Insights from the Third Annual Ropes & Gray Rare Disease Forum

Ropes & Gray recently hosted its Third Annual Ropes & Gray Rare Disease Forum on May 1, 2025 in Cambridge, Massachusetts. The event gathered legal, commercial, and patient advocacy experts in the rare disease community to explore ongoing regulatory reforms, policy change, legal developments, and shifts in compliance and enforcement risks as we passed the first 100 days of the new administration. Panelists provided timely insights into the implications for the development and commercialization of rare disease products and expressed their outlook on what is to come. Here are some key takeaways from the forum.

Evolving Policy Landscape

• Despite agency leadership turnover and recent reduction-in-force measures at the U.S. Food and Drug Administration (“FDA”), there exists optimism around rare disease policy objectives. Despite recent agency departures and leadership turnover at FDA, in addition to restructuring efforts that included layoffs of thousands of FDA employees, panelists remain hopeful that rare disease policy objectives can continue to progress. New forms of regulatory flexibility may emerge, such as a potential new rare disease drug approval pathway that FDA Commissioner Makary previewed in recent public comments, but it is hard to predict which regulatory initiatives will be prioritized or whether new agency leadership will be aligned on implementation. Because the current policy landscape is dynamic, with changes unfolding quickly in areas such as newborn screening, research funding, and regulatory reform, panelists emphasized the importance of staying informed and continuing to use effective storytelling to advocate for rare disease patients and the advancement of new therapies.
• Tariffs and global trade policies will likely impact rare disease drug supply chain and pricing decisions. Many questions remain around how tariffs globally may be levied on a country-specific basis or on certain pharmaceuticals, and how countries will react and respond to any changes. Panelists discussed trends moving from globalization to national protectionism and how price increases at ports of entry are likely to affect rare disease drug pricing across jurisdictions.

Hot Topics in Rare Disease Drug Development

• Decentralized clinical trials (“DCTs”) improve rare disease patient retention and opportunities for data collection but present challenging global execution and state-level complexities. Conducting clinical trials at locations other than traditional clinical trial sites (e.g., via telehealth or in-home visits) increases access to trials and convenience for rare disease patients, which enhances patient retention and data generation. Difficulties remain, however, in embracing DCTs in the rare disease space. Panelists discussed strategies for dealing with a lack of legal and regulatory harmonization of DCTs across jurisdictions, including how to approach regulator feedback on trial design, state-specific licensure limitations, payor reimbursement challenges, and third-party vendor oversight.
• Real World Evidence (“RWE”) continues to be a significant focus in rare disease drug development and global regulatory decision-making. Panelists discussed ways in which U.S. industry stakeholders are engaging with FDA on RWE, how regulatory initiatives in the European Union are embracing the generation and use of RWE, and how the adoption of RWE in Asian countries continues to evolve.
• Innovative applications of artificial intelligence (“AI”) in rare disease drug development raise important questions such as “Is this AI-tool a medical device?” and “Will it be a focus of FDA’s regulatory oversight?” AI-based tools continue to revolutionize how we approach drug development, clinical research, and patient care. Innovative applications, such as in predictive molecular biology, biomarker identification, clinical trial design, and medical imaging across disease states, raise logistical and regulatory complexities. Panelists stressed the need to analyze any use of AI-based tools from regulatory, fraud and abuse, and data privacy perspectives. Among other things, developers must assess whether the intended use of a tool qualifies it as a medical device and, if so, whether the risk profile may lead to heightened regulatory scrutiny.

Deal Trends and Considerations

• Advancements in technology and the identification of new rare and ultra-rare diseases lead panelists to believe that the outlook for rare disease transactions is encouraging. Advancements in genetic testing and diagnostic tools are helping to accelerate time to diagnosis and earlier intervention for rare disease patients. Combined with the identification and classification of previously unknown rare and ultra-rare diseases, panelists anticipated the emergence of new small-cap biotech companies that will drive future transactional opportunities.
• Rare disease deal valuations and probability of success depend not only on speed to market but also on market reactions. The nuances of rare disease drug development can significantly impact deal valuation and probability of success. Panelists addressed how unique factors that can increase speed to market, like combined clinical trial phases and the prospect of accelerated or conditional approval, must be weighed with factors that impact market access and uptake, like the success of confirmatory studies and pricing and reimbursement strategies.
• Building an “apples to apples” comparison is key to articulating a clear and persuasive position in deal negotiations. Panelists weighed in on the importance of pulling relevant “comps” for similar rare diseases and therapeutic areas and being mindful of the historical context of prior deals. Creative tactics for developing progress-based milestones and aligning party expectations were key to the discussion.

Compliance Considerations and Enforcement Insights

• Ropes & Gray hosted keynote speaker Joshua Levy, former U.S. Attorney for the District of Massachusetts and Partner in Ropes & Gray’s Litigation and Enforcement practice group. Key topics included enforcement priorities in health care and life sciences, anti-kickback theories in the rare disease context, the paramount importance of building a strong corporate culture, working with the whistleblowers’ bar, and notable False Claims Act recovery cases. Additional themes included:
  • Therapeutic areas associated with big spend and potential risks of patient harm are more likely to draw scrutiny. Rare disease therapeutics linked to expensive genetic testing and high drug prices face heightened scrutiny in public media and the eyes of government regulators. High profile cases with the potential for a strong deterrent effect are seen as enforcement priorities.
  • Companies can mitigate enforcement risk through a demonstrated commitment to a culture of compliance. Maintaining a company culture that values and prioritizes compliance is critical to avoiding fraud-and-abuse pitfalls and protecting companies when individual actors may cross the line. Showing how a company concretely elevates the importance of compliance and empowers its employees to report identified issues promptly can help the company advocate for itself effectively with the government and mitigate risk. Taking real action to cooperate with the government when a company has committed to that path can also go a long way towards building trust and reaching the best outcome possible.
• Sponsored genetic testing programs will likely continue to be a target of enforcement based on theories of potential Anti-Kickback Statute and False Claims Act violations. In recent years, the Department of Justice and the Department of Health and Human Services Office of Inspector General (“OIG”) have investigated and prosecuted high-profile cases involving pharmaceutical companies offering sponsored genetic testing programs. OIG has issued two favorable advisory opinions under which sponsored genetic testing programs can be administered (see Advisory Opinions 22-06 and 24-12). Companies seeking to limit risk should stay abreast of enforcement activity and avoid “plus” factors that may increase the risk of scrutiny.
• Compliance reviews are critical for industry engagements with rare disease patient advocacy organizations and patient ambassadors. Patient advocacy organizations and patient ambassadors are sophisticated members of the rare disease community that play a critical role in advancing disease awareness and policy. Panelists discussed the complexities that collaborations may present (e.g., collaborating through grants, sponsorships, or congresses) and the challenges associated with needing to maintain regulatory compliance while providing transparency and building community trust.