In 2024, 50% of the novel drugs approved by the FDA had an orphan drug designation. In the last two decades, orphan drug research has significantly accelerated and allowed innovative biotechs to build pipelines and become acquisition targets.
However, recent federal funding cuts and a slackened legislative process are now raising concerns among researchers, patient advocates, and biotechs about the future of rare disease research.
Rare disease research has come under the spotlight, not just because several biotechs were able to leapfrog into the big leagues with successful product launches, but also because the US and European regulatory systems introduced successful schemes to incentivise this research. One such gambit was the FDA’s Rare Disease Innovation Hub, launched in July 2024, designed to engage with the rare disease community and support orphan drug research.
When the Hub was launched, the heads of two FDA agencies, the Center for Drug Evaluation and Research (CDER) and Center for Biologics Evaluation and Research (CBER)—Dr. Patrizia Cavazzoni and Dr. Peter Marks—were meant to co-lead the Hub. In November, Amy Comstock was appointed Director of Strategic Coalitions for the Hub.
A lot has changed since then. Cavazzoni left the FDA and joined Pfizer as a chief medical officer in February, while Marks resigned and publicly denounced Robert Kennedy Jr. in a letter where he highlighted the Department of Health and Human Services Secretary’s need for a “subservient confirmation of his misinformation and lies.”
At the BIO International Convention, held last month in Boston, Comstock reiterated the Hub’s commitment to support rare disease research and invited the rare disease community to forge a stronger network to take advantage of a shared experience.
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By GlobalDataHub acts as a link for rare disease research
So far, the Hub has been working with borrowed resources from CDER and CBER since there was no outlay for it in the 2025 budget. There is a need for a comprehensive budget and resources, Comstock said matter-of-factly, or “the Hub is unlikely to achieve the success it’s looking for and intended to have.” While the overall goal of the Hub is aligned with the new administration, Comstock acknowledged the FDA has undergone organizational changes in the last few months.
Nonetheless, one of the significant outcomes of the Hub’s work has been setting up the framework for the Rare disease Innovation Science and Exploration (RISE) workshop series, which is designed to take a deep dive into an issue relevant to the rare disease space.
The first workshop will be held in September, and topics for future workshops, facilitated by the Duke Margolis Health Policy Center, will be chosen by the rare disease community. The first workshop will focus on options for control arms for small populations—historical controls, registries, and more, said Comstock. The inherent limitation of having few patients to study with a particular rare disease has necessitated alternative designs, but the lack of a regulatory guidance that is absolute and binding for all scenarios has often been cited as a challenge.
The September workshop will feature patient advocates, biotechs, and disease organizations to talk about trials where a placebo is not an option, and information discussed then will be used to create a report. Comstock said it is not yet clear if the report will be turned into an official agency guidance document, but it will be made publicly available.
Given the way the Hub is set up, it can closely engage with the rare disease community—biotechs, advocacy organisations, and more—without conflicts since it is not involved with the drug review process. The goal is to have systems in place such that all institutional knowledge—gained in different agencies through relevant patient-focused drug development and prior applications—is brought to a drug approval application, explained Comstock.
However, a review of existing educational materials, like information on potential grant or support opportunities at the FDA or materials for advocacy organisations and the larger community—another one of the Hub’s goals—is on hold due to a lack of resources, said Comstock.
Policy decisions on the Hill hamper progress
A key factor driving rare disease research amongst biotech companies has been incentives like the Priority Review Voucher or PRV program and orphan drug designations that allow for expedited approvals and tax credits. Under the former, companies developing therapies that address unmet needs like rare pediatric diseases, neglected tropical diseases, and material threat medical countermeasures get expedited review for a drug, and an additional voucher once the drug is approved, which the company can sell to raise cash.
However, the PRV program for rare pediatric diseases is at risk of expiry in September 2026, and is pending renewal. At BIO, David Ridley, a health economist at Duke University, said based on the reauthorisation experience in 2016, the program is likely to be renewed, but in the meantime, “this is slowing down drug development by a couple of years for many of these drugs.”
“I don’t think there’s a sense of emergency, because they’re [the FDA] still, they’re still awarding vouchers, but investors are feeling that uncertainty, and scientists are feeling that uncertainty,” said Ridley.
The lack of reauthorisation of the PRV program is also “a huge concern” for the patient community, said Karin Hoelzer, PhD, Senior Director, Patient Advocacy, Biotechnology Innovation Organization (BIO). Moreover, other threats to the early-stage drug development for rare diseases are also a concern. At the time, Hoelzer highlighted the provisions concerning orphan drugs in the Inflation Reduction Act (IRA), but recent weeks have materially changed the situation.
While the IRA exempts orphan drugs from the Medicare price negotiation process, it was designed to do so only for drugs approved for one indication. The ability to get more than one approved indication for an orphan drug has been a major financial incentive for biopharma to invest in this research, patient advocates and industry lobbyists have long argued.
After some back and forth, the Orphan Cures Act, which addressed this topic, was included in the One Big Beautiful Bill, which was signed into law on July 4. The Act should exclude orphan drugs approved in more than one indication from the price negotiation process as long as the additional indications are rare diseases. It also modifies the period after which the drugs would be eligible for price negotiation in non-orphan indications.
Outlook for the future
A fair amount of trepidation around the future of clinical research for rare diseases has arisen due to the volatility that has accompanied the regime change at the HHS and FDA.
A recent high-profile case was of KalVista Pharmaceuticals’ drug sebetralstat, indicated for the rare genetic disorder hereditary angioedema. In a pointed June 13 release, the company said the FDA was going to miss the drug’s Prescription Drug User Fee Act (PDUFA) date due to the agency’s “heavy workload and limited resources.” Soon after, at BIO, FDA Commissioner Dr Marty Makary insisted recent funding cuts had not affected reviewers at the FDA and that the agency was on track to meet all targets. A few days later, however, Endpoints News reported that there were efforts traced to Makary to persuade officials to issue a complete response letter (CRL) to the company, which was denied by an HHS spokesperson. Sebetralstat was approved under the marketed name of Ekterly on July 7.
Nonetheless, in a recent public roundtable centered on cell and gene therapies, Kennedy said, “We are going to continue to figure out new ways of accelerating approvals for rare disease drugs and treatments. We are going to make this country the hub of biotechnology innovation.”
As the field adapts to an evolving research environment, advocates, policy experts, researchers, and patients will need to adapt to sustain the work built over the last few decades in highlighting the need for medical advancements for rare diseases.
