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In a closely watched battle over regulatory decision-making, a federal appeals court ruled the U.S. Food and Drug Administration wrongly approved a rare disease medicine made by a small, family-run company because another drug maker already held the exclusive right to market a similar treatment.

The lawsuit was filed by Catalyst Pharmaceuticals (CPRX), which accused the agency of violating federal law two years ago when it unexpectedly approved a medicine made by Jacobus Pharmaceuticals for treating children with a rare neuromuscular disorder called Lambert-Eaton myasthenic syndrome, or LEMS. The FDA had previously endorsed a Catalyst drug to treat LEMS, but only for adults.

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