On Thursday, Marathon Pharmaceutical obtained federal approval for deflazacort (brand name Emflaza), a steroid to treat Duchenne Muscular Dystrophy. According to CureDuchenne, a nonprofit focused on funding research, “Duchenne is a fatal genetic disease that causes muscle degeneration. Patients are usually diagnosed by age 5, most lose their ability to walk in the teens and most don’t survive their mid-20s.”
Following its announcement of an $89,000 list price for the drug, Marathon became the media’s new poster boy for Big Bad Pharma. I can almost hear Mylan—the maker of the EpiPen—let out a sigh of relief.
Every major media outlet—and then some—spun the same tale: Marathon took an old drug, repurposed it, and hiked the price á la the evil Martin Shkreli of Turing Pharmaceutical. Forbes’ article by Matthew Herper was representative of the collective coverage: “Of course it has happened again. A drug company has brought a drug [to market] that has been available as a generic elsewhere in the world for decades at a shockingly inflated price. The company, Marathon Pharmaceuticals, is charging a list price of $89,000—a 6,000% price increase.”
It didn’t take politicians long to get wind of the scandal. By Monday, Sen. Bernie Sanders and Rep. Elijah Cummings had written to Marathon, demanding answers and calling the price “outrageous” and “unconscionable.” Shortly on the heels of that breaking news, Marathon announced it was pausing its launch of deflazacort. According to CNBC, “Marathon CEO Jeffrey Aronin also said the company ‘will meet with caregivers and explain our commercialization plans, review their concerns, discuss all options, and move forward with commercialization based on an agreed plan of action.’”
The Big Pharma Stereotype Doesn’t Fit Here
Marathon’s response was reasonable under the circumstances: the press and the politicians had already branded Marathon with the Scarlet Shkreli, facts be damned. Yet Marathon does not fit the go-to anti-pharma narrative. Deflazacort had never been approved in the United States before, period. The Food and Drug Administration had never approved any steroid to treat Duchenne Muscular Dystrophy. So says the FDA. So much for the 6,000 percent price increase.
But the press knew that. Every hit piece sprinkled details throughout that told a very different story. For instance, even though available in Europe and elsewhere around the world for 20 years, deflazacort was not previously available in the United States because of regulatory costs. Until Marathon, “no company thought it would be profitable enough to warrant the effort of seeking FDA approval.”
Yet Marathon thought there was a market for deflazacort because, even though American patients had access to other steroids, such as the FDA-approved prednisone, deflazacort reportedly had fewer side effects. So Marathon embarked on the timely and costly process of obtaining FDA approval.
Specifically, Marathon conducted a pivotal Phase Three study to demonstrate that deflazacort was both effective in treating those suffering from Duchenne Muscular Dystrophy and safe for patients. That process began in 2014 and required Marathon to run multiple clinical trials, including testing for interactions between deflazacort and Rifampin and Clarithromycin, and the potential effects of food on dosing. Then Marathon ran studies to assess the safety of deflazacort on patients suffering from renal impairment and hepatic impairment.
In total, “to get the FDA approval, Marathon conducted 17 clinical and pre-clinical trials, and had to go back and find the data from studies conducted by the drug’s original manufacturer. The FDA is making Marathon conduct post-approval studies, including one in children younger than five.”
Almost All Patients Can No Longer Access This Drug
Notwithstanding these costly endeavors, critics panned the $89,000 price tag because: “The price is absurd, and the price increase short-circuits the fairness circuitry built into the human brain.”
Wrong organ. This heart-felt reaction is visceral, not logical. It’s understandable given the suffering of those afflicted by this horrible genetic disease and their parents, some of whom had purchased deflazacort from another country at an annual out-of-pocket cost of $1,000 to $2,000. These parents worried that their insurance companies will refuse to cover the medication. It proves yet again, as I’ve said here and here, that the fight isn’t between Big Pharma and the sick patient—it’s between Big Pharma and Big Insurance.
So Marathon suspended its launch to work with these parents and patients to allay their concerns. But “only 7% to 9% of the patients who could benefit from Emflaza were able to get access to it by importing the drug from other countries.” That left 83 to 91 percent of patients without access to deflazacort. Broader access in the United States required Marathon (or another pharmaceutical company) to undertake the costly FDA approval process. The launch delay could have affected those patients, but in announcing the “pause,” Marathon also promised to provide patients open-access to the drug, free of charge.
