An amazing number of comments, some however needlessly incivil.
A very interesting comment suggests that, if seven years of exclusivity are enough to induce substantial expenditures on developing orphan drugs despite their small market, we should reexamine the need for the 20-year patent term. An even more radical possibility would be to jettison patent protection in favor of some variant of the Orphan Drug approach, a form of intellectual property protection that is much simpler than patent protection. But I recognize the force of the criticisms of the Act in the excellent comment by "SteveSC."
Another comment asks whether the alternative uses to which resoiurces would be put if there were no Orphan Drug Act would contribute as much as or more than to social welfare; the commenter says that "it does not seem that a drug like Viagra is nearly as useful as say, one treating cancer." This proposition has great intuitive appeal, but it is (speaking of useful) useful to distinguish between the utilitarian and economic perspectives. Economists generally measure the welfare effects of a new product by willingness to pay rather than by subjective satisfaction (pleasure, happiness, freedom from pain, etc.). From that standpoint, a drug like Viagra that has a huge potential market might be more "valuable" than a drug that treated a cancer from which only a tiny number of people suffer. I am not suggesting that the economic criterion of welfare should be the only one employed by government. But I insist on the relevance of the economic perspective--and here I quote the commenter who said "It is in fact appropriate to ask--ad absurdum--whether an Act resulting in pharmaceutical companies spending billions to find a cure for a disease whose only victim were Bill Gates, instead of spending them on research that might benefit thousands of even millions of Americans, would in fact have negative benefits [for] the rest of us." No offense intended to Mr. Gates; it is nevertheless a worthwhile question.