What Does An Orphan Drug Designation Mean?

In the vast landscape of pharmaceuticals, certain medical conditions are so rare that they often get overlooked by drug developers due to the limited patient population. Recognizing the unique challenges faced by individuals with rare diseases, governments around the world have implemented special designations and incentives to encourage the development of drugs for these conditions. One such designation is “Orphan Drug Designation,” a status granted to drugs aimed at treating rare diseases.

In this article, we will explore what orphan drug designation means, the benefits it offers, and how it plays a crucial role in advancing treatments for rare diseases.

What is Orphan Drug Designation?

An orphan drug is a pharmaceutical agent developed to treat a rare medical condition, often referred to as an orphan disease. According to the Orphan Drug Act of 1983 in the United States, a rare disease is defined as one that affects fewer than 200,000 people. In the European Union, a disease is considered rare if it affects fewer than 5 in 10,000 people. Orphan drug designation is a regulatory status granted to drugs and biologics intended for the treatment, diagnosis, or prevention of rare diseases.

In the United States, the Orphan Drug Act of 1983 has played a significant role in encouraging the development and availability of drugs for rare diseases. The Orphan Drug Act was designed to address this gap and stimulate the development of treatments for conditions that might otherwise be overlooked.

Key provisions of the Orphan Drug Act include:

1.        Orphan Drug Designation: Under the Orphan Drug Act, drug manufacturers can apply for orphan drug designation for their products if they are intended to treat a rare disease or condition. The designation is granted by the U.S. Food and Drug Administration (FDA). To qualify for orphan drug designation, the disease or condition for which the drug is intended must affect fewer than 200,000 people in the United States or, if the prevalence is higher, there must be no expectation that the costs of developing and making the drug will be recovered through sales.

2.        Market Exclusivity: A key incentive provided by the Orphan Drug Act is the grant of market exclusivity to the designated orphan drug. This exclusivity typically lasts for seven years following FDA approval. During this period, the FDA generally cannot approve another drug with the same active ingredient for the same orphan disease, except under certain circumstances.

3.        Tax Credits: The Orphan Drug Act provides tax incentives to encourage the development of orphan drugs. Developers of designated orphan drugs may be eligible for tax credits on qualified clinical testing expenses.

4.        Research Grants: The Act authorizes the FDA to award grants to support clinical testing of drugs for rare diseases. These grants are intended to assist in defraying the costs of qualified testing expenses.

5.        Reduced Regulatory Fees: Orphan drug developers may benefit from reduced fees for certain regulatory activities, including application fees for marketing approval.

The Orphan Drug Act has been widely regarded as successful in fostering the development of therapies for rare diseases. Before its enactment, there were few incentives for pharmaceutical companies to invest in the research and development of drugs for diseases with small patient populations. The Act has led to a substantial increase in the number of orphan drugs brought to market, providing hope and improved treatment options for individuals with rare conditions.

While the Orphan Drug Act has been effective, challenges still exist, such as the high costs associated with orphan drugs and concerns about patient access and affordability. Nevertheless, the Act remains a cornerstone of orphan drug development and has inspired similar legislative efforts in other countries to address the unique challenges of rare diseases on a global scale.

The Process of Obtaining Orphan Drug Designation

To obtain orphan drug designation, pharmaceutical companies must submit a request to the relevant regulatory authorities, such as the U.S. Food and Drug Administration (FDA) in the United States or the European Medicines Agency (EMA) in the European Union. The application should include scientific evidence supporting the drug’s potential efficacy and safety for the specified rare disease. If granted, orphan drug designation provides certain benefits and incentives to the drug developer.

Benefits of Orphan Drug Designation:

1.        Market Exclusivity: One of the primary benefits of orphan drug designation is the market exclusivity granted to the drug developer. In the U.S., this exclusivity lasts for seven years, during which competing drugs are generally not allowed to enter the market for the same indication.

2.        Financial Incentives: To encourage investment in the development of orphan drugs, regulatory agencies offer various financial incentives. These may include tax credits for research and development costs, reduced regulatory fees, and access to grant programs.

3.        Protocol Assistance and Regulatory Support: Drug developers with orphan drug designation often receive enhanced support and guidance from regulatory agencies. This can include assistance in designing clinical trials and navigating regulatory processes, streamlining the path to drug approval.

4.        Waiver of User Fees: Orphan drug designation may result in the waiver or significant reduction of certain regulatory fees associated with drug development, further incentivizing companies to focus on rare diseases.

List Of Some Important Orphan Drugs and Their Indication

Orphan DrugIndication(s)
AcalabrutinibMantle cell lymphoma
Alglucosidase alfaPompe disease
DaratumumabMultiple myeloma
EculizumabParoxysmal nocturnal hemoglobinuria (PNH)
ElapraseHunter syndrome
IbrutinibMantle cell lymphoma, Chronic lymphocytic leukemia
Lumacaftor/ivacaftorCystic fibrosis
NusinersenSpinal muscular atrophy (SMA)
PalivizumabRespiratory syncytial virus (RSV) prevention
PatisiranHereditary transthyretin-mediated (hATTR) amyloidosis
RituximabNon-Hodgkin lymphoma, Rheumatoid arthritis
SolirisParoxysmal nocturnal hemoglobinuria (PNH), Atypical hemolytic uremic syndrome (aHUS)
TisagenlecleucelAcute lymphoblastic leukemia (ALL), Diffuse large B-cell lymphoma
VelcadeMultiple myeloma, Mantle cell lymphoma

You can search for Orphan Drug Designations and Approvals on the FDA Orphan Drug Listing Portal

Role in Advancing Treatments for Rare Diseases

Orphan drug designation plays a pivotal role in addressing the unmet medical needs of individuals with rare diseases. Without these incentives, the financial risks associated with developing drugs for such small patient populations might deter pharmaceutical companies. The designation fosters an environment that encourages innovation and investment in research for diseases that might otherwise be neglected.

Challenges and Future Perspectives

While orphan drug designation has proven beneficial in many cases, challenges still exist. The high cost of orphan drugs, even with the incentives provided, remains a concern. Striking a balance between encouraging drug development and ensuring affordability for patients is an ongoing challenge.

In the future, continued collaboration between regulatory agencies, pharmaceutical companies, and patient advocacy groups will be crucial. With advancements in genomic medicine and personalized therapies, the landscape of orphan drug development is likely to evolve, providing even more targeted and effective treatments for rare diseases.


Orphan drug designation is a vital tool in promoting the development of treatments for rare diseases, offering hope to individuals facing limited options. By providing financial incentives, market exclusivity, and regulatory support, this designation encourages pharmaceutical companies to invest in the research and development of therapies for conditions that would otherwise be overlooked. As science and technology continue to progress, the impact of orphan drug designation on the lives of those with rare diseases is likely to grow, ushering in a new era of innovation and compassion in the pharmaceutical industry.


Joan David-Leonhard

Joan David Leonhard is a recent Pharm.D graduate with a strong passion for the pharmaceutical industry and a particular interest in pharmaceutical media and communication. Her brief internship experience includes roles in pharmacy where she built strong patient-pharmacist relationships and a pharmaceutical media internship where she actively contributed to drug information articles, blog posts, social media engagement, and various media projects.
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