Marathon Pharmaceuticals had a nice few moments to relish the FDA approval of its new Duchenne muscular dystrophy (DMD) therapy on Thursday. Then the chaos erupted.
The problem for the industry, patients, politicians and more is the $89,000 price tag the company has slapped on a decades-old drug, available overseas for around $0.60 per dose.
Within four days, Marathon CEO and Chairman Jeff Aronin had become the new face of unethical price gouging, in the footsteps of his apparent prodigy Martin Shkreli. (Marathon gets a personal nod on Shkreli’s ‘everyone else is doing it’ Pharma Skeletons website; “Bro. These guys invented price increases. I literally learned it from them.”)
After much outcry from the media, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings, (D-Md.) joined the Fray on Monday, sending a harshly worded letter to Marathon.
“Marathon’s apparent abuse of government-granted exclusivity periods and incentives to sell what should be a widely available drug for $89,000 a year is unconscionable,” Sanders and Cummings wrote.
It is outrageous that @MarathonPharma plans to charge $89,000/year in the US. for a drug that costs $1,000/year in Canada and the U.K.
— Bernie Sanders (@SenSanders) February 13, 2017
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Later that day, Marathon’s Twitter account directed followers to an open letter on the website Cure Duchenne. Citing its commitment to patients, Aronin wrote that the commercial launch of Emflaza had been put on hold as the company seeks to get the patient groups back on board.
“We are pausing our commercialization efforts in order to meet with Duchenne community leaders and explain our commercialization plans, review their concerns, discuss all options, and move forward with commercialization based on the resulting plan of action,” the letter stated.
Deflazacort (brand name Emflaza) is a corticosteroid that is widely available overseas at generic prices. Around 7-9 percent of U.S. DMD patients were reportedly using the drug, importing it from Canada or the U.K. for between $1,000-$2,000 per year.
After its approval last week, Marathon announced a list price of $89,000. As justification, the company cited the work it had done fulfilling FDA requirements for a new drug approval. After rebates and discounts, Marathon CFO Babar Ghias told the Washington Post that the net price would be $54,000 a year.
To be fair, Marathon is gaming the system, not patients. In a webinar on Friday, Aronin comforted caregivers, letting them know that the out-of-pocket expense for them would be “zero to low cost.”
The company also has a well-subscribed “expanded access program,” designed for patients not enrolled in clinical trials. This program will continue to deliver the drug until further notice, Aronin said.
The letter also addressed patients importing the drug, stating that the company would not interfere with their ability to access the drug independently.
Marathon has had deep support from the patient advocacy groups and the FDA. It was granted orphan drug designation and gifted a priority review voucher from the agency, which can be sold for hundreds of millions of dollars.
After a serious sticker shock, the company is working hard to regain the community’s trust.
“Most importantly of all, I want to reinforce that every patient who needs this drug will have access to it, and that price should not be a barrier. Put simply, we expect patients will pay a standard co-pay of typically $20 or less per prescription… Our goal is that this will cost patients significantly less than they pay today if they were among the few who were importing it,” Aronin wrote in the letter.
This ethical contradiction gets to the heart of why drug prices are so high. Is the enormous price tag somehow O.K. because it’s going to land on insurers? Nothing in this world is free. America’s healthcare system will eventually pay the price.
Photo: IvelinRadkov, Getty Images
