Rare diseases may affect only a small number of people, but together they impact an estimated 300–400 million people worldwide — and only around 5% have an approved treatment. As global attention grows, including the WHO’s upcoming 10-year Global Action Plan, it is important to understand how regulation, HTA, and pricing policies across the UK, EU, and US influence the development of orphan medicines and access for patients.
Overview
Rare diseases, often referred to as orphan diseases, are medical conditions that affect a small proportion of the population, and are chronic, debilitating, and/or life-threatening. In the European Union, a disease is classified as rare if it affects 5 or fewer in 10,000 people, while in the United States, it is defined as affecting fewer than 200,000 people (equivalent to roughly 6 in 10,000 people). Approximately 85% of rare diseases are ultra-rare, affecting fewer than one in a million people. Despite their individual rarity, rare diseases collectively affect an estimated 300-400 million people worldwide, with around 7,000 distinct rare diseases identified to date. Only around 5% of rare diseases have approved treatments.
Rare diseases come with unique challenges: small patient populations and limited economies of scale create diagnostic and therapeutic barriers and drive disproportionately high orphan drug development and production costs. This means the sector is dependent on public research funding (push incentives) and commercial incentives (pull incentives).
The US and EU have long aimed to incentivise the research and production of orphan treatments, recognising the inherent barriers they face. The EU offers 10 years market exclusivity, protocol assistance, regulatory fee waivers, and national R&D incentives; the US similarly offers 7 years market exclusivity, tax credits, development grants, priority reviews, and fee waivers. Orphan drug development is therefore especially sensitive to regulatory and policy changes. However, regulatory incentives for orphan drug research and development (R&D) are often not matched by Health Technology Assessment (HTA) and Pricing and Reimbursement (P&R) processes at the national level, which can lead to delays and disparities in access to innovative treatments for rare diseases.
The World Health Assembly recently recognised rare diseases as a global health priority, with the WHO 10‑year Global Action Plan for Rare Diseases aiming to foster “equitable access to timely, cost‑effective, affordable, available, accurate diagnosis and evidence‑based treatments”. As the WHO begins developing this Global Action Plan, this is an opportune moment to review the status quo in orphan‑medicine development and patient access, and examine the recent policy developments in the UK, EU, and US that impact this.
The status quo: inequities across health systems
The US and EU established regulatory incentives are linked to the granting of an official orphan designation before approval. In an analysis of regulatory decision-making for over 20 years (between 2001 and 2024), we found that significantly more therapies received orphan designation and subsequent approval in the US compared with the EU (see Figure below). Over this period, the FDA granted more than twice as many orphan designations and approved over three times as many orphan medicines compared with the EMA. One potential explanation for this divergence is the EU’s more restricted incentive offer, in addition to the European Medicines Agency (EMA) necessitating a higher evidential standard in the definition of orphan conditions and requiring a “significant benefit” over existing therapies (i.e. improved efficacy, improved safety, or better patient care). Additionally, the FDA is generally more likely to accept surrogate endpoints to evaluate treatment efficacy.
Access to innovative treatments for rare diseases in Europe is determined by country-level processes, which further contribute to divergences given the fragmented HTA and reimbursement systems. These processes are designed to ensure that publicly funded treatments offer good value for money, but methodological frameworks and evidentiary expectationscan limit access to orphan medicines. In the UK, for example, data from 2021 to 2025 indicate that fewer than half of EMA-approved orphan medicines have received a positive recommendation from either the National Institute for Health and Care Excellence (NICE) or the Scottish Medicines Consortium (SMC) (OHE analysis of publicly available data)[1].
This indicates how regulatory independence, divergent evidentiary standards, and differences in HTA policies can shape access to orphan drugs globally, potentially leading to inequities in treatment availability across jurisdictions. Other factors (such as developers’ strategy and market size), policies (including industrial policy), and other types of incentives (some of which we discuss below) can also play a substantial role when interpreting these findings.
[1] Data include orphan medicine indications approved by EMA between 2021 and 2025. “Positive recommendations” refers to any decision that enables patient access, including optimised and Cancer Drugs Fund decisions.
