To stimulate the development of therapies for patients affected by orphan diseases with unmet medical needs, regulatory authorities worldwide introduced the designation of orphan drug.

The Orphan Drug Act of 1983 introduces several incentives for drug companies developing drugs to prevent, diagnose or treat so-called orphan diseases that affect less than 200,000 individuals in the United States. These incentives consist of seven years of market exclusivity from the grant date of marketing approval, assistance in clinical research study designs, tax credits for the costs of clinical research, FDA fee waiver and eligibility for FDA grants.

The European Parliament adopted the Orphan Regulation on 16 December 1999 to lay down the EU procedure for designation of orphan medicines and stimulate the development of orphan medicinal products.

An orphan disease is defined as a disease or condition affecting no more than five in 10,000 European citizens with no satisfactory method of diagnosis, prevention or treatment.

The adopted incentives consist of ten years of market exclusivity from the grant date of marketing approval in the EU, protocol assistance and scientific advice, fee reductions on EMA procedural activities and eligibility for EU grants.