Rare diseases are often framed as a niche issue in EU health policy. In reality, they affect between 18 and 34 million Europeans, which is around 6–8% of the population, or roughly 1 in 15 citizens. That is more than the population of many Member States. Yet despite this scale, rare diseases still sit at the margins of political attention.
Part of the challenge lies in the name. Each individual condition is rare, defined in the EU as affecting less than 5 in 10.000 people, but collectively they represent a major public health issue. There are more than 6.000 identified rare diseases, most of them chronic, life-threatening, and often starting in childhood.
For patients, the reality is stark. Around 95% of rare diseases still have no approved treatment. Diagnosis can take years and is often involving multiple misdiagnoses and fragmented care pathways. Even where treatments exist, access varies significantly across Member States. This is precisely where European cooperation should make a difference.
From niche policy to European framework
Over the past two decades, the EU has built a relatively sophisticated policy architecture for rare diseases. At its core is the orphan medicinal products framework, designed to incentivise the development of treatments for small patient populations. By offering market exclusivity, fee reductions, and regulatory support, the EU has helped create a viable business case where none existed before.
Alongside this, European Reference Networks (ERNs) have emerged as one of the EU’s most tangible successes in health policy. These networks connect specialised centres across Member States, allowing doctors to share expertise and manage complex cases that would otherwise be impossible to treat at the national level.
More recently, the EU has added new layers:
- The Health Technology Assessment (HTA) Regulation, introducing joint clinical assessments to reduce duplication and align evidence requirements
- The European Health Data Space (EHDS), aiming to unlock cross-border data use for research, diagnosis, and care
- Increased research funding, including the €380 million European Rare Diseases Research Alliance (ERDERA)
Taken together, this reflects a clear shift: rare diseases are no longer treated as isolated cases, but as a systemic challenge requiring coordinated European action.
Still failing where it matters
Despite this progress, the system continues to underperform on outcomes. The “diagnostic odyssey” remains a defining feature of rare diseases. Patients often wait four to five years for a correct diagnosis. In some cases, it takes much longer. Access to treatment is equally uneven. A medicine approved at the EU level may be available in one Member State but not in another or sometimes only after a significant delay. This creates a situation where geography still determines outcomes, despite the existence of a single market. The core issue is not the absence of policy. It is the gap between EU-level frameworks and national implementation.
Significant reforms are ongoing
The EU is now entering a new phase. The pharmaceutical package agreed upon politically in December 2025 will reshape the incentives landscape for orphan medicines. It moves away from a one-size-fits-all model towards more conditional incentives, with exclusivity periods linked to factors such as unmet medical need and availability across Member States. This reflects growing political pressure to balance innovation with access and affordability. At the same time, momentum is building for a dedicated EU Rare Disease Action Plan. Indeed, the European Parliament’s SANT Committee is developing a legislative own-initiative report urging the European Commission to establish a binding EU Rare Disease Action Framework. This initiative aims to address fragmentation, improve diagnosis, boost research, and ensure equitable, sustainable access to therapies for the 27–36 million affected Europeans. In the draft report, tabled in the health committee by the rapporteur Nicolas Gonzalez Casares (S&D, ES), the Parliament calls on the Commission to propose a regulation framework with measurable benchmarks to overcome fragmented national approaches. This approach covers 6 key pillars and priority areas, such as the diagnosis/screening, access and affordability of therapies, research and innovation, data sharing and registries, support to patients, and better governance.
This is a crucial moment for European SMEs seeking to influence the upcoming Commission plan on rare diseases. Experience in Brussels shows that input from the private sector is highly valued by key stakeholders, provided it is timely and well-structured. Effective engagement in Brussels can create mutual benefits for both policymakers and industry actors. By contributing practical feedback, SMEs can help shape legislation in a way that ensures it is workable and fit for future implementation. Such outcomes can only be achieved through proactive and consistent engagement from those directly involved in the sector on a daily basis.
How Europe fares globally
Europe is not alone in facing these challenges, but it is not necessarily leading either. The United States remains the global benchmark for rare disease innovation. Since the introduction of the Orphan Drug Act, it has consistently attracted investment and delivered a higher number of approved therapies. The combination of strong incentives, faster regulatory pathways, and a large single market has created a more predictable environment for developers. At the same time, countries like Japan and Australia have refined their own models — combining incentives with targeted access programmes and public funding mechanisms. Europe’s strength lies elsewhere. Its approach is more system-oriented: integrating research, care, and data across borders. Instruments like ERNs and the EHDS have no real equivalent globally. But this also creates complexity. Where the US offers speed and scale, Europe often offers coordination — but at the cost of slower implementation and fragmented access.
The real fault lines
Looking ahead, three structural tensions will define EU rare disease policy.
1. Innovation versus access
Incentives have been successful in driving development. But they have not ensured that treatments reach all patients. The political debate is increasingly focused on linking rewards to availability, a shift that could significantly affect business models.
2. Data versus governance
Rare diseases depend on data. Small patient populations require cross-border pooling of information to enable diagnosis and research. The EHDS could unlock this potential, but only if Member States implement interoperable systems and build trust among patients.
3. EU coordination vs national control
Health policy remains largely national. The EU can set frameworks, but delivery depends on Member States and sometimes regions. This creates a structural limitation that no amount of legislation can fully overcome.
Why this matters for SMEs
For SMEs, this evolving landscape is not just a policy discussion. It is a strategic opportunity. Rare diseases are one of the few areas where EU-level decisions directly shape market conditions. Regulatory pathways, data frameworks, funding programmes, and access mechanisms are all being actively redesigned. For companies working on diagnostics, therapies, digital health solutions, or data infrastructure, early engagement at the EU level can make a tangible difference.
It can influence:
- how evidence requirements are defined
- how data can be accessed and used
- how quickly products reach multiple markets
- and how incentives are structured
In a field where margins are tight and timelines are long, these factors are critical. At the same time, the direction of travel is becoming clearer. The EU is moving towards:
- more coordinated approaches
- stronger links between incentives and access
- and greater emphasis on data and cross-border collaboration
SMEs that understand and anticipate these shifts are better positioned to scale. Those that do not risk being shaped by them.
From policy to impact
Rare diseases are often described as a test case for European cooperation. No single Member State has the capacity to address them alone. The EU has recognised this — and has built a framework that, on paper, is both comprehensive and ambitious. But the real test is delivery.
Bridging the gap between innovation and access, between data potential and practical use, and between EU coordination and national implementation will determine whether this framework translates into real improvements for patients. For businesses, the message is equally clear: this is not a space to observe from a distance.
If you are working in the rare disease space and want to understand how EU policy developments may affect your business’s growth or how to engage effectively at the EU level, feel free to reach out to Lykke Advice.
