From Well-Trodden Path to Uncharted Needs: Pharma’s Response to Rare Diseases

Emir Veledar (), Peter McGranaghan () and Omar Veledar ()
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Emir Veledar: The University of Miami Miller School of Medicine
Peter McGranaghan: Semmelweis University
Omar Veledar: Beevadoo E.U.

A chapter in Proceedings of the Kautz Conference on Business and Economics 2025 (KCBE 2025), 2026, pp 31-49 from Springer

Abstract: Abstract The pharmaceutical industry’s focus has dramatically shifted from mass-market blockbusters to addressing the needs of rare diseases. This paper compares the traditional, volume-driven approach of “Old Pharma” with the patient-centric, innovation-led strategy of “New Pharma,” highlighting the changes in economic viability and development timelines. Historically, conventional drug development, with costs over $1 billion and timelines of 10-15 years, made rare diseases commercially unappealing. However, the Orphan Drug Act of 1983 introduced incentives that fundamentally altered this landscape. When combined with advancements in targeted therapies like gene, cell, and RNA modalities, “New Pharma” for rare diseases now benefits from streamlined development. Direct costs can be as low as $47 million, and in some cases under $25 million, with notably faster launch timelines. This study presents a structured comparison across scientific, economic, and regulatory dimensions and illustrates how artificial intelligence (AI) accelerates the drug lifecycle. AI enables faster discovery, shorter clinical trial recruitment, improved patient management, and streamlined production, which is especially relevant for rare diseases, where diagnostic delays and limited patient pools remain challenges. The future of this market points to continued expansion, driven by advanced therapies and AI. This will require ongoing adaptation, ethical governance, and multi-stakeholder collaboration to ensure equitable patient benefits in these previously unexplored therapeutic areas.

Keywords: Classic Pharma; New Pharma; Rare Diseases; Therapeutic Innovation; Regulatory Strategy (search for similar items in EconPapers)
Date: 2026
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DOI: 10.2991/978-94-6239-658-6_3

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