# Orphan Drug Act 1983

Source: https://onco.cc/terms/orphan-drug-act/  
OnCo record `orphan-drug-act` (Term). Data CC BY-NC 4.0, attribute "Data from OnCo (onco.cc)"; commercial use needs a licence.

## TL;DR

The 1983 US law that pays companies to develop drugs for rare diseases with seven years of market exclusivity, tax credits and fee waivers, which is why so many cancer drugs are first approved for a rare subtype.

## Summary

United States, federal statute. The Orphan Drug Act was signed on 4 January 1983 (Public Law 97-414) and amended in 1984 to define a rare disease as one affecting fewer than 200,000 people in the United States. It adds sections 525 to 528 to the Federal Food, Drug, and Cosmetic Act. Primary text: the FDA's excerpt page.

What it changed: a drug approved for an orphan indication gets seven years during which the FDA will not approve the same drug for the same indication, a tax credit for clinical testing costs (50 percent until the 2017 tax reform halved it to 25 percent), waiver of the user fee, and eligibility for grants. Fewer than ten orphan products had reached the market in the decade before the Act; hundreds have since, and oncology accounts for the largest share because cancers split by site, histology and biomarker each fall under the 200,000 threshold. Imatinib, rituximab, bortezomib and most CAR-T products began as orphans.

The arguments: the Act is widely credited as the most successful drug-development incentive ever written, and the European Union copied it in 2000. Critics point to 'salami slicing' of common cancers into orphan subsets, to blockbuster revenues earned under an incentive meant for neglected diseases, and to orphan exclusivity blocking competitors. The Inflation Reduction Act's exclusion of single-orphan drugs from Medicare negotiation, broadened in 2025, is the latest chapter in that argument.

## Fields

- Kind: Term
- Last checked: 2026-09-17
- Also known as: Orphan Drug Act of 1983; ODA 1983; orphan drug exclusivity; seven-year orphan exclusivity; orphan drug tax credit
- Tags: law; us

## Sources

- Wikipedia: https://en.wikipedia.org/wiki/Orphan_Drug_Act_of_1983
- Wikipedia: https://en.wikipedia.org/wiki/Orphan_Drug_Act_of_1983
- FDA: Orphan Drug Act, relevant excerpts: https://www.fda.gov/industry/designating-orphan-product-drugs-and-biological-products/orphan-drug-act-relevant-excerpts
- FDA: orphan drug designation programme: https://www.fda.gov/industry/medical-products-rare-diseases-and-conditions/designating-orphan-product-drugs-and-biological-products

## Connected records

- terms: [Hatch-Waxman Act 1984](https://onco.cc/terms/hatch-waxman/), [Inflation Reduction Act 2022: Medicare drug price negotiation](https://onco.cc/terms/inflation-reduction-act/), [Orphan drug](https://onco.cc/terms/orphan-drug/), [Orphan drug designation](https://onco.cc/terms/orphan-designation/), [Paediatric drug laws: BPCA and PREA](https://onco.cc/terms/bpca-prea/), [RACE for Children Act](https://onco.cc/terms/race-for-children-act/), [Rare cancers](https://onco.cc/terms/rare-cancers/), [Regulation (EC) No 141/2000: EU orphan medicines](https://onco.cc/terms/eu-orphan-regulation/), [US regulatory exclusivity periods](https://onco.cc/terms/us-regulatory-exclusivity/)
- institutions: [FDA Oncology Center of Excellence](https://onco.cc/institutions/fda-oce/)
- bottlenecks: [Incentives reward me-too drugs and marginal gains](https://onco.cc/bottlenecks/b-incentive-misalignment/), [Prices and value](https://onco.cc/bottlenecks/b-drug-pricing/), [Rare and paediatric cancers without markets](https://onco.cc/bottlenecks/b-rare-cancers/)

---
JSON: https://onco.cc/api/v1/entities/orphan-drug-act.json