Rare Disease Is Not Rare

Living with a severe but rare genetic disease is like fighting a long, exhausting war in secret—one that, no matter how brave the fight, ends in defeat. It’s especially so for patients with Fanconi anemia (FA), whose bodies fail to safeguard their own genetic material, DNA.

In everyday life, we are constantly exposed to toxic substances that can damage our genetic material. Most people have nature’s built-in machinery to repair the errors, but a key piece of this rescue machinery is inherently lost in FA patients. This fatal mistake means a series of life-threatening symptoms and suffering that span a patient’s lifetime.

FA often affects the patient’s blood first—bone marrow failure is the earliest sign leading to diagnosis. After decades of scientific progress, this symptom can now be managed through bone marrow transplants from a matched healthy donor.

After receiving bone marrow transplants in their teenage years, most FA patients get to live with mild symptoms until their early 30s, when the disease makes its second and harder strike—cancer. Aggressive and almost untreatable cancer forms in the patient’s head, mouth, and neck. This time, the treatment options are few.

Our current understanding of FA and its treatments is the result of nearly four decades of sustained effort from scientists, clinicians, patients, and advocates. Central to this progress is the work of the Fanconi Cancer Foundation (FCF, formerly known as Fanconi Anemia Research Foundation), founded by Lynn and David Frohnmayer, parents of three daughters with FA. Confronted with a lack of knowledge, treatment options, and resources, they built a community and funding ecosystem that has supported research, clinical care, and patient advocacy. While FCF is rooted in the Fanconi anemia community, it is also part of a broader movement of patient advocacy organizations that have evolved far beyond their original roles as support networks for affected families. Today, many of these groups fund research, build patient registries, facilitate clinical trials, and serve as critical partners connecting researchers, industry, regulators, and patient communities.

FA is an ultra-rare disease, affecting approximately 1 in 130,000 births worldwide. In the United States, a disease is classified as rare if it affects fewer than 200,000 individuals under the Orphan Drug Act. Although each rare disease affects only a small number of patients, their collective impact is enormous. More than 10,000 rare diseases have been identified, affecting an estimated 30 million Americans (10% of the country) and approximately 300 million people worldwide. Yet despite advances in biomedical science, more than 90% of rare diseases still have no approved treatment. Such rarity has historically made these conditions scientifically challenging and less financially attractive to industry, creating one of the largest areas of unmet medical need in modern medicine.

At the same time, the rare disease ecosystem is undergoing a period of rapid transformation. Scientific advances in genomics, gene editing, and precision medicine have made it increasingly possible to target the root causes of genetic disease rather than simply manage symptoms. Patient advocacy organizations are playing increasingly sophisticated roles in research and therapeutic development, while regulatory agencies have established clearer pathways for orphan drugs, gene therapies, and other advanced medicines. Together, these changes are reshaping how rare diseases are studied, funded, and ultimately brought to patients.

This article will examine how rare disease innovation is funded, developed, and translated into therapies, using Fanconi anemia as a case study. Along the way, I will explore the evolving roles of federal agencies, patient advocacy organizations, academic researchers, biotechnology companies, and investors in shaping the rare disease ecosystem. As a researcher studying FA, I hope to highlight both the challenges and opportunities in this field, while encouraging more scientists, entrepreneurs, investors, and clinicians to engage in rare disease innovation. Increasingly, success in this space depends not only on scientific expertise, but also on collaboration with patient advocacy organizations that possess the disease knowledge, patient networks, and research infrastructure needed to transform promising discoveries into meaningful therapies. For those entering the field, engaging these organizations early may be one of the most effective ways to understand unmet needs, build productive partnerships, and accelerate the translation of scientific breakthroughs into real-world patient benefit.

The Fragile Economics of Rare Disease Research

For diseases like Fanconi anemia, scientific progress rarely happens quickly. Every advance—whether understanding a DNA repair pathway, identifying a cancer risk, or designing a clinical trial—often takes years of work from small groups of researchers studying patient populations that may number only in the hundreds worldwide.

These early stages of research are often invisible to the public, but they are essential. Before a therapy can ever enter a clinical trial, researchers must first understand the biology of the disease itself: which genes are mutated, how cells fail, what biomarkers can be measured, and which symptoms can realistically improve. In rare diseases, even defining the natural course of disease progression can take years.

This is one of the central challenges of rare disease research: the science is difficult, the patient populations are small, and the commercial incentives are often weak. Unlike more common diseases that attract large pharmaceutical investment early, rare disease research has historically depended on a fragile ecosystem of public grants, academic laboratories, nonprofit organizations, and patient advocates willing to sustain the work long before therapies become commercially viable.

