In the context of drug regulations, what does the term "orphan drug" refer to?

The term "orphan drug" specifically refers to a medication that is developed for the treatment of rare diseases or conditions. These are diseases that affect a small percentage of the population, often making it financially challenging for companies to invest in research and development due to the limited patient base. To incentivize the development of these drugs, regulatory agencies like the FDA have established programs that provide benefits such as tax credits for clinical testing, exemption from certain fees, and an extended period of market exclusivity.

This definition aligns accurately with option B, which emphasizes the drug's purpose of addressing rare diseases. In contrast, the other choices do not pertain to orphan drugs directly: drugs used exclusively in clinical trials do not have a specific association with rare diseases; a drug without an established market can be more general in description; and a generic version of an approved drug relates to pharmaceutical equivalency rather than the targeted development for rare conditions.