Policy shifts: UK, EU, and US
United Kingdom
Five years ago, the UK introduced a 5-year Rare Diseases Framework, aiming to provide a coherent national vision to improve the lives of people living with rare diseases. Recognising that there remains a lot to do, the Framework has been extended by one year, with the England 2026 Rare Disease Action plan published on Rare Disease Day 2026. Within Priority 4 of the framework – which is to improve access to specialist care, treatment and drugs – there is a commitment to advance initiatives to support development and enable access to treatments for rare diseases.
There has been recent progress along these lines. At the end of 2025, the UK government published a White Paper to introduce a new framework designed to support the development, licensing, and delivery of rare disease therapies in a way that balances patient needs with regulatory rigour and long‑term system sustainability. The framework will enable more flexible evidence and development pathways (such as adaptive trial designs and the use of surrogate endpoints) alongside strengthened international collaboration, robust patient engagement, and closer alignment with the NHS. It also acknowledges ongoing initiatives such as the Innovative Licensing and Access Pathway (ILAP), which provides developers of innovative treatments and novel drug–device combination products with enhanced multi-stakeholder support from development through to access. ILAP provides an example of a vertical collaboration between regulatory and HTA agencies and other stakeholders and brings the promise to streamline development and facilitate earlier patient access. Importantly, it also contains an explicit commitment to “active involvement with devolved administrations” to promote consistent access for patients across the UK’s devolved nations.
These developments – along with other initiatives such as NHS England’s development of an operational framework to pilot individualised genetic therapies in the NHS, and the Rare Therapies Launch Pad whose mission is to scale their development and use – demonstrate that there is momentum toward tackling some of the inherent barriers. However, there is a way to go before adoption meets the full potential of the science.
European Union
At the end of 2025, the EU Council and Parliament reached an agreement in principle on the reform of the pharmaceutical legislation. While full details are yet to be published, the reform is expected to bring changes to the regulatory framework for orphan medicinal products, continuing the EU’s trend toward more targeted incentives. The baseline market exclusivity period will be reduced to 9 years and even 4 years when the application is based on bibliographic evidence only. However, there will be a new maximum market protection of 11 years for breakthrough orphan medicines that address an unmet medical need — though industry stakeholders warn that the absence of a clear, unified definition of ‘unmet medical need’ creates uncertainty and could undermine incentives. The reform will also introduce new obligations for manufacturers to supply certain medicines in sufficient quantities to meet patient needs.
Separately, the EU’s new Joint Clinical Assessment (JCA), established under Regulation 2021/2282, is intended to create a harmonised approach to clinical assessment across Europe. While the JCA has been operational since January 2025, orphan medicines will only come under its scope from 2028. A centralised and consistent assessment process of clinical effectiveness could help support more equal access across EU Member States, particularly in those countries where HTA processes are at an early stage of development or have limited resources. However, a more standardised approach may inadvertently disadvantage orphan medicines amid a more limited development and evidence base. For example, a strict application of the PICO elements can raise a series of challenges, including a misalignment between the populations enrolled in rare disease trials and the diverse patient groups set by different Member States, the lack of unified standard of care (in many cases only best supportive care) leading to multiple comparators, and outcomes often relying on surrogate measures that fall short of JCA validation requirements. These technical hurdles are compounded by fragmented and heterogeneous patient communities, making it harder to integrate consistent patient input into evidence scoping and assessment processes. JCA’s assessment framework, in principle, allows methodological flexibility for certain product types (including orphan medicines), but how this flexibility will be applied in practice remains unclear.
Unites States of America
The United States has played a pivotal role in global rare disease research and orphan R&D and commercialisation, largely due to the incentive framework established by the Orphan Drug Act in 1983, which made it a first mover in this policy space. Substantial federal research funding through the National Institutes of Health (NIH) have reinforced this landscape, along with the inherently high revenue potential of the US market. Policy changes, which have accelerated over the last year, may be altering this status quo.
