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Marathon Pharma Has a Golden Opportunity to Lead a Revolution on Drug Pricing

2017-02-14 | Robert Goldberg


When Marathon Pharmaceuticals announced the list price for deflazacort – a steroid that helps kids with Duchenne Muscular Dystrophy maintain muscle strength – I am betting it didn’t expect to be headline news for anything other than taking a generic medicine in short supply and making it widely available in an FDA approved form.  

After all, it explained that the $89000 list price would wind up being sold to PBMs for $54000 and that after additional discounts and cost sharing most patients would pay about $20 a month for the product.  And it explained that as a company that was making the drug available for free under an expanded access program during its development, that was not going to be profitable for year and was already repurposing other generic drugs for rare conditions, the money had to come from somewhere. 

Didn’t matter.   Marathon got hammered.  And worse, if the news accounts are accurate, the list price surprised and concerned the patient groups that it had been supporting and working with to identify medicines to bring to market.  

But Marathon has wisely decided to re-launch deflazacort with a different approach to pricing. 
Since the company has been receiving criticism for free, perhaps they would not mind being told – gratis – that it has a great opportunity to lead a drug pricing revolution.  Scrapping the initial pricing model was the first step.  Here are the rest:

1.    Pledge to make the drug available for $20 a month forever and with no price increases.
2.    Make the same pledge for any new medicines it develops
3.    Use the rebates, discounts and givebacks that cut the price to $54000 and use it to reduce consumer cost at point of sale.
4.    Use the rebates, discounts, etc., to give insurers and consumers a money back guarantee if the drug does not work.
5.    Partner with specialty pharmacies that get paid for dispensing the drug and helping patients stick to regimens, report outcomes, etc., vs paying off Express Scripts, CVS and the bunch.
6.    Partner with health plans and provider networks to come up achievable outcomes from using the drug.  Studies suggest that maintaining muscle strength in kids with DMD reduces other health care costs by about $40000 a year.   It gives the kids, parents and caregivers more independence.   Then figure out how factor in the cost of the drug.  Marathon could even finance part of the cost with the freed up rebates.
7.    Use the money raised from the sale of its FDA priority review voucher (a ticket that gets you to market faster) to invest in its other pipeline products.

In doing so, Marathon could break the chokehold rebates are having on access and how they skew drug pricing.  It could focus on making sure its medicine was used in ways that generate the most value to its customers.   And best of all, it could shut up Bernie Sanders (Love the Bern but less is more).  I’d pay real money for that!