What is an Orphan Drug?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 19 November 2019
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Orphan drugs are medications that are developed to treat a health issue that is relatively rare. Because the potential market for the medicine is low, drug companies do not produce or promote the orphan drug in large quantities. Often, governments offer some sort of incentive to the creator of the medication to manufacture a limited amount for use in treating the rare disease.

In the United States, an orphan drug is a medication that is specifically designed for use in the treatment of a medical condition that impacts less than 200,000 people. In order to encourage drug companies to produce limited lots of these drugs, the U.S. government will provide benefits such as tax breaks or a guarantee of market exclusivity for a certain period of time, often seven years. This approach is thought to not only help ensure that the orphan drug is available when needed, but also to allow a manufacturer to maximize the return on the medicine, since no other drug manufacturer can produce and market the medication during that period.


By encouraging orphan drug development in this manner, governments make it possible for small groups of citizens who are dealing with rare diseases to still have access to medication that will help them manage or cure these relatively obscure conditions. The continuing research during the exclusivity period may also yield additional uses for various orphan drugs. This would expand the potential user base for the medicine and possibly allow it to become profitable enough for the manufacturer to aggressively market the drug as a treatment for several different afflictions rather than one.

The specifics of a government-sponsored orphan drug program will vary from one country to another. Different nations offer different levels of incentives for drug companies to produce small amounts of an orphan drug annually. In some cases, government funding may help support orphan drug research during the exclusivity period. Governments may also adopt an orphan drug law that spells out the legal interpretation of what is considered to be an orphan drug. The legislation may also specify the conditions that must be met in order to receive tax breaks and other incentives, and set the number of years that the original manufacturer will have exclusive rights to the production of the medicine.

In times past, the attempts of manufacturers to distribute information about orphan drugs focused primarily on providing medical professionals with details about the medicines. However, this is changing due to the widespread use of the Internet. Today, medical professionals, as well as non-profit agencies, seek to educate the public on the nature, symptoms, and treatment of rare medical conditions via informational web sites, often using verbiage that is easy for the average person to understand.


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