Two Congressmen are launching a probe into Marathon Pharmaceuticals LLC’s decision to price the drug deflazacort at $89,000 for a year’s supply, which is 70 times the price charged outside the U.S. The company recently received exclusive permission from the Food and Drug Administration to sell the drug in the United States, under the brand name Emflaza. Until then, patients could import the drug from the U.K. for between $1,200 and $1,600 annually.
Deflazacort is used to treat patients with Duchenne muscular dystrophy, a rare disease that affects 12,000 young Americans. Due to the small patient population, the drug is classified as an “orphan drug,” meaning that it treats a disease that affects fewer than 200,000 individuals. The FDA developed the program, which provides seven-year exclusivity for the sale of the drug, in order to incentivize companies to produce these medications for what would otherwise be unprofitable markets if there was heavy competition. Companies receiving orphan drug designation for a product receive other incentives as well, including tax credits for a portion of the clinical development costs.
The criticisms of Sen. Bernie Sanders (I-VT) and Rep. Elijah Cummings (D-MD) surround Marathon’s ability to qualify as an orphan drug, alleging that the company is abusing the program to charge high prices since it did not develop the drug itself. The drug itself was developed in the late 1980s by Marion Merrell Dow (now a part of Sanofi). Marathon licensed a Phase III clinical trial of the drug, published in August 2016 in the medical journal Neurology. Phase III trials typically cost between $11.5 million and $52.9 million dollars, according to a study published in the medical journal Clinical Trials. The two Congressmen have requested information from Marathon on how much it spent on bringing the drug to market, its revenue and profit projections, and any communications the company had with health insurers on covering the drug.