Federal funding has long played a key role in early-stage R&D making orphan development possible. The NIH contributed funding to 354 of the 356 medicines approved by the FDA from 2010 to 2019, and its role in rare disease research has been particularly foundational. As of June 2025, approximately 2,300 NIH grants—for a total of $3.8 billion—in funding were terminated in an effort to eliminate waste and bias in government research. Ultimately, continued cuts to NIH research could threaten early-stage R&D foundations for orphan medicines.
At the same time, provisions introduced in the Inflation Reduction Act (IRA) could negatively impact investment decisions. The IRA intended to protect orphan incentives, but it only exempted drugs that treat a single rare disease from Medicare price negotiations. This led to concerns that this policy could disincentivise manufacturers to pursue additional indications of orphan products. An early analysis of the impact of the IRA on orphan drug designations showed that the percentage of drugs with a first orphan designation that later received a second designation fell by 48%. To address this issue on orphan incentives, the exemption was ultimately expanded to medicines with multiple rare indications with the passage of the One Big Beautiful Bill Act in July 2025.
Moreover, Most Favored Nation (MFN) pricing reforms, announced by President Donald Trump in May 2025, could place further pressures on orphans’ commercial viability. By mandating that US drug prices be tied to those in comparable nations with more restrictive access conditions, MFN may undermine revenue predictability in the United States. As a result, this could reduce global incentives to invest into orphan development and has the potential of reducing availability of rare disease medicines and patient access in the US and elsewhere.
On the regulatory side, schemes designed to incentivise development include the rare paediatric disease priority review voucher (PRV) which has now been extended to 2029, and this month the FDA notably published draft guidance for a “Plausible Mechanism Framework” to accelerate development and approval of individualized therapies and ultra-rare disease treatments.
What is needed to foster equitable access to cost‑effective and evidence‑based rare disease therapies?
OHE is actively contributing research and evidence to support better decision‑making and policy in rare diseases.
Our work has shown how incorporating broader value elements and taking a societal perspective can lead to more inclusive and equitable decision-making. This is especially important for severe and early onset conditions (common characteristics in rare), where traditional assessment metrics may undervalue the full benefits of treatments.
In OHE’s BRAVER report, we illustrate this with the example of spinal muscular atrophy (SMA), a condition that places substantial emotional and practical demands on families. The report highlights how broader value perspectives can better capture these impacts and provides a roadmap for more holistic assessment in the Asia‑Pacific region.
Advanced therapies including cell and gene therapies (CGTs) hold transformative potential for rare diseases, but their high upfront costs, uncertain long-term benefits, and small patient populations challenge payers and equitable access. Innovative payment models, such as outcomes-based agreements or subscription models, can link payments to results, spread costs over time, and support affordability while preserving development incentives. Through the European Commission funded HI-PRIX project, OHE has demonstrated how these models can be designed and implemented, outlining the key challenges and conditions needed to improve access, sustainability, and equity for rare disease treatments.
Relatedly, we have demonstrated how CGTs for selected rare conditions can generate significant benefits for the UK economy. Expanding access to CGTs in three orphan indications—acute lymphoblastic leukaemia, acute myeloid leukaemia, and beta thalassemia—could deliver £1.2 billion in combined health and economic benefits over 10 years, including savings to health services and productivity gains.
It is also important to motivate progress in treatment development by capturing the value that can be unlocked by that progress, from a societal as well as industry perspective. Last year, we conducted research to support the Longitude Prize on ALS, which did just that. Amyotrophic lateral sclerosis (ALS) imposes an enormous unmet medical and socioeconomic burden, yet limited treatments and delayed diagnosis reveal a clear need to incentivise innovation. By quantifying the strategic investment opportunity in ALS—including the health, economic, and commercial value unlocked by effective new therapies—this sort of analysis demonstrates how targeted investment can deliver substantial societal benefit while also supporting a strong commercial case for innovation.
Conclusion
Current regulatory, pricing, and reimbursement frameworks determine patient access to orphan medicines across regions, in some cases leading to disparities. This Insight highlights key ongoing policy shifts, but only some of them are moving in the right direction. This highlights the challenge of establishing sustainable and affordable incentive mechanisms for the development and provision of orphan medicinal products, further underscoring the relevance of the WHO’s 10‑year Global Action Plan for Rare Diseases.