There was a new pharmaceutical policy enacted in 1983 known as the Orphan Drug Act. It was designed to increase the availability of drugs used to treat rare diseases. In the decade prior to 1983, only ten orphan drugs had been marketed. Since 1983, over 200 orphan drugs have been marketed and over 800 have entered the regulatory pipeline. This paper examines a case of government regulation that industry, patients and politicians view as a resounding success. This policy should serve as a model of how to encourage innovation in other under-served areas.