What innovation? PhRMA slams Marathon after $89K pricing scandal

Industry trade group PhRMA is considering kicking out Marathon Pharmaceuticals, which has drawn fire from Congress for slapping a top-dollar price on an old drug.

Marathon Pharmaceuticals hasn’t made many friends in the last week. The company’s old-steroid-turned-pricey-branded-drug Emflaza touched off an immediate brouhaha when Marathon announced its $89,000 price.

Shaken by the backlash, the company “paused” its Emflaza launch. Then, headlines rightly pointed out that its CEO, Jeff Aronin, had a history of questionable price hikes.

Now, the trade group PhRMA has joined the company’s critics. It’s awkward, because the association had welcomed Marathon as a member and put Aronin on its board. But, as many pharma watchers noted, it's a necessary move to draw a line between PhRMA’s “innovative” members and its not-so-innovative ones.

About the pricing flap: “We are pleased Marathon decided to pause the launch of their medicine to solicit additional input from patients and other stakeholders,” the group wrote in a Wednesday statement. “Their recent actions are not consistent with the mission of our organization.”

In fact, PhRMA suggested that it might kick Marathon out altogether. “[T]he leadership of the PhRMA Board of Directors has begun a comprehensive review of our membership criteria to ensure we are focused on representing research-based biopharmaceutical companies who take significant risks to bring new treatments and cures to patients,” the statement went on to say.

Presumably, if Marathon finds itself out of the PhRMA circle, Aronin would also lose his board seat; the group didn’t say whether the CEO would stay on the board in the meantime.

And no wonder PhRMA felt the need to issue that statement. Enormous price hikes on aged drugs were, after all, the spark that lit the fiery drug-pricing controversy. And that very public black eye has since prompted President Donald Trump to vow to bring down drug prices and fueled a resurgence of pricing measures in Congress.

When the debate first gathered steam, Big Pharma chiefs immediately tried to distance themselves from the likes of Turing Pharmaceuticals, whose then-CEO, Martin Shkreli almost gleefully hiked the price on an old drug, Daraprim, by 5,000%. PhRMA did the same. And since then, the organization has continued scrambling to rehab the industry’s image by touting scientific advances and explaining high prices on new meds by pointing to pharma innovation. Its new ad-and-marketing campaign, “Go Boldly,” is expected to cost "tens of millions" a year for several years.

Marathon’s new brand required no such innovation. It’s a newly approved version of the old steroid deflazacort, aimed at Duchenne muscular dystrophy patients who’d been able to buy it for a small fraction of the cost before the FDA stepped in. The costs of Marathon’s development program—estimated at anywhere from less than $10 million to $75 million—fall far short of the billion-dollar price tag on biopharma’s latest and greatest new treatments, and fall far short of justifying that $89,000 sticker.

Meanwhile, lawmakers have already jumped into the Marathon situation, launching an investigation and demanding documents that detail its development program for Emflaza. Sen. Bernie Sanders, I-Vt., and Rep. Elijah Cummings, D-Md., who’ve been in the thick of the drug-pricing debate from the start, also called on Marathon to “significantly” lower the new brand’s price.

“Marathon did not develop deflazacort,” Sanders and Cummings wrote in their letter. “Rather Marathon acquired the rights to historical clinical trial data from the 1990s and completed some additional analyses to gain approval from the Food and Drug Administration to sell the drug in the United States."

The next front might well be the FDA and its program that incentivizes testing of long-available meds that have never undergone agency review. Several drugmakers have managed to use that program to win exclusivity for and launch drugs at prices that dwarf their cost before the FDA got involved.