As we march into 2025, two things remain true for 7% of the global population:  orphan  drug costs continue to rise and patient access remains a challenge. 

To further complicate these issues, January also brought in a new U.S. President along with the potential for radical healthcare policy change. 

With this in mind, it is more important than ever that policymakers worldwide reevaluate how rare disease treatments are incentivized, regulated and reimbursed. While there have been no executive orders issued that directly impact the Orphan Drug Act (ODA) or policies specifically related to orphan and rare diseases at this time, it is imperative that we keep our finger on the pulse for potential legislative changes—such as updates to the ODA in the U.S., evolving health technology assessment (HTA) frameworks in Europe and global pricing reforms, which have the potential to reshape the rare disease landscape. 

Due in large part  to traditional regulatory and reimbursement criteria, rare disease treatments often struggle to get through because of  small patient populations, limited clinical trial data and high development costs. Enter real-world evidence (RWE). In recent years, RWE has emerged as a critical tool for demonstrating long-term treatment effectiveness and justifying pricing decisions. Agencies like the FDA and EMA have increasingly integrated RWE into their approval frameworks, recognizing its value in supplementing clinical trial data. Thankfully, the acceptance does not stop there. Health insurers and national reimbursement agencies rely on RWE to assess treatment durability, quality of life improvements and real-world adherence patterns. And thanks to wearable technology and expanded patient registries, payers and policymakers can be provided continuous data that can help justify sustained market access for orphan drugs.

In the coming years, we can expect further regulatory alignment on RWE standards, particularly in Europe, where the EU HTA Regulation set to take effect in 2025 will require joint clinical assessments that integrate real-world data into decision-making.

Are Innovative Payment Models an Option?

The high cost of orphan drugs remains a major barrier to patient access, prompting a shift toward innovative payment models. This new approach to affordability could be the answer we need to balance access with sustained innovation.  Pharmaceutical companies and payers alike are increasingly adopting performance-based contracts, which were previously piloted with gene therapies and some cancer treatments. In this model, reimbursement is not linked to upfront costs, but rather patient outcomes. In Italy and the UK, companies have already begun implementing managed access agreements, wherein they provide conditional coverage for orphan drugs while simultaneously collecting long-term data to confirm their effectiveness. Other options that are being explored include milestone payments and risk-share agreements.  In these scenarios payments are tied to predefined milestones and/or health outcomes.  In all cases, the role and importance of RWE is undeniable, and if successful, these models could expand globally.

The Need for Legislative Support: Shaping Policy for long-term Access

Access to rare disease treatments hinges on policy-driven incentives for drug development. In terms of orphan drug availability, these are the three top policy areas to keep your eye on as we move forward in 2025:

• The Orphan Drug Act: In reference to “Reforming the Orphan Drug Act”, there is increasing bipartisan interest in the US to reform the ODA to maintain incentives for real innovations, while preventing loopholes in market exclusivity. Changes we could see include improving tax credits, expanding clawback provisions and refining eligibility criteria for orphan designation.
• Global HTA Frameworks: To more accurately account for the challenges faced by rare diseases, many countries are reassessing their HTA methods. The European Union's Joint Clinical Assessment (JCA) is set to introduce a more standardized approach to evaluating orphan drugs, which will impact how reimbursement decisions are made across member states. For more information, this article from the European Medicines Agency dissects the new HTA regulations.
• International Collaboration: Initiatives such as the Rare Disease Moonshot initiative and other rare disease networks worldwide endeavour to make data-sharing the new gold standard, while creating an international standard for orphan drug approvals. 

This presents a trifecta of opportunity to create a more patient-first, sustainable future for orphan drug development and access: RWE, innovative payment models and policy. With the continued collaboration among regulators, payers, manufacturers and advocacy groups, patient needs remain top of mind, while ensuring alignment between legislative reforms and pricing models.

Now is the time to advocate for solutions that balance affordability and sustainable access, while incentivizing development and innovation. At the time of this article, we have yet to see any major legislative shifts to orphan drug policy. However, the prevalence and frequency of this conversation suggest that change will be coming. Together, the rare disease agencies and the global HEOR community have the potential to shape these conversations and affect powerful shifts to ensure a positive intersection of innovation and access.

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