Why global pharmaceutical reforms are quietly redirecting rare disease innovation

For an emerging biopharma company developing an innovative therapy for a rare condition, 2026 presents a dilemma that may have produced a very different outcome three years ago: where to launch first, the EU, UK, or the US?

The confluence of three forces — a sweeping overhaul of EU pharmaceutical legislation, intensifying pricing pressure in the UK, and transformative regulatory change in the United States — is quietly recalibrating the calculus for drug makers. For emerging biopharma companies with limited capital and single high-value indications, the once common US-first assumption no longer holds by default. A more nuanced approach to commercial planning that addresses the relative changes in these markets is now a strategic imperative.

Understanding how to best proceed requires an examination and evaluation of what has changed on both sides of the Atlantic.

The EU pharma package: Opportunity wrapped in compliance burden

The publication of the 2026 Pharma Package by the Council of the European Union in March of this year represents the most significant reform of EU pharmaceutical legislation in over 20 years. It aims to improve access to innovative medicines, promote research and development, combat antimicrobial resistance, and streamline regulatory processes.

For drug makers focused on rare diseases, the headline change involves a two-tiered exclusivity system for orphan medicines, which has important implications for commercial planning. Under the current model, innovators benefit from the 8+2 model, with eight years of data protection, two years of market protection, and a possible additional year based on a new therapeutic indication. The new model is 8+1(+1)(+1), with more stringent criteria around the additional extension periods. This is a meaningful distinction, but qualifying for it requires a deliberate development strategy that factors in commercial impact from the earliest stages.

But the compliance burden cuts hard in the other direction. The new legislation ties full OME periods to commercial availability across all 27 EU Member States. Companies that fail to launch across the block within two years of marketing authorisation risk losing regulatory data and market exclusivity, with protection potentially falling back to eight years — enabling earlier generic or biosimilar competition. SMEs receive a three-year window, but the requirement itself forces companies to engage complex multi-market supply chains, mandatory shortage prevention plans, and end-to-end cold chain and distribution infrastructure from day one.

In addition to exclusivity changes, the European Medicines Agency (EMA) scientific assessment timelines will be reduced from 210 to 180 days. EMA will grant orphan designations directly within 90 days. Regulatory sandboxes will allow small-batch therapies such as advanced therapy medicinal products (ATMPs) — gene editing tools, cell therapies, tissue-based treatments — to be tested in real-world settings under relaxed guidance before full market launch. For smaller companies, these can represent meaningful runway extenders, but also compressed timelines that may accelerate funding requirements.

The cost of adapting to these changes, including specialised distribution partners, accelerated commercial planning, limited distribution drug (LDD) frameworks, and supply chain resilience systems, can create an added burden in the EU, often exceeding what early-stage capital can absorb. A practical implication may be many companies choosing to prioritise a single indication, accelerating dependence on early partnerships or acquisition by larger pharmaceutical companies to manage the costs. This is not necessarily a bad outcome, but it is a constrained one for drug makers.

UK pricing reforms: Distinct commercial planning required to unlock market potential

At the same time, the United Kingdom presents a rapidly shifting and newly consequential pricing environment that emerging biopharma companies can no longer treat as a secondary consideration. For years, the UK was characterised by two compounding liabilities: a low likelihood of a positive NICE reimbursement decision and a challenging commercial environment driven by rebate requirements that climbed to 22.9% of industry UK turnover in 2025. The environment was blamed for discouraging rare disease drug launches, with fewer than half of EMA-approved orphan medicines receiving a positive recommendation from NICE or the Scottish Medicines Consortium between 2021-2025.

In December 2025, NICE raised its cost-effectiveness thresholds by 25% — from £20,000–£30,000 to £25,000–£35,000 per QALY — the first major adjustment in over two decades, with the new thresholds taking effect in April 2026. For ultra-rare disease therapies, NICE's Highly Specialised Technology programme now applies a threshold of up to £300,000 per QALY. Simultaneously, the VPAG rebate rate for newer medicines has been reduced from 22.9% to 14.5% for 2026, linked to the UK-US pharmaceutical trade deal.

Taken together, these changes make the UK a meaningfully more viable launch market than it was 18 months ago. However, structural differences between the UK and other major regions like the US and EU remain significant. Unlike the EU, where the new HTA regulation centralises clinical value assessment while leaving pricing to member states, the UK relies heavily on NICE's QALY-based methodology to govern access. And unlike the US, where pricing is largely market-driven at launch, UK net pricing is shaped at the point of reimbursement approval.

For emerging biopharma companies, this means the UK demands an evidence package and value narrative calibrated specifically for a cost-effectiveness framework — not a revenue-maximisation framework — making it a distinct commercial planning exercise from the US, and one that must be built into launch strategy from the clinical development stage, not retrofitted after approval.

