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But those antidepressants, which raise levels of the neurotransmitter serotonin, are known to blunt libido. Addyi blocks certain cellular receptors from responding to serotonin.

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"This is the biggest breakthrough in women's sexual health since the advent of 'the Pill'" for contraception, The National Consumers League said in a statement. "It validates (and) legitimizes female sexuality as an important component of health."

But Public Citizen, a consumer watchdog group that testified against the drug earlier this year, predicted that Addyi will be pulled from the market within a few years because of "serious dangers to women, with little benefit" to them. "Unfortunately, we haven't heard the last of this drug."

The FDA had twice rejected the Raleigh, North Carolina-based firm's drug. But the latest decision comes after an advisory panel concluded in June it should be approved with strict measures in place to ensure patients are fully aware of the risks.

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Women who took Addyi in a clinical study had an increase of about one sexually satisfying event per month compared with those taking a placebo.

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The chief executive of Sprout, Cindy Whitehead, co-founded the company with her husband Robert Whitehead in 2011 after selling another small drugmaker they had founded called Slate Pharmaceuticals which had received repeated warnings from the FDA about its marketing tactics.