Why rare disease access works differently in small markets

A condition is classified as rare on the basis of prevalence, and the thresholds are set in law. Under the United States Orphan Drug Act, a rare disease is one affecting fewer than 200,000 people nationally. Under European Union Regulation 141/2000, the threshold is a prevalence of no more than five in every 10,000 people. The numbers differ, but the principle behind both is identical: below a certain population size, the ordinary commercial assumptions that govern how a medicinal product reaches patients stop holding.

That has consequences which are structural rather than scientific, and they are felt most sharply in small countries.

The arithmetic

Consider a product that has already been authorised by a major regulator. In a large market, the path from authorisation to availability is comparatively well worn. In a country of nine or ten million people, it is not.

The reason is straightforward arithmetic. If a condition has a prevalence of one in 50,000, a country of nine million has in the order of 180 people who could theoretically be affected. The number who are actually identified and clinically eligible is smaller still.

For the company holding the authorisation — often a small firm with a narrow portfolio — that figure does not support establishing a local operation. Doing so means registering a legal entity, preparing and submitting a national regulatory dossier, establishing compliant storage and distribution, standing up a pharmacovigilance function, and entering negotiations with a national payer.

The cost of that work is broadly fixed. It is close to the same whether the product will ultimately reach forty people or four thousand.

The predictable outcome, repeated across dozens of small and mid-sized markets, is deprioritisation. The product is authorised somewhere. It is simply not registered where a given patient lives.

What local registration actually involves

The gap is administrative, and it is worth being specific about what sits inside it.

Regulatory registration. A national authority requires its own dossier, in its own required format and language, assessed under its own procedures. Authorisation elsewhere may inform that assessment but does not replace it. Most authorities now accept the internationally harmonised Common Technical Document structure for the scientific portion, which is genuinely portable — but the regional module sitting alongside it is not, and that module is where the country-specific work lives.

A local authorisation holder. In many jurisdictions the entity holding the marketing authorisation must itself be established in that territory. This is not a formality. It determines who is legally answerable to the regulator, who is named on correspondence, who receives inspection notices and who carries responsibility if something goes wrong. A company with no presence in the country cannot hold the authorisation there without first creating one, or without appointing someone who already has.

Import and distribution. Products with defined storage conditions require a compliant supply chain end to end, together with the licences that permit importation and the records that demonstrate conditions were maintained throughout. Wholesale distribution is itself a licensed activity in most regulated markets, with its own authorisation, its own named responsible personnel and its own inspection regime.

Pharmacovigilance. A local safety reporting function is a legal obligation, not an optional service. It requires named responsible personnel, defined reporting timelines, and systems that connect to the authorisation holder. The obligation runs continuously for as long as the product is on the market, which means it is an ongoing cost rather than a one-off setup.

Reimbursement. Where a public payer funds treatment, a separate submission and assessment process applies, on its own timetable and evidentiary standard.

Patient support infrastructure. Products with complex administration or handling requirements often carry associated obligations around training, logistics and follow-up, which must exist locally.

None of these are optional, and none of them scale down. A national regulator does not reduce its dossier requirements because the addressable population is small.

The language and labelling burden

One element deserves separating out, because it is consistently underestimated by people looking at the sector from outside.

Product information — the outer packaging text, the immediate container labelling, and the leaflet supplied with the product — must generally be produced in the official language or languages of the market, to that authority’s required structure, and reviewed as part of the assessment. It is not a translation exercise appended at the end. It is a regulated document that forms part of the authorisation.

For a company operating in a language it has no internal capability in, this is not something that can be outsourced casually. The text has to be right, it has to match the authorised content exactly, and it has to be maintained. Every subsequent change to that text requires its own regulatory submission.

Which points at a broader and often overlooked cost: variations. Once a product is authorised in a market, changes do not simply happen. A new manufacturing site, a change in packaging, an update to the product information, a change in the authorisation holder’s details — each requires a formal variation submission to that authority, on that authority’s timetable, with that authority’s fee.

A company holding authorisations in forty markets is managing forty parallel streams of this administrative maintenance, indefinitely. It is the part of market presence that never ends and never generates revenue on its own.

The local partner model

The mechanism that has developed in response is the local commercialisation partner: an organisation established in the target market that performs this country-level work on behalf of the authorisation holder.

Israel illustrates the model. It is a small market by population, with a concentrated clinical community, an established regulatory authority and a national reimbursement mechanism. Several organisations operate in the space, among them a rare disease and niche specialty care company in Israel that acts as a local partner for international companies, handling registration, reimbursement navigation and patient support programmes rather than developing products of its own.

The structure matters considerably more than any individual firm within it. It moves the fixed local cost away from the authorisation holder, for whom it is prohibitive at small volumes, and onto an organisation that spreads the same infrastructure across many products and many conditions.

Registration expertise, storage and distribution capability, safety reporting systems and payer relationships are all reusable assets. That reuse is precisely what makes a market of forty identified patients administratively viable at all. Without it, the fixed cost has nowhere to go.

