Drug development since the 1980’s has been largely driven by VC-funded biotechs developing and then licensing drugs to established pharmaceutical companies for distribution; this model was and still is based on expensive high-risk capital provided by pension funds, life insurers and others. While successful in terms of providing innovation, the model has led to a rapid increase in prices in the US, with launch prices doubling every four years since the early 2000’s. As a consequence, price levels in the US are now three times higher than in Japan.

This model is reaching its limits, in particular for the 9,500 or so ultrarare diseases with an incidence of less than 300 patients in the US, as the high cost of capital now requires price tags of several millions of US$ per patient for investors to continue to provide funding. Consequently, innovation in the field of science and technology must be complemented by new models of organising and financing innovation. Novel non-profit business models for ultrarare disease therapeutics are beginning to emerge in the US, Europe and elsewhere, but so far not in Japan, where the “drug loss” has become a significant political problem.

The Japan Foundation for Rare Disease Research (JFRDR) is being set up as a non-profit to tackle current and future drug loss. It aims to make use of low-cost capital in the form of government-backed grants and thus provide drugs which would otherwise not be available to Japanese patients at a cost that ensures the Japanese Social Security systems remains financially sustainable.

JFRDR aims to be a key change agent in the Japanese biopharma ecosystem, by aiming to vitalise and professionalise Japanese patient organisations, educating the public as to the realities of living with rare diseases and contributing through the projects it supports to building critical translational and CMC infrastructure that can also be leveraged by commercial biopharma. In addition to working for Japanese patients, JFRDR strives to become a key player in the emerging global collaboration between similar non-profit ventures along the R&D value chain; the ultimate goal will be not only to develop drugs for ultrarare diseases but to make them available to patients all over the world, wherever they may live.

The organisation has been incorporated as of late December 2025 and has selected a CEO to build a small team and commence operations once the seed funding provided by Recordati SpA has been complemented by a substantive government-backed grant.