What pricing advantage does the Orphan Drug Act provide to pharmaceutical companies developing medications for rare diseases?

The pharmaceutical industry employs various pricing strategies, especially for rare disease medications. The Orphan Drug Act has significantly influenced how certain medications are priced and brought to market. Test your knowledge about this important intersection of medicine, policy, and pricing strategy that affects millions of patients with rare conditions.

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7 years of market exclusivity, allowing companies to set premium prices without direct competition
Mandatory price caps set at 50% above production costs to ensure affordability while maintaining profitability
A government subsidy that covers 40% of the retail price, offsetting costs for both manufacturers and patients
Tax-exempt status for all revenue generated from orphan drugs for the first decade after FDA approval