An orphan drug is a drug or biologic that demonstrates promise for the diagnosis and/or treatment of rare diseases and conditions that affect fewer than 200,000 people. The U.S. Orphan Drug Act (1983) encourages development of these therapeutics by tax breaks and a seven-year monopoly on drug sales. These incentives promote the development and manufacturing of such therapeutics, which otherwise might not be profitable because of the small potential market. In the United States, a drug or biologic is granted Orphan Drug Designation by the Office of Orphan Products Development (OOPD), a special office in the U.S. Food and Drug Administration.
In the United States, the Humanitarian Use Device (HUD) Designation Program is a similar program for medical devices.
U.S. Food and Drug Administration (FDA): Developing Products for Rare Diseases & Conditions
NCATS Toolkit for Patient-Focused Therapy Development: Preparation for Clinical Trials Special FDA Designations
FDA: Designating an Orphan Product: Drugs and Biological Products