 specializes in brand strategy, product launch, and advanced analytics. He helps companies navigate critical decisions across the asset lifecycle, from early strategy through launch execution, with a focus on maximizing patient access to treatment. Drawing on expertise in analytics, ML, and AI, Michael combines quantitative rigor with cross-functional insight to support more robust strategy and informed decision-making.

Michael Bianco

Rare disease words collected with wooden cubes | Image Source: ©megaflopp stock.adobe.com

For decades, the blockbuster drug model has defined pharmaceutical value creation. A small number of high-revenue products could support expansive pipelines, global commercial infrastructure, and sustained shareholder returns.

The blockbuster model drives a boom-and-bust cycle rooted in revenue concentration, accelerating patent cliffs, and rising capital requirements. For a limited subset of capital-rich pharmaceutical companies, this approach continues to deliver strong outcomes in which they are able to acquire or develop new assets to overcome cycles of bust. However, for much of the industry, the blockbuster model is wholly unsustainable.

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Internally developing a true blockbuster is uncommon, costly, and statistically unlikely. As scientific complexity increases and competition intensifies across major therapeutic areas, many companies find that internal pipelines alone cannot reliably generate large-scale commercial assets.

This dynamic forces greater reliance on external acquisition, where competition for late-stage blockbusters is intense and valuations are high.

 The result is heightened portfolio volatility and increased strategic risk.

In contrast, rare disease drugs offer a structurally different value proposition. Rather than functioning as niche or opportunistic assets, orphan drugs can serve as portfolio stabilizers that deliver durable revenue, reduced volatility, and meaningful downside protection.

This article examines how revenue concentration and patent cliffs expose systemic portfolio risk, why orphan drug economics differ fundamentally from traditional blockbusters, and why portfolio construction, rather than asset-level optimization, is emerging as the key for sustained, long-term value creation in biopharma.

How is the blockbuster model structurally fragile?

The traditional blockbuster paradigm is built on scale and concentration. In many large and mid-cap pharmaceutical portfolios, a small number of products account for a disproportionate share of total revenue. While this concentration can amplify growth during peak years, it also creates structural fragility. Portfolio-level analyses consistently show that dependence on one to three mega-franchises exposes companies to significant downside risk when competitive dynamics shift or products approach loss of exclusivity.

The degree of revenue concentration across biopharma portfolios is staggering. In many cases, non-blockbuster assets collectively contribute far less to overall revenue than a single top product (

). This imbalance leaves portfolios highly sensitive to asset-specific shocks, whether from regulatory changes, competitive innovation, or pricing pressure.

Figure 1: Analysis of 2024 gross revenue among pharmaceutical manufacturers, including revenue from subsidiaries, subdivided between revenue from “blockbuster” drugs (≥$1B in 2024 revenue) and “non-blockbuster” drugs (<$1B in 2024 revenue). Revenue may include ex-US revenue. Figure courtesy of the author.

Historically, internal research and development occasionally produced blockbuster outcomes that refreshed portfolios organically. Today, that pathway is increasingly constrained. Rising clinical trial costs, longer development timelines, and higher attrition rates have reduced the probability that internal pipelines will consistently generate blockbuster-scale assets.

 In addition, many of the largest therapeutic categories have become crowded, with multiple competitors targeting similar mechanisms of action, further diluting upside potential.

As internal innovation becomes less predictable, acquisition pressure rises. Companies must increasingly rely on mergers and acquisitions or in-licensing to secure growth.

 These transactions require substantial capital and often occur in competitive bidding environments, compressing returns. For organizations without the balance sheet strength to repeatedly pursue large acquisitions, reliance on blockbusters becomes less a strategic choice and more a structural vulnerability.

How are patent cliffs a portfolio-level threat?

The risks associated with revenue concentration become most acute at loss of exclusivity. Over the coming decade, a significant share of global pharmaceutical revenue is projected to face patent expiration. Between 2025 and 2037, nearly 600 drugs are expected to lose patent protection, placing more than $330 billion in forecasted revenue at risk among multi-blockbuster products with annual revenues exceeding $3.5 billion (

Figure 2: Analysis of total anticipated patent expiries in the United States by year, from 2025–2037, including only patents limiting exclusivity of the respective drugs. Figure courtesy of the author.

What distinguishes the current environment from prior patent cycles is the speed and effectiveness of post-loss-of-exclusivity (LOE) competition. Biosimilars and generics are no longer incremental entrants that slowly erode market share; they now operate within a mature, well-capitalized ecosystem designed to capture share rapidly following exclusivity loss. Recent changes to the FDA biosimilar program, including the removal of the comparative efficacy study requirement, have further lowered development time and investment barriers, requiring demonstration of molecular similarity rather than functional comparability.