What price Marathon sets upon its relaunch remains to be seen. But even with the original $89,000 list price, as Marathon explained, its business will not be profitable for several years. Under the Orphan Drug Act, Marathon only has seven years in which to exclusively market deflazacort. Just to break into the black, then, Marathon would need to set its list price at about $38,000.
But Marathon wants to do more. According to its website: Marathon seeks to develop “new treatments for rare neurological and movement disorders.” Marathon is correct when it writes that “[m]any pharmaceutical companies are unwilling or unable to invest in treatments for diseases that affect fewer than 200,000 patients.” That very reality prompted Congress to pass the Orphan Drug Act—to encourage investment in finding cures for rare diseases. But now that Marathon has done exactly what Congress wanted, it is painted as a greedy villain.
This All Sidelines a More Important Story
Had the press not been so dead-set on casting Marathon in the Big Bad Pharmaceutical role, it would have discovered a more important story: how the Twentieth-First Century Cures Act promises to reduce the high cost of drugs.
Deflazacort provides a perfect case study. Even though deflazacort has long been used in other countries for a variety of conditions, it could not be sold in the United States without FDA approval. Under current FDA regulations, Marathon had to conduct expensive clinical trials. However, the recently passed Cures Act now provides the FDA with more flexibility for reviewing drug applications, including the ability to consider real-world experiences.
Under the Cures Act, the FDA now has the authority to consider both the standard-of-care and the safety of drugs gleaned from international experience. Thus, the FDA could now consider deflazacort’s long-term safety record. The FDA could also take into account that, internationally, doctors prescribed deflazacort to patients suffering from Duchenne, and that in the United States, “steroids are [also] considered the standard of care for Duchenne patients,” with physicians prescribing, off-label, the FDA-approved steroid prednisone. In appropriate circumstances—of which deflazacort seems one—the FDA could approve a drug or expand a current drug’s label without requiring the pharmaceutical company to run time-consuming and expensive clinical trials.
Reducing the regulatory burden will, in turn, lower drug prices, both by decreasing R&D expenses for pharmaceutical companies and by increasing competition. In fact, Marathon now faces the risk that the FDA will expand the label for prednisone to treat Duchenne patients, without requiring clinical trials. If so, there will be two FDA-approved drugs within the same class to treat the same condition. Insurance companies could then exclude deflazacort (or prednisone) from their drug formulary, absent substantial price reductions.
These facts provide a real-world rebuttal to the critics who, a mere two months ago, condemned the Cures Act’s “real-world evidence” provisions as a case of Congress handing drug companies a dangerous victory: “The 21st Century Cures Act allows ‘the potential use of real world evidence’ to support the approval of a novel indication for an approved drug and ‘to help to support or satisfy postapproval study requirements.’ That sounds rather reasonable: who could possibly oppose the use of ‘real world evidence’? The problem, however, is that ‘real world evidence’ actually means here ‘really bad evidence.’ The law defines ‘real world evidence’ as ‘data… derived from sources other than randomized clinical trials,’ which is to say uncontrolled observational data.”
This Feeding Frenzy Is Bad for Sick People
At the time, I called out the critics of real-world data, as well the politicians who claimed the pharmaceutical industry had hijacked the Cures Act. Deflazacort perfectly illustrates my point.
The promise the Cures Act holds for addressing the high price of prescription drugs should have been the real story coming out of the FDA’s approval of deflazacort and Marathon’s pricing decision. But instead critics mired in an anti-pharma mindset missed the bigger scoop in their rush to push their well-worn narrative. Front-and-center in the entire outrage-peddling endeavor was Sanders—one of only five senators who voted against the Cures Act!
On one point, though, the critics were right—Marathon was playing with fire: “The fact that Marathon’s drug is priced much higher here than in other countries makes it an easy target, either for Twitter attacks or policy interventions.”
With the press hell-bent on inciting, instead of informing, Marathon was an easy target. Once the flames picked-up a head wind over the Capitol, Marathon had little choice but to pull back and dig a fire line. I just hope that in the current crucify-them climate other pharmaceutical companies don’t likewise decide to play it safe and forgo investing in research for rare diseases. For those suffering from such conditions, that would be even more heartbreaking.
Disclosures: As the mother of a young son with cystic fibrosis, Cleveland has a vested interest in the continued development of drugs to treat and eventually cure this disease. Her family’s 401(k) and retirement savings include diverse holdings, including mutual funds in both the health care and pharmaceutical sectors; it also includes immaterial investments in several individual biotech stocks.