For decades, the National Institutes of Health (NIH) has served as the foundation of this system. Much of rare disease research is supported through investigator-initiated grants, particularly R01 grants that fund discovery science and early mechanistic studies. Rather than issuing disease-specific calls for most rare conditions, the NIH often distributes funding through broad Notices of Funding Opportunity (NOFOs), allowing rare disease researchers to compete within larger scientific categories [Example of a NOFO for a rare disease]. Programs such as the Rare Diseases Clinical Research Network (RDCRN) also provide critical infrastructure for patient registries, natural history studies, and multi-institutional collaborations—resources that are especially important when patients are geographically dispersed across the world.

However, the institutions that have long supported rare disease research are facing growing pressures of their own.

Recent policy discussions within the NIH suggest that the structure of federal research funding itself may be shifting. According to an NIH guidance document released in August 2025, proposed changes could reduce the number of active NOFOs and consolidate funding opportunities into broader categories, potentially making it even harder for small and highly specialized research communities to compete for support. While these reforms are partly intended to simplify and streamline the grant system, some researchers worry that consolidation may disadvantage niche fields like rare disease biology that already operate with limited visibility and smaller applicant pools.

Researchers in the Fanconi anemia field report that securing NIH funding has become increasingly difficult in recent years. Leaders at the Fanconi Cancer Foundation (FCF) observed a record number of funding applications submitted to the organization in 2026, potentially reflecting growing pressure on the federal funding landscape. As public funding becomes more constrained, nonprofit organizations are increasingly asked to fill gaps once covered by federal agencies.

Patient advocacy organizations (PAOs) like FCF have therefore evolved far beyond their original roles as support networks for families. Many now function as active drivers of research strategy and translational development. FCF leaders described the organization as a “catalyst of early-stage research and riskier proposals focused on rare disease,” particularly in translational research, natural history studies, and therapeutic development. Rather than funding science broadly, these organizations now often prioritize projects that may directly improve patient care within shorter time horizons.

Some advocacy organizations have taken this model even further through what is often called “venture philanthropy.” The Cystic Fibrosis Foundation (CFF) provides one of the most influential examples. Beginning in the late 1990s, CFF invested approximately $150 million into Vertex Pharmaceuticals to support development of therapies targeting the underlying genetic cause of cystic fibrosis. At the time, the scientific and commercial risks were substantial. The partnership ultimately contributed to the development of Kalydeco, the first therapy to address the root cause of cystic fibrosis, and helped establish a new model for rare disease drug development. In 2014, CFF sold its royalty rights for $3.3 billion, generating resources that could be reinvested into research and patient care. More importantly, the success demonstrated that PAOs could play a direct role in de-risking therapeutic development and attracting industry investment into diseases that might otherwise be overlooked.

The timing of these funding pressures is particularly significant because scientific advances in genomics have dramatically accelerated what may now be possible in rare disease medicine. More than 70% of rare diseases are estimated to have a genetic basis, and the rapid expansion of sequencing technologies has transformed researchers’ ability to identify disease-causing mutations and design targeted therapies. Cell and gene therapies, in particular, have created new possibilities for treating disorders once considered untreatable.

Whether through traditional grant funding or venture philanthropy, PAOs have increasingly become the connective tissue of the rare disease ecosystem. They fund pilot studies, connect researchers with patient communities, support clinical trial recruitment, organize scientific meetings, and help pharmaceutical companies better understand patient needs (Figure 1). In diseases as rare as FA, these functions are often just as important as the science itself. By reducing scientific, clinical, and operational barriers, these organizations help make rare disease research more attractive to academic investigators, biotechnology companies, and investors alike.

Nevertheless, nonprofit leaders emphasize that philanthropy cannot fully replace federal investment. Foundations still depend heavily on the broader research infrastructure supported by NIH funding, including institutional resources, laboratory systems, and training pipelines for new investigators. Without that foundation, even the most motivated advocacy organizations struggle to sustain long-term scientific progress.

Yet generating scientific knowledge is only the first step. For patients, the ultimate goal is not simply understanding disease biology, but translating those discoveries into approved therapies.

Figure 1. Percentage of PAO funders that report funding medical product development activities, by type of activities funded and annual revenue. A study on the financial activities of patient advocacy organizations (PAOs) found that they invest across several key areas, including basic science, patient registries and biobanks, preclinical research, and clinical research. While basic science remains the most common area of investment, organizations with higher annual revenues are investing heavily in clinical research as well.

