The US rare and ultra-rare disease market constitutes a cornerstone of the worldwide pharmaceutical industry, representing a full 52.3 percent of the total global market share in revenue for that therapeutic area. America also plays an outsized role in driving international medical innovation in that field – housing nearly 60 percent of all life science entities dedicated to this sector, more than 380 entities to date – as well as possessing a comparatively mature regulatory framework that renders it the preferred destination of choice for many new orphan drug launches.
Yet, for all of that, the scope for even greater activity remains immense. “There are presently around 10,000 known rare diseases, approximately 75 percent of which affect children, and only about five percent of them currently have any kind of approved treatments. This reality alone captures the scale of unmet need nationwide,” observes John Hess, senior vice president Americas at Chiesi Global Rare Diseases.
Moreover, owing to their sheer proliferation, rare diseases can be neither be viewed as marginal to the US healthcare system, nor as niche to the American pharma as one might perhaps imagine. “While any one particular rare or ultra-rare disease might be uncommon, as soon as you consider them collectively, you realize that they are actually surprisingly frequent and constitute an onerous burden for society,” reasons Dr Carlos Prada, director of the Edwards family division of genetics and rare diseases at Ann & Robert H. Lurie Children’s Hospital of Chicago.
“Indeed, with a rare disease defined as a condition affecting fewer than 200,000 people nationwide, that means they collectively impact over 30 million Americans,” he calculates. Small wonder, then that rare diseases are now costing the US economy nearly USD one trillion annually, according to an EveryLife Foundation study.
Diagnostic Odyssey
For drugmakers and healthcare professionals alike, the rare disease segment presents a number of unique and distinct challenges, however: notably around delays diagnosing patients in the first place, and subsequent difficulties in providing optimal treatment pathways. “An individual rare disease is, by definition, uncommon and that introduces additional complications,” explains Dr Jerry Vockley, director of the Center for Rare Disease Therapy and chief of the Division of Medical Genetics at UPMC Children’s Hospital of Pittsburgh.
“Most frontline clinicians are managing full patient loads and seeing only the most common conditions. Consequently, they might recognize a heart issue, an eye issue, or a neurological symptom, but not the underlying rare disorder that ties everything together.” This is what sends many families into the classic diagnostic ‘odyssey,’ that is lengthy delays, and multiple missteps as practitioners try and figure out what exactly is wrong with the patient.
“This state of limbo can last anywhere from a few days to as long as six years before they get an accurate diagnosis, often with extremely serious ramifications,” elaborates Vockley. Duane Barnes, president for North America at the Swedish rare disease specialty drug developer, Sobi, concurs. “The end result can often be life-threatening or, at the very least, entail a significant decline in a patient’s health before they finally get the right treatment,” he bemoans.
The length of the delay generally boils down to the extent that the frontline healthcare apparatus proves able to connect the dots and making sure the testing exists, that physicians know when to use it, and that there are clear referral pathways to specialists who can treat these conditions,” he explains.
In many instances, individuals present themselves with neurological or seemingly neurodegenerative symptoms, often alongside immune or autoimmune features, that do not align neatly with a single clinical specialty. “These multi-system presentations can appear disconnected until an underlying cause is identified, which makes the diagnostic process challenging and prolongs ability to access treatment,” elaborates Danielle Carnival, CEO of the Undiagnosed Diseases Network Foundation (UDNF), a dedicated entity, has been formed to help try and close information gaps in the rare disease space.
“We were explicitly created to support families upstream, while they are still searching for answers. Many systems are built to help people once they have a diagnosis, but the UDNF operates one step earlier by seeking to assist those individuals and families living under a cloud of uncertainty,” she explains.
Global Genes, for its part, has established a ‘Rare Concierge service,’ essentially an open help desk whereby anyone can reach out for guidance. “Whether they need help navigating care, finding resources, or simply figuring out their next step, we continue to offer much needed resources. Having that kind of foundational support makes a profound difference. It helps people get connected to the right specialists and services, and it gives them a place to turn to when they’re feeling lost,” explains Charlene Son Rigby, the organization’s CEO. “We strive to rectify some of the information asymmetries by creating spaces where patients, advocates, researchers, and industry can connect to share and disseminate their knowledge,” she affirms.
Screening: A Silver Bullet?
Having a systematic and robust screening system in place is an absolute prerequisite to being able to achieve timely diagnosis. “The goal must be to identify these conditions as early as possible — often through new-born screening — to change a child’s health trajectory before serious complications develop. That is why using genetic testing early in the diagnostic process is becoming increasingly important. Many hospitals have been moving in this direction, but it takes a lot more than just ordering tests. You require a comprehensive and fully-fledged supporting infrastructure in the background,” observes Lurie Children’s Hospital of Chicago’s Carlos Prada.
