Objective: In 1983 the Orphan Drug Act was approved to provide incentives for development of new drug treatments for rare diseases. The objectives of this study are to compare the characteristics of the orphan drugs (OD) with the non-Orphan drugs approved by the FDA in the period 1983-2007. Methods: All new chemical entities (NCE) approved by the FDA in the study period were included in the study. Data derived from the FDA's Orange Book (OB). Differences between group means were assessed using the t-test. Differences in proportions were evaluated using chi-square and Fisher's exact test. Results: Between January 4, 1983 and October 3, 2007 the FDA granted 1749 OD designations and 315 OD approvals for marketing. NCEs accounted for 17.7% of OD designations and 53.7% of OD approvals. The FDA approved 635 NCEs in the study period, out of which 17.5% had OD status at the first NDA approval. Sponsors of ODs were more likely (p<0.001) to be US companies as compared to non-US companies (64.0% vs. 54.4%) and to have one NCE approval as compared to multiple NCE during the study period (43.2% vs.17.6%). ODs were less likely (p<0.001) to have at least one patent listed in the OB in comparison with non-ODs (62.2% vs. 82.8%). ODs had less patents listed in the OB than non-ODs (mean 1.7 vs. 2.3) (p<0.005). Exclusivity period was longer than the patent period for 41.4% of the ODs and 21.4% of the non-ODs that had patents listed in the OB (p<0.001). ODs had less generic competition than non-ODs (18.0% vs. 29.6%) (p<0.05). Conclusion: US companies and companies with only one NCE approval were more likely to use the Orphan drug regulatory system. Orphan drugs have less number of patents, more exclusivity protection and less generic competition than non-orphan drugs.