Orphan medicinal products (OMPs) are targeted at the diagnosis, prevention or treatment of rare diseases and have a special status in European law. This status brings incentives for pharmaceutical companies to invest in OMP development. The goal of the legislation is to encourage the development of more treatments for life-threatening rare disorders, but increased availability of OMPs raises important issues surrounding the public funding of very expensive treatments by national health services. In this article we review OMPs and the incentives for their development and discuss the challenges presented by funding these treatments.