What benefit does the Orphan Drug Law provide to companies?

The Orphan Drug Law primarily provides significant incentives for pharmaceutical companies to develop drugs for rare diseases, which are often overlooked due to the limited market potential. By offering tax breaks, the legislation helps alleviate some of the financial burdens associated with the costly drug development process. This means that companies can receive a reduction in their overall tax liability for conducting research and development activities related to orphan drugs. Consequently, this encourages investment in treatments for conditions that otherwise might not be researched due to the small patient populations involved.

The design of the law is rooted in the recognition that addressing rare diseases can be economically challenging; hence the incentives aim to stimulate more active engagement from the pharmaceutical industry in creating solutions for these conditions. The other options do not accurately reflect the intent or benefits outlined by the Orphan Drug Law.