Simon - found this informal definition:
(medicines that relieve the symptoms of rare diseases but that have not
been fully developed by the pharmaceutical industry).
and this one on the Federal Drug Agency's web site http://www.fda.gov/cder/da/da.htm#definitions
Designated orphan drug: A drug for which the sponsor received orphan designation
under the Orphan Drug Act. Such a sponsor is eligible for tax credits and exclusive
marketing rights for the drug.
My understanding is that the govt supports development of drugs that would otherwise not be profitable to the industry.
Mary