The UPMC’s Jerry Vockley very much agrees. “New-born screening and genetic testing are totally foundational to the rare disease journey. When you identify a rare disease at birth, you have a unique opportunity to intervene before a child becomes sick and prevent many, if not all, of the most severe symptoms from ever developing. That kind of early action can change the entire trajectory of a child’s life,” he insists.
Unfortunately, many of the prevailing screening techniques for babies currently in force across the US are deemed inadequate. Companies like Sentynl Therapeutics have been pushing for rare diseases to be included in standard new-born screening panels and utilizing rapid whole-genome sequencing to catch cases faster. “Integrating products into new-born screening can take up to 10 years from the creation of an assay, so whole-genome sequencing offers a critical alternative,” argues Matt Heck, the company’s founder and CEO, who points out that the standard ‘heel prick’ test many American neonatal units currently deploy is limited to revealing only a handful of conditions.
Not only would more systematic and in-depth screening potentially be a gamechanger for patient health outcomes, but equally for the healthcare system itself by doing away with unnecessary expenditure linked to misdiagnosis and late diagnosis whereby conditions have been allowed to become more severe and hence more expensive to treat. GeneDx’s ‘GUARDIAN’ study has provided some compelling evidence of the benefits to be derived from full-genome sequencing.
“In 2024, we published initial results from the largest new-born screening research study in New York State where we screened over 22,000 healthy babies using a whole genome sequencing. We examined more than 400 clinically actionable conditions and found that 3.2 percent of these otherwise healthy new-borns actually possessed a disease requiring action,” recounts Katherine Stueland, the company’s CEO.
“It’s accurate to say that 92 percent of these conditions would not have been discovered using conventional limited testing, and that without our screening, the average age of diagnosis for these diseases would have been seven to eleven years. We thus eliminated approximately a decade of unnecessary disease progression and healthcare system costs,” she exclaims. “What we really want to see is other states following suit and adopting their own GUARDIAN-style protocols,” she adds.
While many companies can sequence a person’s DNA, GeneDx differentiates itself by interpreting that data. Their massive database, Infinity, contains genetic and health information from over 2.5 million patients. This allows them to accurately diagnose rare diseases by comparing a new patient’s results against millions of others. “It’s effectively what you could call a ‘pay it forward’ model where every additional patient helps the next get an even faster diagnosis,” explains Stueland.
“We have tested more patients with rare diseases than anyone in the world, having run one million exomes and genomes, and generated more than seven million phenotypic data points. The combined genotypic and phenotypic data in Infinity allows us to more rapidly upgrade or downgrade variants of unknown significance,” she elaborates.
As the healthcare system moves toward a future where genomic screening plays a much larger role, Manisha Balwani, chief of the division of medical genetics and genomics at Mount Sinai, warns on the importance of keeping patients and their families at the center – making sure they are supported at every step. “Receiving a rare disease diagnosis can be life-changing for families, and it is essential that screening is done in a way that is sensitive, carefully communicated, and medically actionable,” elaborates Balwani. “Even when a condition does not yet have an approved treatment, there is still real value in a diagnosis, whether that means appropriate surveillance, targeted follow-up, supportive care, or access to clinical trials.”
Serving Patients First
While the 1983 Orphan Drug Act laid the foundation for industry investment into rare disease treatments (through tax credits, fee waivers, and seven years of market exclusivity), it was not until the 2010s that industry-driven rare disease R&D really took off. Up to that point, a combination of high R&D costs and low patient volumes meant rare diseases were unlikely to be high up on the agenda of the most drug developers, often meaning that it was left to unconventional actors like patient associations to advocate for increased investment in drug discovery. This was especially true in the US, as Michael Pearlmutter, CEO of the EveryLife Foundation, explains. “What differentiates the US from some countries that have wider, more holistic national rare diseases strategies is our tremendous innovation ecosystem,” he notes. “Much of the work done does not sit within the federal government. Indeed, historically it was driven by patient advocacy organizations and umbrella organizations like the EveryLife Foundation,” Peralmutter affirms.
Times have changed, however. Patent expiries for small molecule mass market blockbusters for conditions like cholesterol or blood pressure from 2011, combined with new capabilities in biologics and genomics, have led to an industry-wide pivot towards specialty medicines, including for rare diseases to the point where, in 2025, a full 57 percent of all novel drugs approved by the FDA were for orphan diseases.
