State of Rare Disease and Its Impact on Specialty Pharma

Rare disease has evolved from a niche scientific experiment into a core growth engine for specialty pharma. But that model is now under real pressure—to prove value, scale access, and industrialize innovation in a way that remains sustainable.^1,2
The question is no longer whether rare disease matters. It’s whether today’s operating models can keep up.

Market Reality: Growth With Structural Imbalance

The global rare disease treatment market already exceeds $200 billion and is projected to nearly double over the next decade, outpacing many traditional therapeutic areas.^3,4,1

Yet this growth masks a stark imbalance:

More than 7,000 rare diseases affect tens of millions of people worldwide
Only ~5% have an approved therapy
Investment continues to surge, but vast unmet need remains^3,4,1

Within this expansion, oncologic and neurologic rare diseases dominate both revenue and pipeline focus—areas where biology is better understood and pricing can support specialty economics.^4,5,1

This concentration creates a strategic tension. Specialty pharma must continue investing where returns are proven, while finding viable ways to reach ultra-rare and underserved conditions without destabilizing payer systems.

Specialty Pharma’s New Center of Gravity

Specialty pharma has become the operational backbone of rare disease care—spanning distribution, patient services, and outcomes tracking.

Specialty pharmacies remain the primary channel for many orphan drugs
They coordinate benefits verification, cold-chain logistics, adherence, and hub services
Annual therapy costs often exceed hundreds of thousands of dollars^6,5,7,8

At the same time, hospital pharmacies and academic centers are emerging as critical nodes for gene and cell therapies, managing complex administration and acute safety monitoring.^8,1,6

The result is a shifting division of labor. Specialty players are being pushed to evolve from dispensers of product into orchestrators of care journeys that span hospital, clinic, and home.

Economics: From Premium Pricing to Proof of Value

The historical orphan playbook—small populations paired with premium pricing—no longer guarantees stability.

Median launch prices for orphan and specialty drugs now routinely exceed $300,000 per year
Scrutiny from payers and governments is intensifying, even as unmet need remains widely acknowledged^7,9,6

In response, specialty pharma is being forced into a value-engine role, including:

Designing outcomes-based and risk-sharing contracts
Generating and managing real-world evidence
Segmenting access models by clinical severity and budget impact

Organizations that can demonstrate sustained functional benefit, not just biomarker improvement, will have greater flexibility to negotiate innovative payment structures and maintain formulary position.^10,1,7

Innovation: Platform Plays and Precision at Scale

Biologics still anchor most rare-disease revenue today, but gene therapies, cell therapies, and other precision modalities represent the fastest-growing segment of the pipeline.

Hundreds of rare-disease programs are now in clinical development, and specialty companies are increasingly organizing around platform strategies—such as shared vectors, RNA backbones, or modular biologics—so that each technical success can be redeployed across multiple orphan indications.^5,2,1

At the same time. advanced diagnostics, AI-enabled phenotyping, and genomics and newborn screening are driving earlier and more accurate disease identification. That shift demands earlier payer engagement and tighter alignment between evidence generation and access strategy.^11,2,1,4

The strategic question is no longer whether to participate in rare disease—but how quickly organizations can build infrastructure to support dozens of small, genetically defined markets simultaneously.

Strategic Imperatives for Specialty Pharma Leaders

For organizations that want to lead rather than chase the next phase of rare disease, several priorities are emerging:

Treat rare disease as a core pillar, with dedicated units integrating medical, market access, and data science capabilities^2,1
Build integrated service platforms that connect specialty pharmacy, hospital centers, and home care—especially for gene and cell therapies^1,8
Invest in data ecosystems, including registries, longitudinal outcomes, and AI-driven analytics, to continuously demonstrate real-world value and refine patient selection^4,10,1
Co-innovate with payers early, aligning evidence plans and contracting strategies from the earliest stages of development for ultra-high-cost therapies^9,5,1

The Bottom Line

The specialty pharma companies that succeed in rare disease over the next decade will be those that stop thinking of themselves as channels for high-cost drugs and start operating as system integrators for high-complexity care.^2,8

Sources

1. Rare Disease Treatment Market Size & Share Analysis – Growth Trends and Forecast (2026 – 2031)

2. Rare Disease Therapies: From Niche Experiment to Strategic Growth Engine

3. Rare Disease Treatment Market Expected to Reach USD 401.4 billion by 2035 — Global Insight Services

4. 300 Million Patients, 5% Treated: The AI Opportunity in Rare Disease

5. The 3 trends reshaping the specialty drug pipeline today

6. Rare Disease Treatment Market Size to Worth USD 587.08 Billion by 2034

7. 2025 Year-End Pharmacy Trends: What Shaped the Year and What’s Coming in 2026

8. The Evolving Specialty Pharmacy Market: Trend in Demand, Distribution, Affordability and Policy

9. Pharmacy Trends – 2025 and Beyond

10. Why 2026 will force a fundamental rethink of biopharma commercialization

11. Key trends to watch: Bridging the rare disease treatment gap