Commercializing Rare Disease Therapies

For much of modern pharmaceutical history, rare diseases occupied the margins of drug development. The scientific risks were high, patient populations were small, and the financial return was uncertain. Developing a therapy for only a few thousand—or sometimes only a few hundred—patients was often viewed as commercially impractical, particularly when clinical trials were expensive and regulatory pathways remained unclear.

The Orphan Drug Act of 1983 began to change that equation. By offering incentives such as market exclusivity, tax credits, regulatory support, and waived FDA fees, the legislation created a framework that made rare disease drug development more financially feasible. Since then, orphan drug approvals have increased dramatically, with more than 800 orphan indications approved between 1983 and 2019. Today, orphan-designated drugs account for more than half of recent FDA novel drug approvals, reflecting how central rare diseases have become to the modern biotechnology industry.

Yet commercialization in rare diseases remains fundamentally different from commercialization in more common diseases. In many cases, companies are not simply developing drugs—they are building entirely new scientific, clinical, and regulatory pathways around diseases that were historically understudied. Before a therapy can even enter clinical testing, companies often need to establish patient registries, define disease progression, identify biomarkers, and determine what meaningful clinical improvement actually looks like. In ultra-rare diseases, these foundational datasets may not exist at all.

These challenges are well recognized within the rare disease community. FCF leaders identified patient recruitment, biomarker development, trial design, funding limitations, and FDA approval requirements as some of the most persistent barriers to therapeutic development. Patient recruitment, in particular, remains one of the greatest bottlenecks. In diseases like Fanconi anemia, eligible patients may be geographically dispersed across countries and continents, making it difficult to recruit enough participants for traditional clinical trials. Conventional randomized trial models are often difficult to apply when patient populations are exceptionally small, forcing researchers and regulators to rely more heavily on natural history studies, surrogate biomarkers, and adaptive trial designs.

The economics of commercialization also remain challenging. Rare disease therapies—particularly gene therapies—are often extraordinarily expensive to develop and manufacture. Unlike chronic medications prescribed to millions of patients, many rare disease therapies are designed as highly specialized or even one-time treatments targeting extremely small populations. To offset development costs, these therapies frequently enter the market at prices reaching hundreds of thousands or even millions of dollars per patient.

These pricing dynamics have created growing tension between innovation and affordability. Supporters argue that these therapies may provide transformative or even curative benefit for diseases that previously had no treatment options. Critics, however, question whether healthcare systems can sustainably absorb the cost of increasingly expensive orphan drugs and gene therapies. ICER reported that some orphan therapies exceed $500,000 annually, while certain gene therapies now surpass $1 million per treatment.

Not surprisingly, investors have become more cautious toward the sector. Recent analyses suggest that clinical-stage rare disease biotechnology companies have underperformed broader biotechnology markets in recent years, reflecting growing concerns about regulatory uncertainty, reimbursement pressure, and long development timelines. A Health Capital Group analysis found that rare disease biotechnology companies significantly underperformed non-rare biotechnology firms over the past five years, with clinical-stage companies experiencing some of the steepest declines in market performance. Policy changes including reductions in orphan drug tax credits, increased scrutiny of accelerated approval pathways, and uncertainty surrounding drug pricing reforms have further contributed to investor caution.

Why Rare Diseases Are Becoming Strategic Markets

Despite these challenges, scientific advances, regulatory evolution, and the maturation of the rare disease ecosystem are creating new opportunities for therapeutic development. What was once considered scientifically impossible is increasingly becoming technically and commercially feasible.

Advances in genomics have played a central role in this transformation. More than 70% of rare diseases are estimated to have a genetic basis, and modern sequencing technologies have dramatically improved researchers’ ability to identify disease-causing mutations and develop targeted therapies. As precision medicine increasingly reshapes the pharmaceutical industry, companies are moving away from “one-size-fits-all” therapeutics toward genetically and biologically defined patient populations. Rare diseases therefore align naturally with broader trends in precision medicine, gene editing, RNA therapeutics, and personalized care.

As a result, rare diseases are increasingly viewed as strategic entry points for validating new therapeutic platforms. Technologies such as gene editing, RNA therapeutics, and precision gene therapies are often first tested in rare genetic disorders because the biology is more clearly defined, patient populations are genetically stratified, and clinical effects may be easier to measure. Success in these smaller indications can then provide proof-of-concept for expansion into broader diseases. The approvals of therapies such as Patisiran, Luxturna, Zolgensma, and more recently gene-editing and RNA-based therapeutics have helped establish rare diseases as viable early markets for platform validation and translational de-risking.

