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This Pharma Company Is Selling a Decades-old Drug to Treat Muscular Dystrophy for $89,000

February 10, 2017, 8:35 PM UTC

Young Americans living with a devastating muscle disease in the U.S. face an approximately $88,000 price hike for a year’s worth of treatment that’s been around for decades.

Illinois-based Marathon Pharmaceuticals will market deflazacort under the brand name Emflaza for a topline price of $89,000, 70 times higher than its price overseas, according to the Wall Street Journal. The drug is a common steroid that can now be used to treat Duchenne muscular dystrophy (DMD), a rare disorder that eats away at muscles and leaves many of its predominantly male victims dead by their late-20s. To compare, patients can snag the treatment for less than $1 through online pharmacies.

How was the company able to get away with such an outrageous list price in America? Simply put, it’s because the drug has never been approved in the U.S. despite widespread availability to treat other inflammatory conditions like arthritis in dozens of other nations. Since Marathon won an approval to treat a condition that afflicts fewer than 200,000 Americans per year and has a dearth of treatment options (rather than trying to become an also-ran in the saturated steroid therapy field), it has carte blanche over the drug’s pricing.

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Marathon argues that the $89,000 list price doesn’t reflect reality since patients will pay far less out of pocket once rebates and insurance kick in. But that’s a shared sentiment among drug makers who have lifted old treatments’ prices to extraordinary degrees. It’s also one of Martin Shkreli’s main defenses for similar actions on niche products that have yet to win U.S. approval.

In many ways, Marathon is taking a page from Shkreli’s playbook. By bringing a drug that’s been well-established as safe in other markets to the U.S. for the first time in order to treat a rare disease, the company doesn’t just control its pricing destiny — it will also receive a coveted “priority review voucher” which it can hawk to another firm for tens (or even hundreds) of millions of dollars. If not, the company can use it to expedite a future drug approval in order to gain a first-to-market advantage.

In fact, one of Marathon’s clinical trials that the FDA used as part of its decision-making process was conducted more than 20 years ago, saving the firm plenty of study costs.

Duchenne drugs have fostered recent controversy in the U.S. Last year, the FDA approved a pioneering Duchenne treatment from Sarepta Therapeutics (SRPT) over the protests of its own scientific advisers who said it lacked proven efficacy. Unlike Sarepta, Marathon’s product doesn’t actually address the protein deficiency at the heart of the disease, but rather has shown promise in improving muscle strength.

While Marathon asserts that its list price is reasonable for treating such a devastating condition, it’s unclear whether or not insurance companies will be eager to cover the drug for Duchenne patients.