 Together, these shifts signal a regulatory intent to accelerate biologic price competition, resulting in immediate and often steep price erosion once exclusivity ends.

Payer behavior further amplifies this effect. As cost-containment pressures grow, payers increasingly encourage rapid switching to lower-cost alternatives, particularly in high-volume indications. This dynamic compresses revenue replacement timelines and magnifies the financial impact of LOE events.

Figure 3: Sample of highest-revenue drugs with anticipated patent expiries in the United States by year, from 2025–2037. Includes drugs with ≥$3.5B in 2024 revenue.* Total loss of revenue by year calculated in green boxes. Manufacturer listed reflects parent company primarily responsible for marketing drug in the US, and does not account for co-commercialized drugs. *Note: revenue may include ex-US revenue. Figure courtesy of the author.

For portfolio leaders, the challenge is not simply that patent cliffs exist, but that they often overlap across multiple high-revenue assets within the same portfolio. Clustered expirations can create simultaneous revenue shocks that overwhelm incremental growth elsewhere in the portfolio (

). Late-stage pipelines frequently lack sufficient scale to offset these losses, and internal R&D timelines rarely align with the urgency imposed by near-term LOEs. These dynamics reinforce the need for portfolio-level solutions that mitigate volatility, rather than reactive, asset-by-asset responses that address symptoms rather than structure.

How do orphan drugs as stabilize revenue?

Against this backdrop, orphan drugs exhibit a fundamentally different economic profile. While rare disease markets are smaller by definition, orphan assets often demonstrate greater revenue persistence, reduced competitive churn, and more predictable lifecycle performance than non-orphan drugs. On average, orphan drugs not only achieve comparable or higher peak revenues, but they often reach peak more quickly and decline more slowly (

). The cumulative effect is materially greater total lifecycle revenue despite smaller patient populations.

Figure 4: Analysis of median per-year revenue for drugs first approved for any indication in the United States between 2010–2020 by years after initial approval. Orphan drugs are defined as those receiving an Orphan Drug Designation in any indication in the US (n=166); Non-Orphan drugs are defined as those that did not receive an Orphan Drug Designation in any indication in the US (n=286). Revenue may include ex-US revenue. Analysis excludes drugs for which revenue data was not available. Figure courtesy of the author.

Several structural factors likely underpin this durability. Rare disease markets by nature have limited patient populations, which reduces the economic incentive for large numbers of competitors to enter. Treatment decisions are concentrated among a relatively small group of specialists, creating high switching barriers once patients are stabilized on therapy. In many cases, clinical differentiation is meaningful and easily communicated within expert communities. Strong patient advocacy and caregiver networks further reinforce treatment continuity. These communities play an active role in disease awareness, diagnosis, and long-term management, often supporting sustained use of established therapies. In addition, rare disease treatments frequently involve complex manufacturing, administration, or monitoring requirements that deter rapid generic or biosimilar entry.

Importantly, the advantages of orphan drugs extend beyond regulatory incentives. While orphan exclusivity and expedited pathways contribute to attractiveness, the primary drivers of durability are market structure and patient behavior. These characteristics insulate originator therapies from rapid displacement and support flatter post-peak decline curves. As a result, orphan drugs tend to behave less like volatile growth options and more like stabilizing revenue contributors. In portfolios dominated by a small number of blockbusters, the inclusion of orphan assets can meaningfully reduce overall revenue volatility.

Rethinking value: stability versus peak sales

Traditional biopharma valuation frameworks often prioritize peak annual sales as the primary measure of success. While peak revenue remains an important metric, it provides an incomplete view of value creation. It does not capture volatility, erosion risk, or the timing and predictability of cash flows across an asset’s lifecycle.

Orphan drugs challenge this paradigm. Rather than generating short-lived revenue spikes followed by steep decline, many orphan assets deliver steady cash flows over extended periods. From a portfolio perspective, this stability can be as valuable as scale, particularly in an environment characterized by policy uncertainty, pricing pressure, and competitive intensity.

Risk-adjusted lifetime value offers a more informative lens. When evaluated on this basis, orphan drugs often outperform non-orphan assets by smoothing portfolio revenue and reducing earnings volatility. This predictability supports more disciplined capital allocation, improves forecasting confidence, and enhances investor perception of portfolio resilience.

In an era where access to capital is increasingly tied to perceived risk, the value of stability should not be underestimated.

What are the strategic implications of rare disease for portfolio leaders?

Recognizing the advantages of orphan drugs does not imply that they are universally simple or low risk. Instead, successful orphan strategies require intentional portfolio design and dedicated operating capabilities.

One challenge is limited commercial synergy. Rare disease markets are often fragmented, with small prescriber bases and highly tailored engagement models. Traditional large-scale sales force leverage is limited, and per-patient servicing costs can be higher due to the need for education, support services, and coordination of care.

