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Underdiagnosis Is the Real Competitor: Why Rare Disease Launches Fail Before They Start

rare-disease launch-strategy patient-identification oncology

The Playbook That Assumes the Market Exists

The standard pharmaceutical launch playbook is built for competitive markets. Define the target population. Assess the incumbent’s strengths and weaknesses. Position your product on the differentiation axis that matters most — efficacy, safety, convenience, cost. Deploy the field force. Capture share.

This playbook works when the market is established. When 60-70% of eligible patients are diagnosed, treated, and visible to the healthcare system, the launch is a competitive exercise. You are fighting for a share of a known denominator.

In rare disease, this assumption breaks down — and the consequences of not recognizing it are severe. I have seen launch teams allocate 80% of their commercial budget to competitive positioning against an incumbent drug, while the actual barrier to their revenue forecast was that two-thirds of the eligible patient population had never been diagnosed.

The most important strategic insight I have arrived at from building launch readiness models is this: in rare disease, the biggest competitor is often not the incumbent drug — it is underdiagnosis.

The Diagnostic Odyssey in Numbers

The National Organization for Rare Disorders (NORD) publishes data that should reframe how every rare disease launch team thinks about their market. The median time from symptom onset to accurate diagnosis for a rare disease patient exceeds 5 years. For many conditions, it exceeds 7. During that journey, the average rare disease patient sees 7.3 physicians and receives 2-3 misdiagnoses before arriving at the correct one (NORD, Rare Disease Patient Journey Report, 2023).

This is not an edge case. This is the central experience of rare disease patients. And every year that a patient spends in the diagnostic odyssey is a year they are not part of your addressable market — regardless of what the epidemiological prevalence estimate says.

The distinction between epidemiological prevalence and diagnosed prevalence is the single most important number in a rare disease launch model, and it is the number most frequently glossed over in investor presentations and brand plans. When an analyst cites “30,000 eligible patients in the U.S.” based on published incidence and prevalence data, the implicit assumption is that those 30,000 patients are known to the healthcare system and accessible to a sales force. In practice, the diagnosed and treated population may be a fraction of that number.

The MDS Example: 500,000 to 20,000

Myelodysplastic syndromes (MDS) provide a particularly instructive case study because the diagnostic funnel is quantifiable.

Approximately 500,000 patients in the United States present with unexplained anemia in the demographic most associated with MDS — adults over 60 with macrocytic or normocytic anemia of unclear etiology. Of these, the actual MDS-diagnosed population is approximately 20,000 per year. The gap between “patients who could have MDS” and “patients confirmed to have MDS” is enormous — and the bottleneck is a bone marrow biopsy, an invasive procedure that many community hematologists defer in favor of watchful waiting or empiric ESA therapy (Sekeres et al., Blood Advances, 2021).

Within the diagnosed MDS population, the subset eligible for targeted therapy is smaller still. Lower-risk MDS with ring sideroblasts — the SF3B1-mutant population most responsive to erythroid maturation agents like Reblozyl — represents a fraction of total MDS diagnoses. And Reblozyl’s class penetration, even after two years on the market with Bristol-Myers Squibb’s full hematology franchise behind it, remains below 30% of eligible RS-positive patients.

Read those numbers carefully. The identification gap — from 500,000 potential patients to 20,000 diagnoses to fewer than 6,000 treated with targeted therapy — dwarfs the competitive gap between any two drugs in the class. A second-entrant oral MDS agent fighting Reblozyl for market share is fighting over a small slice of a much larger problem.

If that second entrant allocated 10% of its launch budget to reducing the identification gap — to getting more of those 500,000 anemia patients correctly diagnosed and referred — the impact on total addressable market would likely exceed anything achievable through competitive share capture alone.

Why the Incumbent Will Not Fix This

Here is the paradox that makes diagnostic inertia so persistent: the incumbent has limited incentive to invest in disease awareness.

Reblozyl already captures the majority of diagnosed, eligible MDS patients who receive targeted therapy. BMS’s commercial infrastructure — built on years of Revlimid relationships and a dedicated hematology field force — is optimized for the known, diagnosed population. Every dollar BMS invests in MDS disease awareness benefits the entire class, including the second entrant. If BMS spends $10 million on a bone marrow biopsy education campaign that increases MDS diagnosis rates by 15%, the second entrant — who contributed nothing to the investment — captures their proportional share of those newly diagnosed patients.

This is a classic free-rider problem. The company best positioned to expand the diagnosed population has the weakest economic incentive to do so, because the benefits accrue to the entire competitive class. And the second entrant, who would benefit most from an expanded market, typically lacks the commercial infrastructure and brand presence to lead a disease education effort at launch.

The result is underinvestment in diagnosis by everyone. The incumbent optimizes for share of the existing market. The challenger optimizes for competitive positioning. And the patients who have not been diagnosed remain invisible to both.

Reframing the Launch Model

The strategic response is to reframe the launch around market creation rather than market capture. This is not an either/or — competitive positioning still matters. But the budget allocation should reflect the actual revenue opportunity, and in a low-penetration rare disease, the majority of the revenue opportunity is in the undiagnosed population.

Here is what that looks like in practice:

Patient Identification Programs

Claims-based patient identification is the most scalable approach to narrowing the diagnostic gap. Using administrative claims data (ICD-10 codes, lab values, procedure history), machine learning algorithms can identify patients with a high probability of having an undiagnosed rare disease and flag them for physician review.

