The global orphan drug market is on a remarkable trajectory: from $193 billion in 2024 to a projected $621 billion by 2034, representing over 12% annual growth. Behind these numbers are 300 million people worldwide living with rare diseases, the vast majority of whom still lack effective treatments. For biotech companies focused on rare diseases, real-world evidence (RWE) is becoming essential to bridging the gap between innovative science and regulatory approval.
What makes this moment different? The regulatory landscape has shifted dramatically. The FDA's Accelerating Rare Disease Cures (ARC) Program, the newly announced Rare Disease Evidence Principles (RDEP), and the Plausible Mechanism Pathway unveiled in November 2025 signal a fundamental change in how regulators approach rare disease drug development. Orphan drug designations now represent over half of FDA approvals, up from 44% in 2017. The message is clear: regulators are actively creating pathways to get effective treatments to patients faster.
The Challenge That Creates Opportunity
Traditional randomized controlled trials face fundamental limitations in rare disease development. When patient populations number in the hundreds rather than thousands, conventional trial designs become impractical or impossible. Many rare diseases affect fewer than 1,000 patients in the United States. Some conditions are so rare that enrolling even a small cohort for a controlled trial would take years.
This is precisely where real-world evidence creates strategic advantage. RWE allows biotech companies to:
- Establish disease natural history through retrospective analysis of existing patient data, defining baseline progression rates that serve as comparators for treatment effects
- Generate external controls from registry data and electronic health records when concurrent placebo arms are ethically problematic or logistically impossible
- Support accelerated approval pathways by providing confirmatory evidence that complements pivotal trial results, addressing regulatory requirements with smaller patient populations
- Demonstrate clinical benefit post-approval through ongoing real-world monitoring that fulfills post-marketing commitments
Natural History Studies: The Foundation of Rare Disease Development
The FDA has emphasized natural history studies as critical infrastructure for rare disease drug development. These studies track disease progression in the absence of treatment, establishing the baseline against which therapeutic benefit can be measured. For diseases where no approved therapies exist, natural history data often provides the only viable comparator.
Recent FDA funding initiatives underscore this priority. The Office of Orphan Products Development continues to support innovative natural history studies through competitive grants, recognizing that these investments accelerate the entire drug development ecosystem for rare diseases. The March 2019 FDA guidance on natural history studies for drug development remains the foundational document, though the agency continues to refine its approach through subsequent guidance and public workshops.
Effective natural history studies accomplish several goals simultaneously. They define the patient population and disease characteristics, identify potential biomarkers, establish clinical endpoints that are meaningful to patients and regulators, and create datasets that can support regulatory submissions. When designed thoughtfully, a single natural history study can inform trial design, provide external controls, and support post-marketing evidence generation.
Regulatory Evolution: From Flexibility to Framework
The FDA's approach to rare disease evidence has evolved from case-by-case flexibility to structured frameworks that provide clearer paths forward. The Rare Disease Evidence Principles (RDEP), announced in September 2025, represent a significant milestone. Under RDEP, approval may be based on one adequate and well-controlled study plus robust confirmatory evidence, which can include natural history data, external controls, and other real-world evidence sources.
To be eligible for RDEP, therapies must target conditions with known genetic defects driving pathophysiology, very small patient populations (generally fewer than 1,000 in the U.S.), and significant unmet medical need. The Plausible Mechanism Pathway, announced in November 2025, extends this thinking further for ultra-rare conditions where traditional evidence generation is essentially impossible.
These regulatory developments create predictability. Biotech companies can now engage with FDA earlier in development to align on evidence strategies, reducing the risk of investing years in programs that may not meet regulatory standards. The FDA's Rare Disease Innovation Hub, established in October 2024, provides a centralized resource for navigating these pathways.
Patient Registries: Long-Term Strategic Assets
In rare diseases, patient registries serve multiple functions beyond traditional data collection. They connect patients with research opportunities, enable longitudinal outcome tracking, and create communities around conditions that may have few specialists and limited research infrastructure.
For biotech companies, registry partnerships offer strategic value throughout the product lifecycle. During development, registries help identify potential trial participants and characterize the patient population. During regulatory review, registry data can supplement pivotal trial evidence. Post-approval, registries enable ongoing safety monitoring and support label expansion efforts.
The economics are compelling. Registry partnerships reduce patient recruitment costs, accelerate enrollment timelines, and generate longitudinal data that would otherwise require years of prospective collection. For rare diseases where every patient matters, registries transform scattered clinical experience into structured evidence.
Looking Ahead
The convergence of regulatory evolution, genomic advances, and real-world evidence capabilities is creating unprecedented opportunities in rare disease development. Biologics now represent over 67% of the orphan drug market. Gene and cell therapies are moving from experimental to operational. The FDA approved first treatments for multiple rare conditions in 2024 and 2025 alone, including therapies for diseases that previously had no options.
For biotech companies committed to rare disease development, the question is no longer whether real-world evidence matters, but how to build evidence strategies that maximize both regulatory success and commercial positioning. Natural history studies, registry partnerships, and real-world outcome tracking are no longer optional components of development programs. They are foundational elements that can differentiate successful programs from those that stall.
With 300 million patients worldwide affected by rare diseases and only a fraction having access to effective treatments, the work ahead is both challenging and meaningful. Real-world evidence provides the tools to accelerate progress.
Exploring how real-world evidence could support your rare disease development program? Schedule a consultation to discuss your specific opportunities.
In the next post in this series, I'll explore how large pharmaceutical companies are scaling real-world evidence operations, from pilot projects to enterprise-wide infrastructure that supports label expansions, payer negotiations, and post-marketing commitments.
Sources
- Towards Healthcare. (2025). Orphan Drug Market Size Envisions USD 621.85 Bn by 2034. https://www.towardshealthcare.com/insights/orphan-drug-market-sizing
- FDA. (2025). FDA Advances Rare Disease Drug Development with New Evidence Principles. https://www.fda.gov/news-events/press-announcements/fda-advances-rare-disease-drug-development-new-evidence-principles
- Arnold & Porter. (2025). FDA's New Plausible Mechanism Pathway and Other Initiatives to Expedite Approval of Drugs for Ultra-Rare Conditions. https://www.arnoldporter.com/en/perspectives/advisories/2025/11/fda-plausible-mechanism-pathway
- FDA. (2025). Accelerating Rare Disease Cures (ARC) Program. https://www.fda.gov/about-fda/center-drug-evaluation-and-research-cder/accelerating-rare-disease-cures-arc-program
- GAO. (2024). Rare Disease Drugs: FDA Has Steps Underway to Strengthen Coordination of Activities Supporting Drug Development. GAO-25-106774. https://files.gao.gov/reports/GAO-25-106774/index.html
- NIH. (2025). RFA-FD-25-017: Efficient and Innovative Natural History Studies Addressing Unmet Needs in Rare Diseases. https://grants.nih.gov/grants/guide/rfa-files/RFA-FD-25-017.html
- Orphanet Journal of Rare Diseases. (2024). Real-world evidence for coverage determination of treatments for rare diseases. https://ojrd.biomedcentral.com/articles/10.1186/s13023-024-03041-z
- National Academies Press. (2024). Regulatory Processes for Rare Disease Drugs in the United States and European Union. https://www.ncbi.nlm.nih.gov/books/NBK609376/
