These are drugs that are for preventing, diagnosing or treating a life threatening medical condition that affects fewer that 5 out of every 10,000 people in the European Union. The pharmaceutical company would not normally be able to make much profit from these drugs because so few people would need them. So they get incentives, such as having to pay less in fees to license the drug, a longer time than usual when only they can market the drug (market exclusivity), and extra money for researching and developing it.
A designation that gives pharmaceutical companies additional incentives to develop particular drugs, usually for rare diseases.... more on: Orphan Drugs
Orphan drugs are medicines to treat diseases affecting fewer than 200,000 patients. In the U.S., 10 to 20 million patients suffer from about 5,000 orphan diseases for which there is no effective cure or treatment. The Orphan Drug Act, initially enacted in 1983 and made permanent in 1997, was developed to help these patients. The law provides incentives (a period of market exclusivity and a tax credit for research expenses) to help make it commercially feasible to develop these drugs. In the decade after this law was passed, 99 orphan drugs were approved, compared to 10 in the previous decade.