It is worth being precise about what the arrangement does and does not achieve. It does not reduce the regulatory burden. Every obligation still applies in full, and the authority inspects the operation exactly as it would any other. What changes is who carries the fixed cost, and across how many products it is spread. That is an accounting difference, but at these volumes an accounting difference decides whether a market exists.

Reimbursement is a separate gate

Regulatory authorisation establishes that a product may lawfully be supplied. It does not establish that a public payer will fund it. These are two distinct decisions, made by two distinct bodies, on two distinct timetables.

Israel updates its publicly funded basket of health technologies through an annual review process, in which submitted technologies are assessed and prioritised against a defined budget. Comparable mechanisms, structured differently and named differently, operate in most countries with public health coverage.

For products addressing very small populations, this stage frequently takes longer than registration, and preparing a submission that a national payer will accept is a specialised task in its own right. Authorisation and funding can therefore be separated by a considerable interval, during which the product is legally available but not publicly funded.

The interval matters commercially as well as practically. A company that has borne the cost of registration but has not secured funding is carrying an asset that generates no revenue while continuing to incur pharmacovigilance, variation and renewal obligations. Small companies frequently cannot sustain that position for long, which is one reason they seek partners who can.

Continuity is its own problem

There is a further dimension that rarely features in coverage of the sector: what happens when the arrangement changes.

Small companies are acquired. Portfolios are divested. Products move between authorisation holders. Each of those events triggers a formal regulatory process in every market where the product is registered — a transfer of the marketing authorisation, with its own documentation, its own assessment and its own timetable.

During those transitions, the local obligations do not pause. Safety reports still have to be collected and submitted. Supply still has to be maintained. Records still have to be available for inspection.

An established local partner provides continuity across those events in a way that a series of ad hoc arrangements cannot. The entity holding the distribution licence stays the same, the pharmacovigilance system stays the same, and the relationship with the authority stays the same, even as ownership changes upstream. For products serving very small populations, where any interruption is disproportionately consequential, that stability is a substantive part of what the model provides.

The cost of staying registered

Discussion of market access tends to treat registration as an event. A submission goes in, an assessment happens, an authorisation is granted, and the matter is settled.

It is closer to a subscription.

Authorisations in most jurisdictions are subject to periodic renewal, requiring their own submission and its own review. Authorities charge fees — application fees at the outset, and in many systems annual fees for each authorisation held, payable regardless of how much product moved that year. Safety reporting continues on a defined cycle for the life of the product. Distribution premises remain subject to inspection. Quality systems require periodic self-audit and documented corrective action.

For a widely sold product, none of this is remarkable; it is a rounding error against revenue. For a product serving a few dozen identified patients in a given country, the ongoing administrative cost can be a meaningful fraction of everything that product generates there — and unlike the initial registration cost, it never finishes being paid.

This is the part of the calculation that decides whether a company stays in a small market rather than whether it enters one. Withdrawal is a real phenomenon, and it is rarely driven by anything about the product itself. A portfolio review identifies markets where the annual administrative burden exceeds what the market returns, and those authorisations are allowed to lapse.

Shared infrastructure changes that calculation in the same way it changes the entry calculation. An organisation already maintaining renewals, fee schedules, safety reporting cycles and inspection readiness across a portfolio absorbs one more product’s ongoing obligations at marginal rather than full cost. The product stays registered because staying registered stopped being expensive.

Why the model professionalised

Twenty years ago much of this work was genuinely ad hoc — informal distribution arrangements, handled case by case, with variable documentation.

That is no longer viable, and the reason is regulatory rather than commercial. Distribution standards have been formalised and widely adopted. Pharmacovigilance obligations have been tightened and made explicitly personal, attached to named individuals rather than to organisations in the abstract. Inspection has become routine rather than exceptional. Record retention requirements have lengthened.

The cumulative effect is that operating as a local partner now requires a permanent, documented, inspection-ready organisation. That raised the barrier to entry considerably — and, paradoxically, made the model more useful. The higher the fixed cost of compliance, the greater the advantage in spreading it across a portfolio rather than duplicating it product by product.

An infrastructure question

It is tempting to read slow access in small markets as a failure of will. It is more accurately a failure of arithmetic, and arithmetic responds to structure.

The fixed cost of entering a national market does not fall because the population is small. What can change is who bears that cost and how widely it is spread. The local partner model exists because spreading it is the only mechanism that makes small-population registration work in practice.

That is not a solved problem. A condition affecting a few dozen identified people in a given country will never be commercially straightforward, and no organisational structure makes it so. There will continue to be products authorised in one market and absent from another for no reason connected to their merits.

But the distance between a product being authorised somewhere and being registered locally is narrower than it was — and closing it further is a question of infrastructure and administration rather than anything else. That is an unglamorous conclusion. It is also, for the markets concerned, the operative one.