The US landscape: Pressure and opportunity in the same frame

Biotech launches in the US in 2026 are shaped by three countervailing forces: changing economics from the Inflation Reduction Act (IRA), more recent regulatory changes that impact rare disease innovators, and the rebounding of biopharma capital markets.

The IRA, signed in 2022, introduced Medicare drug price negotiation and initially created a significant unintended consequence for rare disease developers: orphan drugs were only exempt from negotiation if they carried a single approved indication, creating a direct disincentive to pursue additional rare disease labels. That structural problem was partially resolved by the One Big Beautiful Bill Act, signed in July 2025, which broadened the orphan drug exclusion to cover products with multiple rare disease designations — provided every approved indication remains within the orphan space. Furthermore, new draft FDA guidance allows small companies to use "plausible mechanism" evidence for approval of personalised therapies for genetic diseases where large clinical trials are unfeasible — a provision purpose-built for the conditions where ATMPs are most often developed.

At the same time, the Trump administration's Most Favoured Nation executive order, issued in May 2025, introduced a parallel pricing pressure mechanism by directing that US drug prices should not exceed the lowest prices paid by comparable nation. While the policy’s full enforcement and impact is still taking shape, the order may discourage emerging biopharma companies from launching in Europe, sometimes done to build real-world evidence, to avoid the impact of MFN pricing.

Simultaneously, capital is also recovering, with US biopharma companies raising $1.7 billion in IPO proceeds in Q1 2026 — the strongest quarter since 2021 — and venture funding reaching $5.2 billion in the same period. With the US capturing approximately 65-70% of global venture capital and R&D funding, it is worth noting the importance of this trend for small, rare disease companies that depend on external financing to reach their next clinical milestone.

Despite the IRA headwinds, there are clear structural developments, both regulatory and economic, that strengthen the case for a US-first strategy for some orphan drug makers.

Global commercial planning: Now a multivariate analysis

As countries and regional governing bodies continue to drive reforms designed to enhance innovation and access to ground-breaking therapies, emerging biopharma companies find themselves navigating some of the most complex planning decisions in history, with the relative benefits of each region now far from standard or formulaic.

Together, these reforms have transformed what was once a relatively straightforward geographic decision into a multidimensional strategic exercise. The companies best positioned to succeed will be those that rethink commercial planning around these fundamental principles:

• Commercial planning can no longer start after pivotal data is generated. Decisions around indication selection, clinical development, regulatory strategy, and launch sequencing now have commercial impact from the earliest stages of development.
• Launch sequencing should be evaluated globally, rather than market by market. Companies must weigh where different types of innovation are most likely to receive favourable regulatory treatment, reimbursement, and commercial return before determining launch order.
• There is no one-size-fits-all launch strategy. The right sequence will require an analysis of key factors that might offer advantage in a given region, including molecule type, indication count, capital position, and evidence package.
• The level of country- and region-specific expertise required to optimise commercial planning will likely exceed that of a typical biopharma start-up team. Companies will increasingly need to build flexible networks of experts to continuously monitor and respond to regional changes.
• Capital needs for an earlier, deeper level of commercial planning will require additional education and communication with investors who may not have historically funded this type of activity.

For small-cap rare disease companies weighing their first commercial move, there is a lot to consider. Success will increasingly depend on getting the strategy right before launch. Decisions around orphan indication sequencing, partnership timing, evidence generation, and regulatory filing order now shape not only initial commercialisation, but the long-term value of an asset.

The window created by today's reforms will not remain static. As governments continue refining policy, companies that build flexibility into their commercial strategy will be better positioned to bring innovative therapies to patients. In rare disease, timing often determines not only commercial success, but whether a therapy reaches patients at all.

About the author

Serving as general manager, international business unit, EU/UK at AscellaHealth, Gillian Molloy brings almost 20 years of experience in the life sciences industry in both the European and US markets. She has held commercial and market access leadership positions at Baxter, Novartis Oncology, and AstraZeneca, as well as trade relations and formulary strategy leadership roles at UnitedHealth Group. At AscellaHealth, Molloy provides strategic innovation and consultative market access support to pharmaceutical manufacturers and healthcare organisations.Prior to moving into the life sciences industry, Molloy held a chief pharmacist position in the Mater Misericordiae University Hospital, Dublin. Molloy holds a Bachelor of Science (Pharmacy) and a Master of Science (Hospital Pharmacy) from the University of Dublin, Trinity College, as well as a Master of Business Administration from University College Dublin Michael Smurfit Graduate Business School. Gillian also has a Diploma in Health Economics from the National University of Ireland Whitaker School of Government and Management.