Do investors value the FDA orphan drug designation?

摘要

BackgroundThe Orphan Drug Act is an important piece of legislation that uses financial incentives to encourage the development of drugs that treat rare diseases. This analysis studies the effects of a portion of the Orphan Drug Act, the orphan drug designation. Specifically, it studies the value that investors place on the orphan drug designation, by investigating how investors react to companies’ announcing that their product has received the designation.