In 1988, the Orphan Drug Act was barely five years old and still coming of age in the industry. Created in 1983, the act provided financial incentives (including research grants, tax credits for development costs, and seven years of market exclusivity) to sponsors of products intended for conditions affecting fewer than 200,000 persons. The point was to make the development of such drugs more attractive, offsetting development costs and limited market potential.

By 1988, some manufacturers had already discovered the potential competitive advantage of orphan drug status. Perhaps the best example is that of Amgen’s erythropoietin, which started out as an orphan drug, but even in 1988 was well on its way to becoming a blockbuster through the approval of new indications.