Orphan Drug Act 1983

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.