An orphan drug is a pharmaceutical agent developed to treat medical conditions which, because they are so rare, would not be profitable to produce without government assistance. The conditions are referred to as orphan diseases.
The assignment of orphan status to a disease and to drugs developed to treat it is a matter of public policy in many countries and has yielded medical breakthroughs that might not otherwise have been achieved, due to the economics of drug research and development.In the U.S. and the EU, it is easier to gain marketing approval for an orphan drug. There may be other financial incentives, such as an extended period of exclusivity, during which the producer has sole rights to market the drug. All are intended to encourage development of drugs which would otherwise lack sufficient profit motive to attract corporate research budgets and personnel.