Opportunities for Rare Diseases to Drive Growth in Big Pharma

Rare disease is not rare. Over 30 million Americans, or approximately 10% of the country, are affected by diseases with patient populations less than 200,000, according to the U.S. Food and Drug Administration (FDA). These diseases number over 7,000, many are life-threatening and the majority have no approved treatment.

The Orphan Drug Act of 1983 established incentives that transformed rare diseases from neglected conditions into a strategic growth area for the industry. In 2024, 26 of CDER’s 50 novel approvals (52%) carried orphan designations (oncology and non-oncology). Non-oncology orphan drugs are projected to contribute nearly one-third of global prescription sales by 2030 at $324 billion, outpacing the growth of the broader pharma market (see Figure 1) and totaling revenues on par with the gross domestic product of countries such as Finland, Chile and Portugal.

Importantly, non-oncology orphan indications have become of strategic importance to large-cap biopharma, with revenues projected to reach over $100B in sales by 2030F across the top 15 pharma (over 13% of their total 2030F sales) and signaling increasing relevance to their long-term growth.

Advantages in orphan markets

Participation in orphan disease markets may offer biopharma companies uniquely advantaged models for value creation given their potential for relative capital efficiency (see Figure 2). The key drivers underpinning this potential for a favorable risk-reward profile include:

• Clinical development efficiency
  Clinical programs are typically lean, with pivotal trials often enrolling about 60% fewer patients in Phase III trials vs. non-orphan drugs, reducing both cost and time-to-market and improving ROI.
• Higher probability of success
  Orphan assets demonstrate meaningfully higher development success rates, with an overall likelihood of approval from Phase I of roughly 30% compared to approximately 20% for non-orphan programs. This is because they frequently target well-validated biology, yield larger effect sizes in enriched populations, benefit from regulatory flexibility and are conducted at concentrated centers of excellence with engaged patient networks.
• Regulatory advantages
  Specialized FDA guidance (e.g., on trial design and endpoints) and flexibility (e.g., acceptance of surrogate endpoints and single-arm or adaptive clinical designs) can streamline the regulatory process and are complemented by incentives such as priority review vouchers.
• Policy environment
  The One Big Beautiful Bill Act has expanded the Inflation Reduction Act’s orphan drug exemption, allowing multi-indication rare disease products to remain insulated from Medicare price negotiations. The negotiation eligibility for orphan drugs that later gain non-rare disease indications now begins at the non-orphan approval date, thereby delaying exposure.
• Competitive insulation
  First-in-class therapies typically retain a strong leadership position, often maintaining greater than a 60% share five years post-launch. Across launched non-oncology drugs, rare disease indications average around four marketed therapies per disease, compared to approximately nine for non-rare indications.
• Commercial infrastructure
  Orphan patient populations are often concentrated within a limited number of centers of excellence, enabling high-touch patient services and smaller field teams.

Despite these potential advantages, it is important to note that these are not universal and do not guarantee success. While there can be multiple advantages in pursuing rare diseases, these can attenuate in indications lacking natural histories or validated endpoints, or where effective SoCs force active comparator trials. Participation in orphan disease does not guarantee success. Indeed, success can breed competition and erode expected advantages.

Proven success stories and drivers

While historically viewed as niche, some orphan drugs have demonstrated blockbuster, and even mega-blockbuster, success. Advances in precision biology, life cycle expansion and patient access have enabled several therapies to achieve multibillion-dollar revenues, reshaping expectations for the commercial scale of rare disease products. While the largest non-orphan blockbusters boast larger top lines than the largest orphan assets, the average of the top 50 orphan products still reaches $1.7 billion. Some analyses suggest that on a per-indication comparison, orphan assets are on par with those of non-orphan assets. As of 2024, one orphan therapy surpassed $10 billion, another delivered $5 billion and 18 others have achieved more than $1 billion in annual sales.

These blockbuster orphan drugs tend to share a common set of attributes that have enabled their success (Figure 3 shows four examples), via:

• Redefining standards of care by delivering transformative efficacy and safety. For example, Trikafta, Vertex’s therapy for cystic fibrosis (CF), revolutionized treatment by delivering substantially improved FEV, exacerbations and QoL over prior doublets, enabling greater treatment duration and use. Trikafta also showed benefit across a wider range of genotypes and age groups, expanding the addressable population to cover most CF patients.
• Applying disciplined life cycle expansion to broaden reach over time. For example, Alexion expanded Soliris and Ultomiris applicability both across rare indications (PNH, aHUS, gMG and NMOSD) and within indications (e.g., expanded eligibility and dosing advantages for higher uptake).
• Providing convenient administration accelerates uptake and adherence. For example, Hemlibra replaced frequent IV infusions with subcutaneous prophylaxis while enhancing bleed control in both inhibitor and non-inhibitor patients.
• Finally, enabling robust patient identification and activation amplifies market impact: Vyndaqel, Amvuttra and Attruby are unlocking a largely undiagnosed transthyretin amyloidosis population through investment in genetic testing, diagnostic programs and advocacy engagements.

