documents, and images. In the healthcare sector, it improves clinical documentation, accelerates clinical trial matching, and supports clinical decisions. In the life sciences sector, NLP expedites the research and development process and monitors reactions to drug administration.
The rising adoption of electronic health records (EHRs) in healthcare organizations favors the use of NLP. Numerous pharmaceutical companies and healthcare organizations are installing advanced technologies to streamline their workflows and stay ahead of other market players. Several government organizations support the adoption of digital technologies through incentives and initiatives. The growing need for predictive analytics to improve significant health concerns boosts the market.
Rising Adoption of EHR
The major growth factor of the market is the rising adoption of electronic health records (EHRs). EHR is a systematized collection of an electronic system to store patient and population health data. The growing demand for improving healthcare delivery and health outcomes promotes the adoption of EHRs. It stores a huge amount of unstructured data daily. It is estimated that more than 96% of U.S. hospitals have adopted EHR systems. Integrating NLP with EHR can convert billions of unstructured data into structured data, improving the diagnostic and prognostic model. NLP models extract and interpret patient information documented in clinical narratives accurately and efficiently.
Data Security and Privacy Concerns
The major challenge of the natural language processing (NLP) in healthcare and life sciences market is data security and privacy concerns. NLP handles a vast amount of data in healthcare and life sciences organizations, such as sensitive patient data and confidential research information. These data are more prone to cyberattacks, leading to identity theft of patients and leakage of essential research information.
Burgeoning Healthcare and Life Sciences Sectors
The future of the market is promising, driven by the burgeoning healthcare and life sciences sectors. Established pharmaceutical companies and healthcare organizations are increasingly adopting advanced technologies, such as AI and NLP, to streamline their workflows. NLP has widespread applications in both the healthcare and life sciences sectors, including clinical documentation management, patient sentiment analysis, and drug discovery. The growing research and development activities lead to a rising number of clinical trials, facilitating the use of NLP to recruit suitable subjects and monitor adverse effects. The increasing number of healthcare startups globally owing to favorable venture capital investments further potentiate the adoption of NLP. NLP helps to accelerate the speed of several tasks, reducing human intervention.
By technique, the smart assistance segment held a dominant presence in the natural language processing (NLP) in healthcare and life sciences market in 2024. NLP provides smart assistance by enabling computers to understand and process human language. It assists healthcare professionals and patients in recording and managing their conversations. The increasing use of chatbots and voice assistance in healthcare and life sciences organizations boosts the segment’s growth. It can also manage human-robot interaction in rehabilitation therapy, including machine translations and user interfaces. The growing demand for smart healthcare enhances patients’ medication adherence. NLP allows systems to comprehend user commands, extract relevant information, and generate appropriate responses.
By technique, the classification & categorization segment is anticipated to grow with the highest CAGR in the natural language processing (NLP) in healthcare and life sciences market during the studied years. NLP is widely used to classify and categorize health-related documents, sorting huge amounts of documents without actually reading them. It also allows healthcare professionals to streamline the transcription process, enhance accuracy, and unlock different information present in medical texts. NLP may help categorize medical data based on patient demographics, medical conditions, procedures, treatments, and outcomes. This simplifies the task of providers and administrative staff, reducing the time for unnecessary tasks and focus more on patient care.
By end-use, the life science companies segment held a significant share of the natural language processing (NLP) in healthcare and life sciences market in 2024. Numerous life science companies like pharmaceutical and biotechnology companies adopt NLP technology to increase productivity, reliability, and make better decisions. NLP expedites the R&D process for new drug discovery and development, augmenting the segment’s growth. It can process large volumes of scientific publications to assist researchers in literature review, reducing their time. NLP can also create summaries of clinical trials or internal research documents. The increasing number of clinical trials also fuels the segment’s growth.
By end-use, the providers segment is projected to expand rapidly in the natural language processing (NLP) in healthcare and life sciences market in the coming years. NLP helps providers understand patient sentiments and opinions and identify areas for improvement in patient care experiences. It automates medical coding and billing, reducing errors, improving coding accuracy, and accelerating the billing cycle. This leads to faster payments and improved revenue management for healthcare providers. NLP can also convert spoken language into text, allowing providers to create accurate and detailed clinical documentation. Moreover, NLP can also analyze vast patient data and identify the root cause of a disease.
North America dominated the global natural language processing (NLP) in healthcare and life sciences market in 2024. The rising adoption of advanced technologies in healthcare and life sciences companies in North America drives the market. The increasing market competition among established pharmaceutical and biotechnology companies facilitates them to install NLP technology. Government organizations support NLP technology in healthcare through funding and initiatives. The presence of key players also contributes to market growth. Key players such as IBM, Cogent Infotech Corp., and AI Superior held a major share of the market in North America.
The Department of Health and Human Services (HHS) supports the development of NLP technologies for healthcare organizations. The Food and Drug Administration (FDA) formed the Digital Health Center of Excellence to advance healthcare by fostering responsible and high-quality digital health innovation.
In October 2023, the Canadian government announced an investment of $26.6 million to improve the health of Canadian people through integrated care policies and practices. The research teams implement digital solutions to improve care in remote and rural areas. The federal government administers national health guidelines and provides financial support to the provinces and territories.
Asia-Pacific is projected to host the fastest-growing natural language processing (NLP) in healthcare and life sciences market in the coming years. The growing demand for advanced patient care and EHRs augment market growth. The increasing awareness about the benefits of advanced technologies, such as AI and NLP, in healthcare and life sciences companies also potentiate market growth. Several government and private organizations conduct symposiums and conferences to create awareness about NLP applications. The increasing investments, collaborations, and mergers & acquisitions favor the development of NLP software.
Favorable regulatory frameworks facilitate the development of NLP software. The National Medical Product Administration (NMPA) regulates the approval of AI and NLP-based software in China. As of June 2024, the NMPA has approved around 92 AI tools to accelerate healthcare decision-making and improve diagnostic accuracy.
The Indian government promotes the indigenous development of AI/NLP-based tools for healthcare and life science organizations through its “Make in India” initiative. The National Digital Health Mission aims to create a comprehensive digital platform for healthcare.
Europe is observed to grow at a considerable rate in the natural language processing (NLP) in healthcare and life sciences market in the upcoming period. The growing need for AI technologies to enhance productivity favors the adoption of NLP. According to the European Commission, around 13.5% of enterprises in the EU with 10 or more employees used AI technologies in 2024 to conduct their business. The commonly used AI technologies included text mining, natural language generation, and speech recognition. Favorable government initiatives and investments support the use of NLP in healthcare and life science companies in Europe.
The French government launched the “Healthcare Innovation 2030” initiative with an investment of €7.5 billion ($7.9 billion) to turn France into the European leader in health innovation by 2030. The primary aims of the initiative include creating biotech innovation hotspots, streamlining clinical trial organization, and simplifying the market access system for new treatments.
The increasing number of pharma and biotech startups fosters market growth. There are around 7,067 active pharma and biotech companies in the UK as of Q1 2025. Thus, the increasing market competitiveness due to collaborations, investments, and access to skilled labor propels market growth. Moreover, there are 52 NLP providers, both established and startups, in the UK.
Ann Barnes, CEO at Intelligent Medical Objects (IMO), commented on the acquisition of Melax Technologies, Inc., that combining Melax Tech’s analytics and NLP capabilities with IMO’s clinical terminology and data quality platform will enable healthcare organizations to have a more comprehensive solution for both clinical operation and research. He also said that the acquisition will help extend their state-of-the-art capabilities to payer, pharmaceutical, and life science companies.
By Technique
By End-Use
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