One company to have achieved such a pivot is the Italian biopharma Chiesi Farmaceutici who, since launching its dedicated rare disease unit in 2020, has grown it from having one product to eight approved rare disease treatments within the US, with a ninth already in late-stage development. “Our development growth has been frankly exponential,” enthuses John Hess, who details how the entire focus of the new entity was US-centric. “A strategic decision was made to establish as a standalone business unit, with full functional leadership across R&D, medical, commercial, and corporate functions, operating in close coordination with the global parent company. Importantly, the choice to set its global headquarters in Boston, Massachusetts was very intentional and belies the supersized role the US plays in this area,” he confirms.
For other iconic biopharma brands, diversification into the rare disease space has been more gradual. UCB is a case in point. “Our entry into rare disease was not a sudden decision. It has been decades in the making, and a natural evolution from our historic footprint in neurology,” concedes Kim Moran, the company’s Head of US Rare Disease. “Neurology spans both large and very small patient populations, including rare and ultra-rare diseases. Our move into rare disease is an extension of that deep expertise in neurological science, now that regulatory frameworks have matured sufficiently, and medical science has advanced in a way that makes drug development in this area more financially feasible.”
Companies like Zevra Therapeutics are meanwhile emblematic of new breed of specialty players that have come into being that purely focus on the rare disease therapeutic space. “When the company rebranded, there was a very intentional decision to focus squarely on becoming a pure play rare disease company with a commitment to the patients we serve. But rare disease is not a catch-all term. For us, it means concentrating our efforts on roughly 40 Centers of excellence across the US,” details the company’s President and CEO, Neil McFarlane. “Geneticists, neurologists, haematologists, gastroenterologists, pharmacists all tend to sit within the same hospital systems, and this allows us to take a high-touch, high-support, non-traditional approach that is really required in rare disease, where every individual case is complex,” he adds.
Another entity, Mirum Pharmaceuticals, focuses on rescuing overlooked drug programs to treat rare diseases, especially those affecting the liver. “We are very focused on medicines that tend to be overlooked by big pharma because they do not meet the threshold of being expected multi-billion-dollar products. These are often high-impact medicines where there is a misunderstanding of the patient population, the demand, or the real-world disease burden,” explains Chris Peetz, the company’s co-founder and CEO.
Likewise, Sentynl Therapeutics’ Matt Heck describes how he feels his dedicated specialty company is better equipped to advance the development certain rare disease therapies than the initial entities that discovered them. “One pattern we identified early in our rare disease pursuit involved innovators holding one approved product alongside a development pipeline, essentially trying to operate as two distinct types of companies. Typically, growing organizations excel at one or the other. Because our expertise lay heavily in commercialization, we would approach these companies to acquire their approved products. In our view, we could provide a more dedicated effort, particularly when integrating the product into a focused commercial rare disease portfolio,” he says.
“The most meaningful aspect of our work has been our ability to capitalise on underappreciated rare disease medicines that other companies struggle to either maintain on the market or bring to fruition,” he adds.
Others highlight the crucial combination of commercial excellence and a strong sense of mission to achieving success in rare diseases. “It’s really important to me that the team has the same level of care and excitement about what they are working on,” says Mirum’s Peetz. “Talking about patient stories, getting these treatments approved, and supporting finding patients and diagnosis is the motivation for the team….Ultimately, what we are trying to do is bring truly game-changing medicines to patients with limited to no options. It all comes back to supporting disease awareness and diagnostic education to help ensure patients are appropriately identified.”
“In rare disease, patients and families already face enormous complexity,” adds UCB’s Moran. “Our responsibility is to remove as many barriers as possible and support them at every step of the journey…We listen to patients, caregivers, patient organizations, physicians, the payer community, and regulators. All of those perspectives matter. Our job is to listen carefully, evaluate the signals we are hearing, and if something needs to change, we pivot.”
Towards Platform Therapies
Underpinning this proliferation of industrial actors involved in rare disease in America, have been transformative changes to actual nature of the drug development process itself. Most notable of all has been a shift away from trying to treat symptoms towards correcting shared molecular errors that cause multiple diseases. “From a scientific standpoint, many ultra-rare diseases are monogenic, and the underlying problem, and therefore the solution, is often fundamentally the same regardless of disease prevalence,” reinforces P.J. Brooks, acting director at the Office of Rare Diseases Research within the National Center for Advancing Translational Sciences (NCATS). “Moreover, you are not starting with hundreds of thousands of compounds, like in traditional drug discovery. If you understand the pathophysiology of a rare disease—what is malfunctioning at the molecular level and what needs to be corrected—you can potentially significantly shorten the typical drug development timeline.”
