Orphan Drugs Market Assessment, By Therapy Area [Oncology, Hematology, Neurology, Endocrinology, Cardiovascular, Respiratory, Immunotherapy, Infectious Diseases, Others], By Drug Type [Biologics, Non-Biologics], By Distribution Channel [Hospital Pharmacie

Global orphan drugs market is projected to witness a CAGR of 15.07% during the forecast period 2025-2032, growing from USD 208.32 billion in 2024 to USD 640.21 billion in 2032. The global orphan drugs market is being driven by a rising prevalence of rare diseases and increasing public and clinical awareness. Regulatory support and financial incentives are encouraging pharmaceutical companies to invest in specialized treatments. Additionally, targeted innovation in oncology and the dominance of North America due to strong infrastructure are shaping the market’s upward trajectory.

For instance, in March 2024, Terns Pharmaceuticals announced that the FDA has granted Orphan Drug Designation to TERN-701 for the treatment of chronic myeloid leukemia. TERN-701, which is an allosteric BCR-ABL tyrosine kinase inhibitor, is currently undergoing Phase 1 clinical development.

Rising Prevalence of Rare Diseases and Growing Awareness Are Boosting Demand for Orphan Drugs

The growing global prevalence of rare diseases, which impact over 300 million individuals worldwide, has emerged as a key factor driving the orphan drugs market. Although these diseases are rare on an individual basis, they collectively present a considerable challenge to healthcare systems. The absence of effective treatments for many of these conditions has garnered the attention of healthcare providers and policymakers, resulting in increased awareness and earlier diagnoses. Additionally, advocacy groups for rare diseases and international health organizations have intensified their efforts to inform both the public and healthcare professionals. The rise in rare disease registries and genetic databases further facilitates the development of personalized orphan drugs. Furthermore, the demand for equitable access to healthcare has encouraged pharmaceutical companies to invest in treatments for smaller patient populations. For instance, in May 2023, Amgen announced that the U.S. FDA had granted Orphan Drug Designation (ODD) to tarlatamab, a bispecific T-cell engager being evaluated for small cell lung cancer, a rare and aggressive disease. This reflects how rare disease awareness and regulatory incentives stimulate innovation.

Favorable Regulatory Support and Incentives Are Accelerating Market Expansion

Governments and regulatory authorities have implemented policies and financial incentives to promote the development of orphan drugs, which has significantly influenced the growth of the market. These measures include tax credits for clinical trials, periods of market exclusivity, grant funding, and expedited approval processes. For example, the U.S. Orphan Drug Act and comparable regulations in the EU and Japan have motivated pharmaceutical companies to invest in treatments for rare diseases, even with small patient populations. Furthermore, streamlined regulatory processes reduce barriers for new therapies. These frameworks have been essential in mitigating the financial risks associated with research and development, thus fostering innovation. The rise in designations from key regulatory bodies illustrates the effectiveness of this system. As a recent example, the FDA has recently announced that it has awarded rare pediatric disease designation to AOC 1044, an investigational therapy developed by Avidity Biosciences for treating Duchenne muscular dystrophy (DMD) in patients with mutations suitable for exon 44 skipping (DMD44).

Oncology Segment Dominates the Market Due to High R&D Activity and Unmet Needs

Among therapy areas, oncology continues to hold the largest share in the orphan drugs market, owing to the high incidence of rare cancers and substantial investments in oncology R&D. Rare cancers often lack effective treatment options, making them prime candidates for orphan drug development. With pharmaceutical companies heavily focusing on targeted therapies and immunotherapies, the oncology segment has seen an influx of orphan drug approvals. Additionally, the complexity of rare cancers encourages the use of precision medicine and companion diagnostics, driving segment-specific innovation. The high clinical unmet need also supports premium pricing for oncology-related orphan drugs. For instance, in July 2023, Bristol Myers Squibb announced the U.S. FDA approval of Reblozyl for the treatment of anemia in adults with lower-risk myelodysplastic syndromes—a rare type of blood cancer—marking an important addition to orphan oncology drugs. This reflects how oncology continues to be the most lucrative and active therapeutic area in the orphan drug domain.

North America Maintains Market Leadership

North America, especially the United States, commands the largest share of the global orphan drugs market, propelled by robust regulatory frameworks, a sophisticated biopharmaceutical sector, and substantial healthcare investments. The region's prominence in rare disease research and development, coupled with extensive patient support systems and advocacy groups, has fueled market expansion. Additionally, the U.S. Food and Drug Administration (FDA) offers advantageous pathways, including Fast Track and Breakthrough Therapy Designations, encouraging pharmaceutical companies to create treatments for rare diseases. Key biotech centers throughout the U.S. continue to draw venture capital and collaborations in the orphan drug field. In December 2023, Vertex Pharmaceuticals, headquartered in Boston, received FDA approval for CASGEVY, the first CRISPR-based gene-editing therapy for sickle cell disease—a rare genetic disorder—demonstrating North America’s innovation edge. This milestone reflects how North American policies and investments are positioning the region as a global leader in orphan drug development.

Future Market Scenario (2025-2032F)

The worldwide orphan drugs market is set for significant expansion, fueled by heightened awareness of rare diseases, progress in genetic and personalized medicine, and supportive regulatory environments that provide incentives such as tax credits and market exclusivity. Increased investments from leading pharmaceutical companies in specialized therapeutic fields, especially oncology and neurology, are further driving innovation. Moreover, the incorporation of artificial intelligence in drug discovery and the growth of newborn screening initiatives are facilitating earlier diagnosis and treatment. With patient advocacy groups and international health organizations advocating for broader access and affordability, the market is anticipated to broaden beyond affluent nations. Emerging markets and the development of biosimilars are also expected to be crucial in enhancing global access to orphan drugs in the years ahead.

Key Players Landscape and Outlook

The key players in the market are significantly investing in the development of orphan drugs and are utilizing strategies such as mergers, acquisitions, partnerships, and new product launches to improve their services and competitiveness. Such efforts will propel significant growth in the market, allowing large-cap industry players to increase their presence and, therefore, find new opportunities in this market.

For example, in September 2024, Agios Pharmaceuticals revealed that the FDA has awarded orphan drug designation to tebapivat (AG-946) for the treatment of myelodysplastic syndromes (MDS). This designation underscored the necessity for innovative oral therapies for anemia in patients with lower-risk MDS. Agios is focused on creating the first oral treatment that addresses ineffective erythropoiesis in MDS. Show more