The UK Medicines and Healthcare products Regulatory Agency (MHRA) has announced its intention to introduce sweeping reforms for accelerating rare disease therapy development and approval, with the aim to position the UK as a global leader in the field. The new framework will put in place flexible licensing for rare disease therapies with adaptive trial design and a new “investigational marketing authorization.” It will also ensure a patient-centered approach with an emphasis on transparency, flexible benefit-risk thresholds, and use of real-world evidence.
The framework will be published for consultation in the first half of 2026 with the objective of establishing a “refined and implementable” model by later that year.
We set out below a summary of the proposal, comment on what it may mean for M&A deals in the sector, and note parallel proposals underway in the United States.
Background and Rationale for Reform
On 2 November 2025, the MHRA published a Policy Paper outlining its intent to make major changes to the regulatory landscape for rare disease therapies in the UK. With approximately 3.5 million individuals in the UK affected by rare diseases, but fewer than 5% having an approved treatment, the agency has recognized the need for an efficient patient-centric regulatory approach.
The MHRA’s new rulebook aims to “make it quicker and easier to get these therapies tested, manufactured and approved in the UK.” The agency’s goal is to tackle unique barriers such as (very) small patient numbers and difficulties with evidence generation while maintaining robust safety standards. The reforms are designed to support the ambitions of the government’s life sciences strategy and the National Health Service’s (NHS’s) long-term plans (as discussed in our previous LawFlash).
Proposed Framework and Regulatory Pathways
The new framework centers around three main pillars:
- Prior knowledge and evidence generation: The UK currently accepts evidence to support license applications from a range of sources. While these sources are useful for standard products, they are critical for rare disease therapies where patient numbers make evidence generation difficult. The MHRA is therefore developing guidance on how a broader range of sources can be used to generate evidence for regulatory decision-making. This would involve real-world evidence (RWE) and innovative methodologies, such as in-silico trials, artificial intelligence, and machine learning models, as well as relying on prior knowledge about products and diseases.
- Innovative licensing models: Central to the reform is the development of a framework that will allow “an early, single approval [to] be issued for both a clinical trial application and marketing authorisation based on compelling but limited evidence.” This approach would streamline the current standard process, which requires separate—and sequential—approvals for clinical trials and marketing authorizations. The aim of the new framework is to create a tailored, flexible licensing pathway that utilizes investigative approvals, modular data sharing and analysis, and strong patient engagement. The “investigational marketing authorization” could then lead to a conditional or full marketing authorization as more data is generated.
- Post-market monitoring: Post-market and long-term safety data will be an important part of the framework in balancing the more limited data at the time of approval. This will be overseen with national and international registries and analysis of RWE.
The National Institute for health and Care Excellence (NICE) and NHS will also be a part of the new framework as adoption of any new therapies within the NHS will be important. A longer-term goal is to align post-marketing data collection requirements for the NICE health technology assessment process to ensure a streamlined reimbursement process.
Eligibility Criteria and Scope
The MHRA has noted that defining the scope and eligibility for the new pathway will be critical and may not be straightforward. The agency is creating a decision tree to determine eligibility with the aim of ensuring transparency for both industry and patients.
The framework will start with prevalence criteria of ≤5 in 10,000, but to ensure flexibility will also consider commercial viability, international standards alignment, and other factors. In particular, the framework will include flexibility to accommodate both individualized and small population therapies.
Patient Involvement
The patient’s voice will be central to the new framework, with input incorporated into regulatory development sessions and licensing deliberations. The MHRA has noted that guidance for making the regulatory process clear, simple, more transparent and flexible is required to better meet the needs of the rare disease community. In particular, patient experience will help inform how the MHRA approaches benefit-risk for rare diseases and how it communicates about uncertainty.
A new Rare Disease Consortium will play a key role in developing and implementing the framework, composed of representatives from the MHRA, NICE, Department of Health and Social Care, NHS, patient advocacy groups, academia, and industry. This broad coalition is expected to drive the reforms forward and ensure that diverse perspectives are considered.
What This Could Mean for M&A Deals in the Rare Disease Sector
The proposed changes to the UK’s rare disease regulatory framework could also have notable consequences for mergers and acquisitions (M&A) activity in the sector. By enabling faster and more predictable approval processes, the MHRA reforms may increase the attractiveness of UK-based rare disease companies to larger pharmaceutical and biotechnology companies seeking strategic acquisitions.
Companies looking to be acquired should develop a robust regulatory strategy and start the discussions with regulatory agencies early in the drug development process; the MHRA has signaled that it is open to early dialogue with companies and wants to work with them to develop a framework for novel therapies.
Streamlined regulatory pathways and enhanced market access could also drive up valuations and facilitate deal-making as acquirers will likely be more willing to invest in innovative therapies with a more predictable regulatory framework.
Parallel Rare Disease Proposals Considered and Underway in the United States
The US Food and Drug Administration has made announcements with several parallels in recent months and has promised more is to come in this space. Among other projects, FDA’s Center for Drug Evaluation and Research and Center for Biologics Evaluation and Research recently announced a joint Rare Disease Evidence Principles process to facilitate the approval of drugs to treat rare diseases with very small (>1,000 in the United States) patient populations, with significant unmet medical need, and a known (and major) genetic driver of the disease.
Focusing on circumstances in which substantial evidence of effectiveness may be supported by one adequate and well-controlled trial underpinned by confirmatory evidence (a pathway most recently described in this 2023 guidance document), this effort may be focused on ensuring that eligible rare disease development programs can adequately leverage recognized flexibilities within FDA’s approval framework. FDA leadership has also signaled that additional announcements may be expected, including in the truly-ultra-rare arena, signaling that FDA’s longstanding focus on the rare disease space remains ongoing.
While the United Kingdom and United States’ approaches are driven by similar goals and face similar scientific and clinical challenges, the proposed programs will no doubt differ at least to some degree, including as a result of divergent legal structures and standards. This could cause difficulties for companies as development programs may find successes and challenges that differ across jurisdictions.
The MHRA has noted that international collaboration is an important factor, given the small patient numbers impacted, and it is aiming to align regulatory pathways with global regulators. This will hopefully help accelerate product development, with the real measure of success of these many reforms measured by approvals of innovative products meeting previously unaddressed need.