Marathon Pharmaceuticals to Charge $89,000 for Muscular Dystrophy Drug

Marathon Pharmaceuticals LLC says it will charge $89,000 annually in the U.S. for a decades-old steroidal drug that was approved for U.S. sale for the first time on Thursday, a price that is as much as 70 times higher than drug’s price overseas.
The U.S. Food and Drug Administration approved the drug, called deflazacort, on Thursday to treat a rare type of muscular dystrophy that affects some 12,000 boys in the U.S., most of whom die in their 20s and 30s. The drug isn’t a cure, but it has been shown to improve muscle strength compared with a placebo, the FDA said in a statement announcing the approval.
The drug hasn’t been sold in the U.S. previously, mainly because no company thought it would be profitable enough to warrant the effort of seeking FDA approval. But U.S. patients have been importing it from foreign countries since the 1990s after clinical trials showed its potential to reduce inflammation with fewer side effects than another steroid.
The price set by Marathon, based in Northbrook, Ill., is 50 to 70 times what most U.S. patients now pay to buy deflazacort from an online pharmacy in the United Kingdom, according to advocates for patients with Duchenne muscular dystrophy.
Christine McSherry of Pembroke, Mass., pays about $1,600 annually to buy deflazacort from the U.K. pharmacy for her son, Jett, she said.
But the pharmacy recently told customers it would stop shipping the drug to the U.S. after Marathon received FDA approval for its version.
Ms. McSherry, who runs Jett Foundation, a nonprofit aimed at Duchenne, said she is “disappointed that Marathon increased my cost for the drug by more than $87,000 a year.”
Marathon Chief Financial Officer Babar Ghias defended the price in an interview. He said the company will likely receive much less in net revenue than its $89,000 per patient list price, after providing discounts to government insurers and financial assistance to patients who can’t afford the drug.
The company will start selling the medicine under the brand name Emflaza in March, Mr. Ghias said.
Mr. Ghias, a former mergers and acquisitions banker, said the company showed restraint in how it priced the drug. Other new drugs for so-called orphan diseases, which affect fewer than 200,000 people nationally, have carried higher price tags, he said.
“It’s modestly priced for an orphan drug,” Mr. Ghias said.
Pharmaceutical companies are under mounting scrutiny for their pricing of drugs, many of which now approach or exceed $100,000 annually per patient. Many companies defend themselves by saying that their prices are needed to justify their large investments in discovering and developing new treatments.
Marathon gained clearance to sell deflazacort after licensing the rights to clinical trial data from the 1990s that hadn’t been fully analyzed. The FDA required the company to complete an analysis of the old trial data and conduct some new studies to gain approval, Mr. Ghias said.
Mr. Ghias declined to say how much Marathon spent to acquire the trial data or conduct original research. He said Marathon doesn’t expect to recoup its investment in the drug for several years. Marathon doesn’t have commitments yet from insurers that they will pay for the drug, Mr. Ghias said.
Pat Furlong, a patient advocate, said she hopes deflazacort will be widely covered by insurers now that it is FDA-approved. But she worries that the drug’s price could continue to keep it out of reach for patients with high-deductible insurance or whose insurance won’t pay for the drug at all, she says.
“I worry about what people have to pay out of pocket,” said Ms. Furlong, president of the nonprofit Parent Project Muscular Dystrophy.