FDA Raises the Evidence Bar for Rare Disease Biotechs: Jan 2025 to Apr 2026 Analysis

An FDA In Chaos, But the Dust May Be Settling

Starting mid 2025, a great deal of biopharma media attention has centered on FDA rejections of rare disease medicines as the administration’s new leaders have replaced the once predictable, career scientist-driven agency. Vinay Prasad announced his plan to depart the Center for Biologics (CBER) in March 2026 (for the second time), and despite the search for his replacement nearing its end, uncertainty remains regarding how CBER and the overall agency will behave going forward.

In early 2025, CBER saw the resignation of Peter Marks, whose posture toward rare disease innovative science was relatively loose and open to ‘accelerated/conditional’ approvals, allowing surrogate biomarker endpoints and single arm trials with external synthetic controls. This allowed desperate patient groups access to potentially beneficial medicines while further validation was pursued in larger, Phase III randomized controlled trials.

Vinay Prasad had taken CBER in the opposite direction from Marks, ignoring past promises from FDA reviewers, and forcing rare disease sponsors to step-up with stronger evidence of benefit. While many agree there were cases where the clinical evidence was scant, FDA reviewers had nevertheless shared their confidence in trial designs in formal FDA meetings.

A MOMENTUS Biopharma Consulting Group assessment of rare and select orphan FDA decisions since January 2025 found that 7 of 15 cases involved issues that ran counter to guidance from the prior FDA regime. Others were rejected due to failure on a primary endpoint or manufacturing issues.(Table 1)

The ‘bait and switch’ cases were rejected by the FDA with some or all of the following rationale: wrong comparator, wrong primary endpoint and/or disagreement over the patient population in the study. These are trial design parameters that should be locked in with regulators in advance of initiating a registrational trial, not new information to sponsors after submitting their BLA and NDAs.

Table 1 – Key FDA Rare Disease Rejections Since Jan 2025

Signal, FDA decision counter to original guidance; Noise, FDA rejection reasonable due to failed primary outcome or manufacturing issues.

Future Outlook

The future appeared grim for rare disease biotechs in January 2026, however sentiment may be improving as select rare disease therapies have won FDA approval in recent months despite modest proof of long term evidence. (Table 1) This shift may be due to political mindset changes in the administration since the departure of Prasad. Emerging confidence was reinforced by the recent FDA approval on April 13 of Filspari (sparsentan) for the rare renal indication of FSGS. Travere Therapeutics won approval on proteinuria biomarker, despite failed clinical outcomes in Ph3. The Filspari approval may further aid the biotech industry in overcoming fears of increased scrutiny from the agency in the rare disease field. In its summary of the Filspari approval, Fierce Pharma noted “the pendulum appears to be swinging back toward more regulatory flexibility lately.”

Implications for Rare Disease Biotech Investment

Biotech investors once interested in targeting rare disease companies may have been pulling back given this unprecedented, tumultuous FDA environment. Whether biopharma innovations are targeting orphan, ultra rare or highly specialized diseases, it is hard to speculate how investors will recalibrate their valuation and risk models considering an increasingly challenging FDA evidence posture. Will things change with the 2026 midterm elections and recent Administration changes, or is a new precedent set?

Regardless of these big questions, biotech executive and leadership teams cannot simply stick their heads in the sand … they must take action now.

Here are two fundamental recommendations from the Asset Development Team at MOMENTUS:

1. Start with the End in Mind: Instill A Process and Mindset that Optimizes Your Data for Challenging Access Hurdles

Most experts agree the FDA has probably changed forever, and the elevated bar for evidence will continue to exist in some form. The expectations of FDA reviewers will likely fall somewhere between the mindsets of Marks and Prasad.

MOMENTUS #1 recommendation to biotech executives with assets in early stages of development is to emphasize a simple change in behavior – be better at strategically informing trial designs, across all sectors of your organization. By strategic we mean factoring the needs of both Regulators (eg, FDA) and Payers (US government and private payers; and HTA bodies globally). CEOs should invest in objective, market-oriented Trial Optimization frameworks – for both Ph2 POC and Ph3 registrational trial designs. In addition, small investments in commercial readiness guidance are now common at pre-IND and Ph1 stages of development.

Investment in optimizing evidence in early to mid-development does not have to be viewed as a drain on cash. We often remind clients who balk at spending commercially in early development – “it will cost you a lot more down the line”. Investing in insights can be efficient and iterative, with strategic exercises aligned with target product profiling (TPP) and CDP development steps. The largest investment however should be in preparation for the registrational trial design.

The C-Suite should encourage Clinical Development and Regulatory to work in collaboration with Commercial and Market Access to map FDA scenarios and seek payer inputs given that their bar is always the highest. Often, obtaining payer and price attainability insights can be the key to convincing the Board to be patient and accept trial designs that are more rigorous and have a longer view.

HTA-driven payers build their hurdle around PICOS – population, intervention, comparator, outcome and study design. Their methods push expectations to the level of rigor recently being sought by FDA decision makers. This rigor provides payers with greater certainty that they are getting value for money, and that the new treatment proves an additional and meaningful clinical benefit. The PICOS readiness process should be the underlying stress test in Regulatory, Clinical Development, Commercial and Payer teams within Biotechs and BioPharmas.

2. Policy Shaping and Advocacy is a Collective Responsibility

Big pharma and innovative biotech should unite their messaging and advocate for change with FDA and overall US policy.

Pfizer’s CEO Albert Bourla in early 2026 publicly challenged the FDA leadership around recent rare disease and vaccine decision instability. But Pfizer’s voice alone will not be enough. Industry Trade Organizations — BIO and PhRMA — should work together to influence the future FDA approach. In the past year we have seen biopharma investing to lobby the FDA, which has never been seen in the past.

Mid and small sized biopharma companies are being squeezed out by recent Most Favored Nation (MFN) Pricing and Tarriff polices. The emergence of the Midsized Biotech Alliance of America (MBAA) was formed to aid smaller firms in this policy effort. This group should also be part of advocacy initiatives related to FDA.

The industry should align all messaging through their coalition of trade groups.