According to an article from FinancialBuzz, the pharmaceutical company Avadel announced that its product FT 218 has been granted orphan drug status by the Food and Drug Administration (FDA) as a treatment for narcolepsy.
Orphan drug status is an ordinance meant to incentivize the development of treatments for rare diseases. A drug can only receive orphan drug status if it is targeting a disease that affects less than 200,000 people per year. When a medication receives orphan drug status, the company is granted exclusive rights to continue the development of the treatment. The company is also granted a period of market exclusivity for seven years as a way to ensure that the company makes some return for their investment in development of the drug. The status also provides some financial incentives by cutting costs and waiving some fees that the company would have to pay. The status is normally only reserved for medications that are deemed to have the potential to treat a disease that has limited or no current options for treatment, or a medication that could majorly improve treatment.