What does the term “orphan drug” refer to?

The term "orphan drug" specifically refers to a medication that is developed to treat a rare medical condition, often affecting a small number of patients. In many regions, legislation exists to incentivize the development of these therapies because the limited market size makes it challenging for pharmaceutical companies to justify the investment required for research and development.

Orphan drug designations typically come with certain benefits, such as tax credits for clinical trial costs, user fee waivers, and market exclusivity upon approval, which help stimulate interest in addressing these underserved medical needs.

The other options do not accurately define what an orphan drug is. A drug banned in most countries does not qualify as being developed for a specific condition. A drug that fails to receive approval is simply an unsuccessful candidate and does not have the designation of "orphan." Lastly, a substance exclusively for research purposes may not have any established therapeutic use, which is contrary to the intent behind orphan drug classification aimed at providing treatment options for patients with rare diseases.