This has given rise to a scenario whereby, instead of creating a unique one-off drug for every single disease, many drug developers are now aiming to fashion plug-and-play, scalable technologies that can treat groups of similar conditions at once by keeping the delivery system the same and whereby only the specific gene being fixed is swapped out. “If you have a gene-editing system that works for disease A, there is no reason you should need to reinvent the wheel for disease B. In many cases, all you need to demonstrate is that you can appropriately express the gene of interest or target the correct genomic site in a rapid in-vitro system,” reasons Brad Ringeisen, Executive Director of the Innovative Genomics Institute (IGI).
This modular approach is appealing because it lends itself neatly to getting new treatments approved faster and substantially lowers the development costs. “So long as multiple diseases share the same delivery system and editing machinery, and the primary variable is the guide RNA, there may be well be considerable opportunities to reduce regulatory and development burdens once safety and delivery are well characterized,” he conjectures.
“We’re still in the early days, but I firmly believe the rise of potentially disease-modifying therapies, and the ability to think about them as platforms rather than one-off solutions, is going to fundamentally change how we approach research and drug development,” predicts Global Genes’ Charlene Son Rigby. “Instead of treating each rare disease as its own isolated issue, we can now commence thinking collectively, just as we’ve long done with small molecules that treat classes of conditions. And the fundamental difference now is that these newer technologies may actually modify or correct the underlying biology,” she anticipates.
Supportive Regulatory Frameworks
The other significant development that has enticed the pharma industry’s growing diversification into rare disease has been the United States’ comparatively advanced regulatory ecosystem. “For a long time, American regulators have been ahead of the game dating back to the 1983 Orphan Drug Act which provides powerful incentives, including seven years of market exclusivity, tax credits for clinical testing, and waived FDA fees,” notes Zevra’s Neil McFarlane.
“From our own personally experience, I would say that the US regulatory framework seems to possess many of the right tools in place to support rare disease development. We have lived through the full discovery and development process of bringing novel therapies to market and, though I would sometimes like to see is greater consistency in how the existing framework is applied, the appropriate enabling policies are definitely there,” he recounts.
Indeed, the FDA has been going out of its way to be supportive to the point where it has even created a dedicated Rare Disease Innovation Hub. “There were legitimate concerns about consistency and communication across the FDA’s medical product Centers, particularly between the Center for Drug Evaluation and Research (CDER) and the Center for Biologics Evaluation and Research (CBER), so this structure allows the agency to promote consistency, alignment, and shared learning across Centers, while remaining clearly distinct from product review and approval decisions,” explains Amy Comstock Rick, director of strategic coalitions within the Innovation Hub. “Crucially this provides a central home where drug developers, and other stakeholders like patient groups, can talk directly to the FDA about big-picture challenges,” she adds.
Meanwhile, Priority Review Vouchers (PRVs) have been introduced for the development of drugs with limited commercial potential including rare disease therapies. Upon approval of an eligible drug, the developer receives a PRV which shortens the FDA’s goal review time from the standard ten months to approximately six months. Not only can these vouchers be redeemed to receive a Priority Review for a different future drug application, but they are fully transferable, enabling a company to sell its voucher to another pharmaceutical firm, often to generate much needed immediate funding.
“The PRVs have become a critical part of the American rare disease ecosystem. They create a meaningful, non-dilutive source of capital that allows companies to attract investment and continue advancing therapies that otherwise might not be financially viable. Having received and monetized one ourselves, that non-dilutive capital is now enabling us to accelerate our commercial efforts, advance our development programs, and explore bringing additional assets into the company,” explains McFarlane.
“The PRV program is an excellent example of tangible regulatory support in action,” agrees EveryLife Foundation’s Michael Pearlmutter. “It costs taxpayers nothing, it’s market-based, and it has, to date, helped bring more than 40 therapies to patients, which included over 30 first-ever treatments.”
Where there is still much room for regulatory improvement, however, is in areas like innovative clinical trial design. “A persistent and formidable challenge for many drug developers stems from a long-standing mindset within the FDA, where for generations, the gold standard has been the double-blind, placebo-controlled trial. The problem is that this approach often does not work for rare diseases. In some cases, it is simply impossible due to small patient populations, and in others, it is unethical,” laments the UPMC’s Jerry Vockley.
“Many valid, alternative approaches rely on natural history data, real-world evidence, and patients serving as their own controls. The FDA is slowly improving in its recognition of these methods, but progress is uneven. Senior leaders often acknowledge the need for flexibility, yet at the implementation level, reviewers often default to traditional expectations. That creates a disconnect between the policy intent and the practical pathway for approval,” he continues.
