Politicians once again are concerned that a drug company that plans to sell an old medicine at a very high price is taking advantage of the system.
On Monday, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) sent a letter to the chief executive of Marathon Pharmaceuticals, arguing that the Illinois company is “abusing” government policies that encourage the development of treatments for extremely rare diseases, called orphan diseases.
“We urge you to significantly lower your price for this drug before it goes on the market next month,” they wrote. “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.”
Last week, Marathon received Food and Drug Administration approval for deflazacort, a steroid that has long been available outside the United States, to treat a fatal muscle-deteriorating disease called Duchenne muscular dystrophy. The planned list price for deflazacort is $89,000 a year, with rebates that would bring the net price to $54,000. For years, patients have been able to import the drug from other countries for about $1,200 a year — so even with the rebates and discounts, the new price would be a 4,400% increase.
In response to concerns about pricing, Marathon Chief Executive Jeffrey Aronin announced that the company would delay its launch.
“We have not sold any new product, and we will pause that process,” Aronin wrote in a statement posted by the advocacy group CureDuchenne.
Patients will continue to have access to imported drug, according to the statement, and can still apply to an expanded access program offered by Marathon to get the drug free. Aronin said the company would meet with caregivers and “move forward with commercialization based on an agreed plan of action.”
Rare diseases were once thought of as unprofitable niche medicines, but in 1983, the government introduced incentives — including a seven-year monopoly — for treatments for orphan diseases that afflict fewer than 200,000 Americans. That led to a business model that has made orphan drugs a potentially lucrative business opportunity.
About 15,000 U.S. patients, mostly boys, suffer from Duchenne. The progressive disease first robs children of their ability to walk and kills them in their 20s and 30s.
In an interview last week, Marathon’s chief financial officer, Babar Ghias, said patients would pay nothing or very small co-pay amounts due to insurance and financial assistance offered by the company. He also said the company had intentionally priced the drug on the low end of therapies for such rare diseases.
“That argument is not a defense of Marathon’s actions, but rather an indictment of a system that allows drug companies to engage in such opportunistic pricing behavior,” the politicians wrote.
The politicians also pointed out that the company has received a priority review voucher that could be used to speed up the development of its next drug — or be sold to another company for hundreds of millions of dollars.
They further expressed their concern that the drug, a steroid that can be used for other conditions, will be used for diseases it isn’t approved for as a means of increasing its sales. Sanders and Cummings sent Marathon a list of questions about the cost of developing the drug and its cost to patients as part of an investigation.
PhRMA, the trade association that represents the pharmaceutical industry, has distanced itself from other companies that have fallen into Congress’ crosshairs. But Marathon is a member of PhRMA, unlike other companies that have stirred controversy for price hikes, including Turing Pharmaceuticals, Valeant Pharmaceuticals International and Mylan.
Johnson writes for the Washington Post.
The Associated Press contributed to this report.
5 p.m.: This post was updated with comments from Marathon.