Operational and execution complexity represents another risk. Commercial success frequently depends on advanced patient identification strategies, diagnostic infrastructure, engagement with centers of excellence, and long-term patient support programs. Companies without prior rare disease experience may struggle to translate strong clinical assets into durable commercial performance.

Portfolio fragmentation can also increase management overhead. A collection of orphan assets spanning multiple indications may strain medical, regulatory, and patient services teams if not governed by a coherent rare disease operating model. Without clear prioritization and centralized capabilities, diversification can undermine focus and efficiency.

Despite these challenges, well-executed orphan strategies offer meaningful advantages. When integrated deliberately, orphan drugs function as structural hedges within portfolios. They reduce reliance on reactive, high-cost M&A and mitigate the financial impact of patent cliffs. The key is to view orphan assets not as opportunistic additions, but as foundational components of long-term portfolio architecture.

The biopharmaceutical industry is undergoing a structural transition. Revenue concentration, accelerating patent cliffs, and intensified competition have exposed the limitations of the traditional blockbuster model. In this environment, orphan drugs are no longer peripheral bets or niche opportunities. They are increasingly essential tools for managing portfolio risk and sustaining long-term value.

By delivering durable revenue, reduced volatility, and predictable lifecycle performance, orphan assets complement blockbuster franchises and stabilize portfolios across market cycles. As portfolio construction emerges as the primary determinant of success, companies that integrate orphan drugs strategically will be better positioned to navigate uncertainty, allocate capital efficiently, and create enduring value.

: Analysis was conducted using data from Global Data (December 2025), following the subsequent methodology. Total revenue for the year 2024 is calculated as the sum of global sales for all drugs manufactured and marketed by each pharmaceutical manufacturer parent company and includes all revenue from subsidiary companies, expressed in millions US dollars. For the five pharmaceutical manufacturers with the highest total revenue figures in 2024, total revenue is sub-divided between revenue from blockbuster drugs, those with at least US$1 billion in revenue in 2024, and non-blockbuster drugs, defined as those with less than $1 billion in revenue in 2024.

: Analysis was conducted using data from Global Data (December 2025), following the subsequent methodologies. Figure 2: Quantity of total patent expiries in the US reflects the total volume of assets with US patents that will expire in the given year resulting in a loss of exclusivity for their primary indication. Volume is calculated by calendar year, from 2025-2037. Figure 3: Products features are those with US patent expiries in the given year from 2025–2037 and over $3.5 billion in gross revenue in 2024 (revenue figures may include ex-US revenue). Products featured include the primary product logo, the logo for the primary manufacturer responsible for commercialization in the US, the 2024 revenue figure, and the primary therapeutic area for the product.

: Analysis was conducted using data from Global Data (December 2025), following the subsequent methodology. Median revenue per year post-launch is calculated as the median revenue per year following their initial launch for all assets initially approved in the US between 2010–2020. Sample includes revenue data from 2010–2024 and may include ex-US revenue. Sample is sub-divided between drugs that received an orphan drug designation in the US in any indication (“Orphan”) and drugs that did not receive an orphan drug designation in the US in any indication (“Non-orphan”).

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Scannell, J. W.; Blanckley, A.; Boldon, H.; and Warrington, B. Diagnosing the Decline in Pharmaceutical R&D Efficiency. 

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Edwards, N.; Spruce, J.; Bianco, M.; Kim, K.; Law, P.; and Khan, N. 

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FDA. Scientific Considerations in Demonstrating Biosimilarity to a Reference Product: Updated Recommendations for Assessing the Need for Comparative Efficacy Studies Center for Drug Evaluation and Research, Office of New Drugs, Office of Therapeutic Biologics and Biosimilars. 21 

 § 10.115(g)(5); FDA-2011-D-0605. (2025).

Edwards, N.; Bianco, M.; Spruce, J.; Khan, N. 

The Orphan Advantage: How Rare Disease Assets Are Redefining Biopharma Deal Strategy

, specializes in business development, new product planning, and early brand strategy. He helps companies lay the foundation for successful launches through data-backed strategies spanning pricing and contracting and indication assessment to portfolio strategy. Nathan integrates both commercial and access insights into early asset development to maximize market opportunity.

 is a global, full-service boutique consulting firm that partners with biopharma companies to navigate complexity and support growth. We combine deep therapeutic expertise, real-world insights, and end-to-end commercialization capabilities with a people-first approach. Our mission is simple: deliver strategies that create measurable results and lasting impact for our clients, our people, and the communities we serve.

Articles

In part three of this four-part series regarding rare diseases, the authors examine how revenue concentration and accelerating patent cliffs undermine the traditional blockbuster model, whereas orphan drugs offer a structurally different strategy for stabilizing biopharma portfolios through more durable, predictable, and risk-adjusted long-term value creation.