In MDS, this means building algorithms that identify patients with persistent unexplained anemia (ICD-10 D64.9), elevated MCV, low reticulocyte count, and no documented bone marrow biopsy — and routing those patient profiles to the treating hematologist or primary care physician with a clinical decision-support prompt. Several rare disease companies have deployed similar approaches: Alexion’s patient identification program for paroxysmal nocturnal hemoglobinuria (PNH) used claims-based algorithms to identify potential patients and achieved a 40% increase in diagnostic testing rates within 18 months of deployment (Alexion, Investor Day Presentation, 2022).

Diagnostic Pathway Optimization

Beyond claims-based identification, investing in the diagnostic pathway itself can reduce the bottleneck. In MDS, this means:

Each of these investments benefits the entire class. But the company that makes them builds relationships with the diagnosing physicians — relationships that create a prescriber affinity that persists when the treatment decision is made.

The Disease Education Paradox — and Its Resolution

The free-rider problem is real but not insurmountable. The resolution lies in recognizing that disease education is not purely altruistic — it is a prescriber relationship strategy.

When a second-entrant biotech invests in MDS awareness and diagnostic support, the individual prescribers who benefit from that investment develop a relationship with the company. The MSL who helps a community hematologist interpret an NGS panel is building a connection that the BMS field force — focused on Reblozyl messaging for already-diagnosed patients — is not.

In rare disease, where the prescriber base is small and relationship-driven, the company that helps physicians find and diagnose patients creates a level of trust and reciprocity that field force scale cannot replicate. BMS can deploy 200 hematology reps. A pre-commercial biotech with 40-50 reps cannot match that frequency. But the biotech’s MSL who personally supported a diagnosis — who was there when the disease was identified, not just when the prescription was written — holds a qualitatively different position in the prescriber’s consideration set.

This is the structural advantage that market-creation strategy builds: a prescriber relationship moat rooted in diagnostic partnership, not promotional frequency.

Quantifying the Opportunity

The math is worth doing explicitly because it clarifies the strategic priority.

Consider a rare disease with 10,000 epidemiological patients, 3,000 diagnosed patients, and 1,500 treated patients (50% treatment rate among diagnosed). An incumbent controls 70% of the treated market (1,050 patients). A second entrant launches and captures 25% share of new starts, which represents approximately 375 patients in year one.

Now consider the same second entrant investing in patient identification that increases the diagnosed population by 20% — from 3,000 to 3,600. With the same 50% treatment rate and 25% share of new starts, the additional 600 diagnosed patients yield an incremental 150 treated patients — a 40% increase in the entrant’s patient base from the identification investment alone.

In many rare disease scenarios, a 20% improvement in diagnosis rates is achievable with targeted investment in claims-based identification and physician education. The incremental patients from improved diagnosis can rival or exceed the patients captured through competitive positioning.

And critically, these patients are not zero-sum. They do not come from the incumbent’s installed base. They are patients who were not being treated by anyone. There is no competitive counter-detailing response to expanding the diagnosed population. The incumbent cannot defend against patients who did not previously exist in the treatable market.

The Structural Failure of the Standard Launch

When I see a rare disease launch plan that allocates 37% to field force, 18% to digital, 13% to congresses, and 7% to disease awareness, I see a plan optimized for competitive share capture in a market that may not be large enough to support the revenue forecast.

Seven percent of budget allocated to disease awareness — the single intervention most likely to grow the total addressable market — is an allocation that assumes the market exists. In a disease with greater than 50% class penetration, that assumption is reasonable. In a disease with less than 30% class penetration, it is the most consequential strategic error in the launch plan.

The correction is not to eliminate competitive spending. It is to rebalance. In a low-penetration rare disease, something closer to 20-25% of the pre-launch and launch-year budget should be allocated to market-creation activities: patient identification programs, diagnostic pathway partnerships, disease state education for referring physicians, and claims-based targeting infrastructure. The competitive positioning can be sharp and effective with a smaller share of voice, because the prescriber base is small enough that quality of engagement matters more than frequency of contact.

What This Means for Rare Disease Strategy

The companies that will outperform in rare disease launches over the next decade are the ones that recognize a structural truth: the diagnostic odyssey is not a background condition to be acknowledged and moved past in the brand plan. It is the primary commercial challenge to be solved.

Every rare disease has a prevalence estimate. Every rare disease also has a diagnosed prevalence — the number of patients who actually carry the diagnosis in their medical record, who have been referred to the appropriate specialist, who are eligible and known candidates for targeted therapy. The gap between those two numbers is the real market opportunity. And closing that gap requires investments that look different from the standard launch playbook.

Patient identification algorithms. Diagnostic testing partnerships. Referral network development. Community physician education. These are not medical affairs nice-to-haves. They are commercial imperatives. They are the investments that convert an epidemiological prevalence into an addressable market.

The second entrant that builds the diagnosed population builds something the incumbent cannot easily replicate or counter-detail away: a relationship with the physicians who found the patients, a reputation as the company that expanded access to diagnosis, and a growing market that lifts both the entrant and the incumbent — but that the entrant, as the builder, is best positioned to capture.

Underdiagnosis is not a footnote in the rare disease launch plan. It is the plan.

Daniel Tran is a Hematology/Oncology Product Marketing Manager at Pfizer and a UCSD-trained PharmD specializing in launch strategy, competitive intelligence, and market access.