Report

Global rare disease treatment market is projected to witness a CAGR of 10.10% during the forecast period 2024-2031, growing from USD 182.54 billion in 2023 to USD 394.15 billion in 2031. The market is anticipated to grow at a faster pace owing to the growing disease burden, improved diagnostics, and novel therapies being launched under orphan drug designation. The rare disease treatment market is experiencing significant growth, driven by various factors, including advancements in medical research, increased awareness, and supportive regulatory environments.
The medical conditions affecting a very small portion of the population, typically defined as those that impact fewer than 200,000 individuals, are categorized as rare diseases, and the drugs used to treat such diseases are called orphan drugs. Developments in personalized medicine, genomics, and biotechnology are initiating opportunities for therapeutic discovery and targeted therapies catering to the unique genetic profiles of patients suffering from rare diseases. Regulatory approvals to potential drug candidates expand the plethora of treatment options for rare diseases. For instance, in March 2024, Cabaletta Bio, Inc. announced that the U.S. Food and Drug Administration (USFDA) granted an Orphan Drug Designation (ODD) to CABA-201. It is a fully human T cell investigational therapy containing 4-1BB, intended to treat systemic sclerosis (SSc). CABA-201 is being developed as a potential treatment for autoimmune diseases that are driven by B cells.
Rising Prevalence of Rare Diseases to Drive Market Growth
Increasing cases of rare diseases are being recognized as an important and emerging public health issue, with approximately 300 million affected people worldwide. The increase in diagnostics is due to improvements in diagnostic technologies and increased awareness of the healthcare professional workforce, which works with the increasing access to genetic testing. As diagnostic capabilities emerge, more cases are found whose condition had not been diagnosed prior, which tends to lead to an apparent rise in prevalence. Increased prevalence will automatically reflect an increased demand for orphan drugs, which are specifically developed to handle such sets of rare diseases. As per the data provided by the National Organization for Rare Disorders, Inc., there are more than 7000 known rare diseases around the globe, and around 25-30 million Americans live with different rare diseases. The number is anticipated to rise in the future due to enhanced diagnostics facilities, which enable more patients to be treated promptly.
Market Exclusivity of Orphan Drugs to Increase Market Growth
The market exclusivity of orphan drugs, protected by several patents, gives an extra advantage to market players as it influences the growth of the rare disease treatment market. This is because market exclusivity serves as one of the major incentives that encourage pharmaceutical companies to develop treatments for rare diseases since such diseases have smaller patient populations and correspondingly low revenues. Market exclusivity bars generic versions of the drug from entering the market during the exclusivity period. Therefore, companies can maintain higher prices. Exclusivity shapes the competitive landscape. With fewer competitors, orphan drugs should be able to support higher prices, which ought to translate into higher revenues for the manufacturers. For instance, in 2023, the USFDA gave 12 orphan approvals (new BLAs), including drugs such as Casgevy, Lyfgenia, Adzynma, Balfaxar, Cyfendus, and others. As per the Orphan Drug Act, these drugs get a seven-year market exclusivity period after they receive orphan designation.
Oncology Segment to Dominate the Rare Disease Treatment Market Share
Oncology is the most common therapy area in rare disease treatment for several reasons, primarily driven by the unique characteristics of rare cancers, historical legislative support, and the evolving landscape of drug development. Approximately 20% of all cancers are classified as rare, with hundreds of distinct types existing. The prevalence has led to a concentrated effort in developing therapies specifically for these conditions, as they often share similar challenges with other rare diseases, including limited treatment options and a lack of specialized knowledge among healthcare providers. For instance, in August 2024, Adaptimmune Therapeutics plc announced that TECELRA (afamitresgene autoleucel) received accelerated approval from the U.S. Food and Drug Administration. It is intended for the treatment of adults with unresectable or metastatic synovial sarcoma who have undergone previous chemotherapy. TECELRA marks the first approved engineered cell therapy for a solid tumor cancer to be approved in the United States. It represents the first new therapy option for synovial sarcoma in over a decade.
North America to Dominate Rare Disease Treatment Market Share
North America is anticipated to dominate the rare disease treatment market owing to several factors, such as a comparatively high diagnosis rate of rare diseases in the region and robust healthcare infrastructure. The region has a significant number of individuals affected by rare diseases, with around 30 million Americans and 1 in 12 Canadians impacted annually. This high prevalence drives demand for effective treatments. There are substantial government incentives aimed at promoting research and development in rare disease treatments. Initiatives, such as the Orphan Drug Act, provide financial benefits to companies developing therapies for rare conditions, fostering innovation. Additionally, the rise of precision medicine, which tailors treatments to individual genetic profiles, has been particularly impactful in North America. Regulatory approvals from the USFDA further enhance market growth. For instance, USFDA approved four orphan drugs to treat different rare diseases from January 2024 to August 2024.
Future Market Scenario (2024 - 2031F)
Biologics are revolutionizing the treatment landscape for rare diseases, offering innovative therapies that target specific genetic and molecular mechanisms. These biologics include monoclonal antibodies, gene therapies, and enzyme replacement therapies, which emerged as critical options for conditions previously deemed untreatable. Developing biosimilars-biologics that are highly similar to already approved products has further enhanced accessibility, allowing more patients to benefit from these advanced treatments. Regulatory bodies such as the FDA and EMA have established pathways to facilitate the approval of these therapies, ensuring that safety and efficacy are maintained while promoting competition in the market. For instance, in March 2024, Merck & Co., Inc. received FDA approval for WINREVAIR (sotatercept-csrk), a first-in-class treatment for adults with pulmonary arterial hypertension (PAH), a rare, progressive, and ultimately life-threatening disease. This biologic therapy aims to enhance exercise capacity and reduce the risk of clinical worsening in patients. WINREVAIR is a biologic administered subcutaneously every three weeks and represents a novel approach targeting activin signaling in PAH treatment, expanding options for patients suffering from life-threatening conditions.
Key Players Landscape and Outlook
The rare disease treatment market landscape is dynamic, with several notable players such as Novartis and Merck. The market has witnessed many business activities, such as strategic mergers, acquisitions, and collaborations in recent times. In March 2024, Merck & Co., Inc. completed its acquisition of Harpoon Therapeutics, Inc., enhancing its oncology pipeline with innovative treatments. The key focus is on MK-6070, a T-cell engager targeting delta-like ligand 3 (DLL3), which has received an Orphan Drug Designation from the FDA for small cell lung cancer (SCLC), a rare disease. This designation aims to facilitate the development of therapies for rare diseases. The acquisition includes other promising candidates, such as HPN217 for multiple myeloma, reinforcing Merck's commitment to advancing cancer treatment options.
In January 2024, Sanofi S.A. signed an agreement to acquire Inhibrx, Inc., a clinical-stage biopharmaceutical company, for approximately USD 1.7 billion. The acquisition adds INBRX-101, a potential best-in-class rare disease medication for Alpha-1 Antitrypsin Deficiency (AATD), to Sanofi's pipeline. INBRX-101 has completed a Phase 1 trial and is enrolling in a Phase 2 trial. It could significantly improve treatment options and quality of life for AATD patients.