**Core Concept**
Orphan drugs are a class of medications designed to treat rare or orphan diseases, which are defined as conditions affecting fewer than 200,000 people in the United States. These diseases often have limited market size, making it challenging for pharmaceutical companies to invest in research and development.

**Why the Correct Answer is Right**
Orphan drugs are developed to address unmet medical needs in underserved populations. The Orphan Drug Act of 1983 in the United States provides incentives for companies to develop and market these medications, including tax credits, grants, and market exclusivity. The development of orphan drugs often involves collaboration between academia, industry, and government, and may involve novel therapeutic approaches or repurposing existing medications for a new indication.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because orphan drugs are not limited to rare genetic disorders. While some rare genetic conditions may be treated by orphan drugs, these medications can also address rare acquired or infectious diseases.
**Option B:** This option is incorrect because orphan drugs are not necessarily more expensive than other medications. While the development costs of orphan drugs may be higher due to the small market size, the prices of these medications are often comparable to those of other treatments.
**Option C:** This option is incorrect because orphan drugs are not solely the domain of small biotechnology companies. Large pharmaceutical companies also develop and market orphan drugs, often in partnership with smaller companies or academia.

**Clinical Pearl / High-Yield Fact**
A key challenge in developing orphan drugs is the need for flexible regulatory frameworks that balance the need for safety and efficacy with the limited availability of data from rare disease populations. Regulatory agencies such as the FDA have implemented various strategies to facilitate the development and approval of orphan drugs.

**Correct Answer: D.**