**Core Concept**
Orphan drugs are a class of medications designed to treat rare or orphan diseases, which affect a small percentage of the population. These conditions are often life-threatening or severely debilitating, and the development of orphan drugs is crucial for improving patient outcomes.

**Why the Correct Answer is Right**
Orphan drugs are designated by regulatory agencies, such as the FDA in the US, to incentivize pharmaceutical companies to develop treatments for these rare conditions. The Orphan Drug Act of 1983 in the US provides tax credits, grants, and market exclusivity for up to seven years to encourage the development of orphan drugs. This designation allows manufacturers to recoup their investment costs and can help make these treatments more affordable for patients.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because orphan drugs are not solely defined by their price or cost-effectiveness. While they may be more expensive than other treatments, their designation is based on the rarity of the condition they treat.
**Option B:** This option is incorrect because orphan drugs are not necessarily experimental or unproven treatments. They may have undergone rigorous clinical trials and have established efficacy and safety profiles.
**Option C:** This option is incorrect because orphan drugs are not limited to treatments for rare genetic disorders. They can also be used to treat rare infectious diseases, cancer, and other conditions.

**Clinical Pearl / High-Yield Fact**
It's essential to remember that the designation of an orphan drug does not necessarily imply that it is more expensive or less effective than other treatments. The primary goal of orphan drug designation is to incentivize the development of treatments for rare conditions, which may have limited commercial appeal.

**Correct Answer: D. Orphan drugs are designated by regulatory agencies to incentivize the development of treatments for rare conditions.**