The Orphan Drug Act provides incentives through which mechanisms?

• A. Economic and tax incentives
• B. Expedited approval for all drugs
• C. Price controls
• D. Advertising allowances

Answer: (A)

The main idea is to use economic and tax incentives to spur the development of drugs for rare diseases. The Orphan Drug Act creates benefits that reduce the cost and risk of bringing an orphan drug to market. A key feature is seven-year market exclusivity after approval for the orphan indication, which protects the sponsor from competition for that specific use. In addition, sponsors can receive tax credits for qualifying clinical testing and may obtain FDA assistance and even grants or fee waivers to help fund development. These incentives are designed to make projects with small patient populations financially viable and attractive to companies. It isn’t about speeding up approval for all drugs, setting price controls, or providing advertising allowances, which aren’t provisions of the act.