Chiesi’s John Hess agrees that progress on this front ideally needs to be faster. “Developing therapies in rare diseases is inherently challenging. Patient populations are small, clinical trial enrolment is difficult, and there is often significant heterogeneity even within a single diagnosis. Policymakers and regulators largely recognize this but have to do more to enact measures that will allow real-world data to complement traditional clinical development,” he insists.
“Over the past decade, one of the most important shifts has been our move away from automatically applying evidentiary expectations designed for large populations to very small ones. The statutory requirement to demonstrate safety and efficacy has not changed, but the medical product Centers have worked to clarify what that standard can reasonably look like when two randomised, placebo-controlled trials are simply not feasible. This is leading to greater flexibility in considering a single adequate and well-controlled study, alternative trial designs, and the use of mechanistic and other supportive data, including approaches that move beyond traditional placebo controls,” confirms the FDA’s Amy Comstock Rick. “This work has been formalised through the Rare Disease Evidence Principles (RDEP), announced in September 2025, which provide clearer guidance on how multiple sources of evidence may be combined to support regulatory decision-making in ultra-rare diseases,” she notes while acknowledging that such developments remain a work in progress.
Solving the ‘Last Mile’
Successful scientific breakthroughs are only half the battle, however. To ensure that the growing number of approved state-of-the-art novel treatments for rare disease become everyday care, America’s healthcare system must still solve numerous hurdles relating to reimbursement and insurance. Michael Eging, Executive and Founder of the Rare Access Action Project (RAAP) notes that the US healthcare system is often reluctant to fund breakthrough therapies in this space instead forcing patients to deal with years of insurance delays, complex paperwork, and ‘step therapy’ whereby patients must fail on cheaper drugs first.
“The largest disconnect is that much of the healthcare system is structurally designed to say ‘no.’ Some therapies can take 18 to 36 months, or longer, to gain access through Medicaid programs. The dissonance is stark. We invest to demonstrate life-changing benefits, but the post-approval system prioritizes cost containment over access,” he sighs.
Looking ahead, one of the most significant barriers is not necessarily going to be the science nor the regulatory framework per se, but the lack of business models that align with platform-based therapies,” concurs NCATS’ P.J. Brooks. “These technologies are created to be applied across multiple diseases, yet commercial development is still largely organized around individual indications, where pricing and return on investment can be calculated based on patient numbers. That approach is understandable, but it does not sit comfortably with the idea of a reusable therapeutic platform intended to serve many ultra-rare conditions. The open question is whether viable models can be built around the platform itself rather than around a single disease,” he conjectures.
A further complication is the fragmented nature of American insurance coverage. “Access here depends heavily on understanding which patient populations are being addressed and which payers are in charge of their care, whether that be government-funded programs such as Medicare, Medicaid, and Veterans Affairs, or commercial insurance,” notes Sobi’s Barnes. “Every new product launch requires us to look carefully at who the patients are, where they are treated, and what reimbursement landscape applies. We also have to consider whether a product falls under Part B or Part D, meaning whether it’s physician-administered or a small-molecule drug dispensed through a pharmacy. Those differences may have an impact on access and availability.”
“Medicaid is a federal–state partnership, not a single national program. States operate under different waivers, payment models, coverage criteria and administrative rules, which creates significant variation in how care is accessed and reimbursed,” explains Eging. “Those challenges become even more acute when care is not available in-state. Many rare disease patients, particularly pediatric patients who are more likely to rely on Medicaid, must travel across state lines to access Centers of excellence. When they do, reimbursement rates, coverage criteria, prior authorization requirements and drug acquisition costs often differ.”
Founded to tackle one of the most persistent blind spots in rare disease policy when approved breakthrough therapies meet the realities of coverage, reimbursement and real-world access, the RAAP has thus been pushing for laws that require insurance review boards to include at least one patient advocate and one rare disease specialist when deciding whether to cover a new therapy. Moreover, they have been advocating for root and branch reform of reinsurance models.
“We would like to see Medicaid reinsurance and secondary reinsurance markets properly leveraged to stabilise costs, and AI and analytics harnessed to improve coverage decisions, manage costs, and understand patient populations. Too often, reinsurance is treated as an afterthought. Integrated properly, though, it can be transformative,” says Eging pointing to the example of the state of Arizona which, since the 1990s, has led in risk pooling and innovative financing. “Rare disease is like a genetic lightning strike, but it is insurable – much like catastrophic events where insurance models already exist. This is the mechanism in the future by which the right coverage can be provided at the right time without unnecessary delays,” he predicts.