At the same time, many traditional pharmaceutical markets have become increasingly crowded and competitive. Large therapeutic areas such as oncology, immunology, and metabolic disease now contain multiple companies pursuing similar molecular targets, making differentiation more difficult and development costs increasingly high. Rare diseases, by contrast, often offer opportunities for faster regulatory pathways, reduced competition, stronger pricing power, and clearer unmet medical need (Figure 2). Industry reports from L.E.K. Consulting project that non-oncology orphan drugs alone will contribute nearly one-third of global prescription drug sales growth by 2030, reaching approximately $324 billion worldwide. McKinsey similarly notes that orphan drug development can offer strategic advantages including smaller clinical trials, accelerated regulatory pathways, higher probability of approval, and concentrated treatment centers that simplify commercialization.

Figure 2. Orphan drug development offers several advantages that can offset the challenges of rare disease commercialization. Compared with non-orphan assets, orphan drugs generally achieve faster regulatory approval (~6 vs. ~8 years from IND to approval), higher probabilities of approval (30% vs. 20% from Phase I to approval), and smaller clinical trial sizes. These characteristics help explain why rare diseases are increasingly viewed as attractive entry points for biotechnology innovation and therapeutic platform development.

Importantly, the rare disease ecosystem itself has also matured significantly over the past two decades. Patient advocacy organizations, academic medical centers, and regulatory agencies have built clinical networks, patient registries, natural history datasets, and biomarker frameworks that did not previously exist. These resources reduce uncertainty for companies entering the field and make therapeutic development more operationally feasible than it was a generation ago. Leaders at FCF described supporting pharmaceutical and biotechnology companies through patient engagement initiatives, clinical trial education, scientific conferences, and research coordination efforts that help bridge the gap between academic discovery and clinical development.

Regulatory experience has also reduced barriers to commercialization. Earlier generations of gene and cell therapies faced highly uncertain approval pathways, limited manufacturing standards, and few precedents for clinical evaluation. Today, however, multiple approved orphan drugs, gene therapies, and RNA medicines have established clearer regulatory roadmaps for developers. Regulatory agencies are also becoming more flexible toward ultra-rare diseases. In 2026, the FDA introduced a framework aimed at accelerating individualized therapies for ultra-rare conditions, while FCF leaders highlighted emerging initiatives such as the “Plausible Mechanism Pathway” and increasing interest in New Approach Methodologies that reduce reliance on animal models.

Additionally, commercialization in rare diseases is increasingly supported by collaborative funding ecosystems that extend beyond traditional venture capital and pharmaceutical investment. Organizations such as the California Institute for Regenerative Medicine (CIRM), disease foundations, venture philanthropy groups, and translational research consortia are playing growing roles in de-risking early therapeutic development. The recent FDA approval of a Rocket Pharmaceuticals gene therapy for an ultra-rare immune disorder, supported in part by CIRM and academic clinical centers, illustrates how public, nonprofit, and private stakeholders are increasingly working together to advance rare disease therapies toward commercialization.

Taken together, these trends suggest that rare diseases are no longer viewed solely as scientifically difficult niche markets. Instead, they are increasingly becoming proving grounds for the next generation of precision medicines—areas where emerging technologies can demonstrate clinical feasibility, establish regulatory precedent, and validate entirely new therapeutic platforms before expanding into broader indications.

The Next Thirty Years

For children diagnosed with Fanconi anemia in the 1990s, surviving bone marrow failure into adulthood was often unimaginable. It took more than three decades of sustained investment from scientists, clinicians, federal agencies, patient advocates, and families to transform bone marrow transplantation from a risky experimental procedure into a standard therapy that now saves the lives of most FA patients.

Today, advances in genomics, gene editing, and precision medicine offer the possibility of treating rare diseases at their biological root. We now better understand both the challenges and opportunities that shape rare disease innovation. The goal for the next generation should be simple: not just to discover cures, but to deliver them in far less than thirty years. In rare diseases, the winners are often not those with the best science, but those who best understand how to connect science, patients, funding, regulation, and commercialization.

Written By: Yibing (Shirley) Yao (PhD student in the Department of Biomedical Sciences, The Rockefeller University)

Edited By:  Xingyu (Jasmine) Hu (PhD student in the Department of Biomedical Engineering, Boston University)