In what is sure to be misinterpreted as the horrors of the evil free market, a prescription drug has increased in price in the US more than 7,000 fold. The problem here is that the price increase was solely a function of a government-granted monopoly on the drug, which has been on the international market for years.
In a Thursday press release, the Food and Drug Administration (FDA) granted approval for a drug by Marathon Pharmaceuticals, a US company focused solely on the development of new treatments for rare diseases. They may now begin selling the corticosteroid drug Deflazacort, under the brand name Emflaza.
Thanks to the FDA, Marathon now has a monopoly on the drug and, without competition, they are now able to sell this beneficial treatment for Duchenne muscular dystrophy for $89,000 a year — a sharp increase from the international market price of $1,200 a year.
Duchenne muscular dystrophy (DMD) is a rare genetic disease that causes heart and respiratory conditions, usually in younger men. As DMD progresses, patients lose muscle strength and usually end up confined to a wheelchair by the time they reach their early teens.
According to the FDA, patients with DMD typically do not live past their 20s or 30s.
“This is the first treatment approved for a wide range of patients with Duchenne muscular dystrophy,” Billy Dunn, director of the Division of Neurology Products in the FDA’s Center for Drug Evaluation and Research, said in the press release. “We hope that this treatment option will benefit many patients with DMD.”
However, thanks to the FDA, it will only be beneficial to those who can afford the insane price tag of $89,000.
Fret not, however, as Babar Ghias, Marathon’s Chief Financial Officer, says that drug is still in the bottom 10 percentile of rare disease drug prices. Ghias also says that after rebates and discounts, the price will drop to an affordable $54,000, and with insurance and financial programs most patients will pay “zero to low out-of-pocket expense,” according to the Washington Post.
Marathon, in their press release, says the stark increase in price is due to significant investments the company made in research and development to bring the drug through the approval process.
The company claims they extensively researched the drug and they cite a 196-person, 52-week study trial as evidence. However, that study was completed in 1995. And, the study only cites Marathon’s contribution as funding for editorial assistance.
“It seems like it’s yet another example of gaming the system,” Aaron Kesselheim, an associate professor of medicine at Harvard Medical School, told the Post.
“Instead of making the price at a level that is reasonable for patients, they make it a very high price and offer this pathway that patients may not qualify for, they may not know about, there may be limitations on it. So it’s a marketing move and not really a public health solution,” he said.
If anyone knows about government aiding the pharmaceutical industry in creating and maintaining their monopoly on drugs — many of which they never had a hand in creating — it is Harvard’s Aaron Kesselheim.
As the Free Thought Project reported last year, Kesselheim was the co-author of paradigm-shattering research on drug prices, which led to the Journal of the American Medical Association officially recognizing why drug prices skyrocket in America. Big pharma is granted a monopoly by the state which effectively eliminates their competition and allows them to charge any price they want — so they do.
The paper, published on August 23, The High Cost of Prescription Drugs in the United States: Origins and Prospects for Reform, set out to “review the origins and effects of high drug prices in the US market and to consider policy options that could contain the cost of prescription drugs.”
What the paper’s authors, Harvard Medical School doctors Aaron Kesselheim and Jerry Avorn, and jurist Ameet Sarpatwari, found and subsequently admitted, shatters the very assertion that government regulation in the market is needed to keep medical care costs low. In fact, their findings were quite to the contrary.
According to the paper:
“The most important factor that allows manufacturers to set high drug prices is market exclusivity, protected by monopoly rights awarded upon Food and Drug Administration approval and by patents.”
It seems Marathon also knows this and has, like so many companies before them, chosen to game the system.