Working in Rare Diseases: A Business Model

Rare diseases, by definition, affect a small population. Definitions differs globally; for example, the WHO (World Health Organization), defines a rare disease as one that affects fewer than one in 2000 people, and this is the definition that's used in Europe and the UK. In the US a rare disease is defined as affecting fewer than 200,000 people across the country.

Treating rare diseases has a high cost for healthcare systems. In a 2018 report, the cost of rare disease patients up to the point of a diagnosis to NHS England over ten years was greater than £3.4 billion. [1]

The importance of rare diseases

While rare diseases are rare individually, there are between 6000 and 8000, with new conditions being discovered regularly. They collectively affect around 400 million people worldwide. Around 70% of rare diseases present in childhood, about 80% are caused by single gene mutations, and over 90% of rare diseases do not have approved treatments. On average, it takes over four years to get an accurate diagnosis, and this may include a number of incorrect diagnoses. Some people never get a diagnosis in their lifetime, as the symptoms can be vague or common to other disorders. This extended timescale can have a major impact on patients and their families, by delaying access to any treatment that is available, and to specialist support such as charities and advocacy groups. [2-4]

Some countries carry out newborn screening for rare diseases. For example, NHS England has expanded its newborn screening to include over 200 genetic conditions where there is a treatment available, allowing access to therapy before the disease becomes symptomatic. Under the Generation Study, led by Genomics England, newborn babies are offered whole genome sequencing shortly after birth.

There are arguments that screening should be extended to untreatable conditions, allowing parents or carers to access appropriate support or find other families in similar situations.

The market size

According to a 2024 report, the global rare disease treatment market size was worth around $195.2 billion in 2024, and is anticipated to expand at a CAGR (compound annual growth rate) of 11.6% by 2030. The largest share of the market is in treatments for rare cancers, and the share for musculoskeletal conditions is expected to grow between 2024 and 2030. Biologics make up over half of the market share. [5]

Working in rare diseases: A business model

Developing a drug for a rare disease is risky. The costs of development are as high or higher than creating a drug for a more common disorder, the pool of patients for clinical trials is limited, and the market is small.

Intervention by governments across the world has made it viable for biopharma companies to move into the rare diseases market. As an example, the Orphan Drug Act (ODA) was signed into law in the United States in January 1983. The ODA allowed the establishment of the Orphan Products Grants Program and the Orphan Drug Designation Program, both of which have provided financial incentives for developing drugs for rare diseases, which offset the associated costs and risks. These incentives include tax credits for clinical trials, waiving of FDA (Food and Drug Administration) user fees, development grants, fast-track approval and longer marketing exclusivity (up to seven years) after approval for the orphan-designated indication. [6, 7]

Between 1983 and 2022, under the ODA, 6,340 orphan drug designations were granted, including 1,079 rare diseases. Of these designations, 882 resulted in at least one FDA approval for drugs for 392 rare diseases. Of the top ten designated and approved diseases, seven were rare cancers. [7]

Patient advocacy groups have played a vital role in the development of drugs in rare diseases. The ODA was passed as a result of lobbying by the National Organization for Rare Disorders (NORD). They also provide input into clinical trial design, as the individuals involved understand their disease (or their child's disease) very well, including the progression of the disease and the challenges they face.

Working in rare diseases can provide an understanding of genetic mutations and how they manifest that can be applied to other conditions. Many rare diseases are as a result of a single gene mutation. Developing a therapeutic for a rare disease can provide the company with insights that can be applied to multifactorial conditions. Therapeutics developed specifically for rare diseases may have potential to be repurposed after approval for more common conditions.

Rare disease therapeutics are often developed by small biotech companies, which have a narrow focus but deep expertise. They can be more flexible and agile, allowing them to take up new technologies and to change direction as the science and the markets change. Partnering with a big pharma company, which has the money to invest, the expertise to run clinical trials and the regulatory, manufacturing, sales and marketing capabilities to get a drug to the market can be a useful synergy.

Repurposing drugs – taking already studied or approved drugs and finding new applications – can be a valuable approach in developing drugs for rare diseases. Because safety and toxicity studies have already been conducted, the overall development costs may be lower and the route to market may be faster. Real-world data is useful in repurposing in rare disease. Analysis of electronic health records (EHRs) and claims databases, along with other sources, can show links between existing drugs and rare disease. Online platforms also provide access to novel uses of existing drugs. [8]

Artificial intelligence can play a role in repurposing drugs for rare disease, by identifying drugs from existing medicines. An AI model, developed by a team of academic researchers in the US, was able to identify drug candidates from existing molecules for more than 17,000 rare diseases and diseases without any current treatments. As well as identifying potential therapeutics, the model also explained the rationale for its choice. [9]

Next steps in rare disease

While developing drugs for rare diseases brings challenges, there is a population that needs diagnostics and therapeutics. Collaborations between academia, biotechs and big pharma, with feedback from advocacy groups, are a good route to getting drugs for rare diseases through studies and onto the market.

References

1. Harrison, K. New report reveals that, while undiagnosed, rare disease patients have cost the NHS in excess of £3.4 billion. 2018  [cited 2018 17 December]; Available from: https://imperialcollegehealthpartners.com/new-report-reveals-undiagnosed-rare-disease-patients-cost-nhs-excess-3-4-billion.

2. Rare Disease & Us - views from children, young people and families.  [cited 2022 28 February]; Available from: https://www.rcpch.ac.uk/news-events/news/rare-disease-and-us.

3. Rare Diseases.  [cited 2024 6 February]; Available from: https://www.ashg.org/wp-content/uploads/2021/02/DG_FactSheet_RareDiseases_FINAL.pdf.

4. ‘Gene silencing’ therapies market set to boom, says leading biotech, in PharmiWeb.com. 2024.

5. Rare Diseases Treatment Market Size, Share & Trends Analysis Report By Therapeutic Area (Cancer, Musculoskeletal Conditions), By Route Of Administration, By Drug Type, By Distribution Channel, By Region, And Segment Forecasts, 2025 - 2030. 2024, Grand View Research.

6. Designating an Orphan Product: Drugs and Biological Products. 2024  [cited 2024 12 August]; Available from: https://www.fda.gov/industry/medical-products-rare-diseases-and-conditions/designating-orphan-product-drugs-and-biological-products.

7. Fermaglich, L.J. and K.L. Miller, A comprehensive study of the rare diseases and conditions targeted by orphan drug designations and approvals over the forty years of the Orphan Drug Act. Orphanet J Rare Dis, 2023. 18(1): p. 163.

8. Jonker, A.H., et al., Drug repurposing for rare: progress and opportunities for the rare disease community. Front Med (Lausanne), 2024. 11: p. 1352803.

9. Pesheva, E., Using AI to repurpose existing drugs for treatment of rare diseases, in The Harvard Gazette. 2024.