Given the association of many orphan success stories, these attributes could provide the foundation for the next wave of orphan innovation.

Future opportunities

Orphan investment has exploded over the past approximately 10 years and is primed for continued growth. There are currently about 1,500 drugs in development for rare diseases worldwide, up from just about 800 in 2015. Dozens of orphan therapies are expected to reach the market in the next five years.

Applying learnings from prior success to a simple scan of the orphan pipeline helps develop hypotheses on potential future meaningful opportunities. These include indications such as IgA nephropathy, Von Willebrand disease, primary biliary cholangitis and Charcot-Marie-Tooth disease, among others (see Figure 4). 

Each of these areas exhibits similar hallmarks that enabled prior orphan blockbusters: high unmet need resulting in the potential for transformative efficacy and safety, strong patient activation potential and scalable infrastructure. While the quality of the assets has not been evaluated as part of this assessment, the breadth of the pipeline and characteristics of the indications being pursued suggest that the orphan space is poised for continued growth.

Realizing the potential in these emerging indications will require the following:

• Deliver transformative efficacy
  Build unequivocal evidence of a step-change in efficacy across endpoints routinely accepted as establishing durable benefit in as wide a patient population as possible.
• Clearly define epidemiology
  Reliable prevalence data is critical and companies that invest early in clarifying disease epidemiology create the foundation for both payer negotiations and patient advocacy engagement.
• Systematically find patients
  Successful companies are deploying multi-pronged approaches to resolve diagnostics bottlenecks, including genetic testing, AI-driven EMR mining and specialist education to uncover untreated and undertreated populations.
• Articulate residual unmet need
  Even in conditions with existing therapies, residual gaps (durability, administration burden, partial efficacy) must be clearly documented (e.g., patient-reported outcomes are particularly powerful in demonstrating quality-of-life improvements).
• Build a robust HEOR evidence base
  As orphan drugs expand toward meaningful patient populations, payers are likely to demand evidence of reduced or eliminated downstream costs, exacerbating the need to quantify avoided hospitalizations, productivity loss and long-term complications.
• Engage stakeholders early
  Proactive dialogue with regulators, payers and advocacy groups, including co-developing trial endpoints with regulators and collaborating on diagnostic infrastructure, can potentially accelerate adoption and support favorable coverage.

Together, these imperatives can define a repeatable model to successfully capture the opportunity in orphan drugs.

Overall outlook

The orphan drug segment is likely to remain one of the most attractive growth areas in pharma. Potential for structural advantages, resilient demand and emerging indications point toward further expansion. While policy scrutiny is likely to continue, orphan assets remain comparatively advantaged and continue to attract both investor and strategic interest.

For pharma leaders, the opportunity lies not only in scientific innovation but also in systematic market development, from patient-finding to downstream value demonstration. Companies that integrate these elements are likely to be best positioned to capture the next wave of growth in orphan drugs.

For more information, please contact us.

References

2024 FDA New Drug Therapy Approvals Annual Report
https://www.fda.gov/media/184967/download 

FDA Orphan Drug Act
https://www.fda.gov/industry/medical-products-rare-diseases-and-conditions/designating-orphan-product-drugs-and-biological-products

EMA Market exclusivity orphan medicines
https://www.ema.europa.eu/en/human-regulatory-overview/post-authorisation/orphan-designation-post-authorisation/market-exclusivity-orphan-medicines

Medicare Drug Price Negotiation Program guidance
https://www.cms.gov/files/document/revised-medicare-drug-price-negotiation-program-guidance-june-2023.pdf

MIT Project ALPHA
https://projectalpha.mit.edu/pos/

Wong et al., JAMA Network Open (2023)
https://jamanetwork.com/journals/jamanetworkopen/fullarticle/2808944

Booth, Bruce. “Twenty Years in Early-Stage Biotech VC, Part 1.” LifeSciVC, 10 Oct. 2025
https://lifescivc.com/2025/10/twenty-years-in-early-stage-biotech-vc-part-1/

JAMA orphan drug vs non-orphan drug revenues (asset level)
https://jamanetwork.com/journals/jama/fullarticle/2804613%20

IQVA white paper (source for lack of generic competition and SOC claims)
https://www.iqvia.com/-/media/iqvia/pdfs/library/white-papers/from-orphan-to-opportunity-mastering-rare-disease-launch-excellence.pdf

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