Will a Spanish Drug, Retailing for Under 10 Euros, Get Sold in the US for $89,000 per Year?

Will a Spanish drug, retailing for under 10 euros, get sold in the U.S. for $89,000/year?

On February 9, 2017 Marathon Pharmaceuticals LLC received FDA approval for Emflaza (deflazacort), tablets and oral suspension, to treat patients aged 5 years and older with Duchenne muscular dystrophy (DMD), a rare genetic disorder that causes progressive muscle deterioration and weakness.

Why did this drug approval create headlines?

At a time when pharmaceutical companies face growing pressure to hold down drug prices, Marathon had plans that the drug would carry a list price of $89,000 for a year's supply.

As the drug has been approved outside the U.S. for decades, patients in the U.S. have imported the drug from Canada and the U.K., where it’s available at a price between $1,000 or $2,000 a year.

Oh! Come on. Getting FDA approval is hard, Marathon must have done some serious value addition to improve the science on this decade-old drug?

In a detailed analysis performed, Endpoints News uncovered that, of the two clinical studies done to prove the effectiveness of deflazacort, one study involved 196 DMD patients and indicated that deflazacort could improve the strength of patients with this disease.

In another trial with 29 male patients that lasted 104 weeks, the FDA reported, “deflazacort demonstrated a numerical advantage over placebo on an assessment of average muscle strength.”

The larger of those two studies was published last year although it was “completed in 1995, the data are being published now due to the efforts of the authors and Marathon Pharmaceuticals since the original sponsor of the study gave up the rights to the data and compound.”

While the company maintains that it conducted 17 preclinical and clinical studies to get this drug approved, along with in-licensing two older studies, the pivotal trial was the study completed originally in 1995.

Marathon’s clinical program involved no new registrational studies, the primary driver behind R&D costs.

Endpoints tried to determine the cost of Marathon’s efforts by speaking with industry experts and received estimates that “puts the entire package at $65-75 million.”

After Hillary Clinton’s ‘price-gouging’ tweet, what did the U.S. politicians do this time?

Senator Bernie Sanders and Representative Elijah Cummings, Democrats who have been critical of high drug costs in the past, said that “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 (FDA) to sell the drug in the U.S.”

Sanders and Cummings, wrote to Marathon’s Chief Executive Officer Jeffrey Aronin, calling the price “outrageous” and asking the company to provide documents and information about how much it spent developing the drug and how it set the price.

Cummings also said that he’s scheduled to meet with President Donald Trump this week to discuss prescription drug prices.

How did Marathon respond to the media coverage and political pressure?

The company announced that it will delay the introduction of its $89,000 drug for the deadly muscle disease.

In the released statement, Marathon’s CEO expects patients to pay a standard co-pay of $20 per prescription. He has also said, “Our preliminary meetings with the payer/insurer community have gone well and many have acknowledged the price was appropriate given the very small patient population”.

How else can Marathon make money if they don’t sell this drug at a high price?

In addition to the approval, Marathon also won a rare pediatric disease priority review voucher from the FDA. In the past, these vouchers have fetched hundreds of millions of dollars from drug companies looking for a quick and sure way to slash months off on one of their own drug reviews.

A little over a year and a half ago, AbbVie paid $350 million to purchase one of these vouchers.

How does Faes Farma in Spain fit into the Marathon story?

The package insert approved by the FDA of EMFLAZA states “Oral Suspension made in Spain”.

In May 2015, Faes Farma in Spain, a publicly listed company with revenues in excess of Euro 200 million, had announced that it reached an agreement to market one of the drugs in its portfolio through Marathon Pharmaceuticals.

The announcement stated that Marathon planned to submit the application for registration of the drug in question at the beginning of 2016. Neither the name of the drug nor the economic value of the agreement were revealed.

A review of Marathon’s product portfolio and press releases, shows Deflazacort as the only potential product which was ready for filing in 2016.

While Marathon got approval for the 6 mg, 18 mg, 30 mg and 36 mg tablets along with an oral suspension containing 22.75 mg/mL of the active substance, Faes Farma markets the 6 mg and 30 mg tablets along with the oral suspension of the same dosage strength in Spain under the brand name, Dezacor.

According to the Ministry of Health Database in Spain, Dezacor’s 30 mg tablets were approved in 1990 while the 6 mg version and the oral suspension were approved in 1996.

How does the oral suspension sold in Europe differ from the product approved in the U.S.?

The FDA approved oral suspension contains deflazacort along with the following inactive ingredients - acetic acid, aluminum magnesium silicate, benzyl alcohol, carboxymethylcellulose sodium, polysorbate 80, purified water, and sorbitol.

The inactive ingredients listed on the package insert of the oral suspension sold in Spain are the same as that of the U.S. product.

What is the price of Faes Farma’s Deflazacort in Spain?

The drug price information available from the Ministry of Health in Spain indicates a retail price of under Euro 10.

Medicinal Product	Selling price 2017	Retail price (VAT) 2017
Dezacor 22.75 mg/ml Gotas Orales EN Suspension - N.R.: 61049	5.99	9.35
Dezacor 6 mg Comprimidos	2.43	3.79
Dezacor 30 mg Comprimidos	6.08	9.49

Our View

Until last year, no drugs had been approved by the FDA to treat Duchenne muscular dystrophy and the last drug approved by the FDA for this disease, Exondys 51™ (eteplirsen), had a contentious approval due to concerns over the science.

In a time when Donald Trump is “focused on accelerating the FDA” and an on-going argument that drugs should not have to be proven effective before getting approved, Emflaza’s approval will certainly bring into question on why drugs which are approved and demonstrated to be safe in Europe cannot be simply imported into the United States?

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Image Credit : Money Hand Holding Bankroll Girls February 08, 20117 by Steven Depolo is licensed under CC BY 2.0

“ The article is based on the information available in public and which the author believes to be true. The author is not disseminating any information, which the author believes or knows, is confidential or in conflict with the privacy of any person. The views expressed or information supplied through this article is mere opinion and observation of the author. The author does not intend to defame, insult or, cause loss or damage to anyone, in any manner, through this article.”