What does the Orphan Drug Act of 1983 provide to manufacturers?

The Orphan Drug Act of 1983 was established to encourage pharmaceutical companies to develop treatments for rare diseases, which are conditions that affect fewer than 200,000 people in the United States. The primary incentive provided to manufacturers under this act includes tax credits for clinical trial costs, grant funding for research, and seven years of exclusive marketing rights upon FDA approval of the drug for an orphan designation. This means that during this period, no similar drug may be marketed for the same indication, providing the manufacturer a significant financial incentive to invest in the development of these otherwise less profitable drugs.

This unique framework helps address the lack of treatment options available for patients with rare diseases by making it economically viable for pharmaceutical companies to invest in their development. In contrast, other options presented do not accurately reflect the primary incentives described in the Orphan Drug Act. Doing so clarifies why the correct answer highlights tax and licensing incentives as key benefits to manufacturers involved in developing orphan drugs.