The Orphan Drug Act of 1983 is a law passed in the United States to facilitate development of orphan drugs—drugs for rare diseases such as Huntington's disease, myoclonus, ALS, Tourette syndrome or muscular dystrophy which affect small numbers of individuals residing in the United States.

[1] Orphan drug designation does not indicate that the therapeutic is either safe and effective or legal to manufacture and market in the United States.

Instead, the designation means only that the sponsor qualifies for certain benefits from the federal government, such as market exclusivity and reduced taxes.

Kefauver-Harris required that all drugs approved for sale be proven safe and effective via rigorous scientific studies.

[6] Orphan drugs generally follow the same regulatory development path as any other pharmaceutical product, in which testing focuses on pharmacokinetics and pharmacodynamics, dosing, stability, safety and efficacy.

For example, orphan drug regulations generally acknowledge the fact that it may not be possible to test 1,000 patients in a phase III clinical trial, as fewer than that number may be affected by the disease in question.

The intervention by government on behalf of orphan drug development can take a variety of forms: The plight of patients with rare diseases became an important political issue in the late 1970s and early 1980s.

Under the ODA drugs, vaccines, and diagnostic agents would qualify for orphan status if they were intended to treat a disease affecting less than 200,000 American citizens.

This incentive creates an attractive monopolistic market for companies interested in developing a product for any given rare disease.