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A steroid treatment that has been available for years outside the U.S. was given approval by the FDA this week to be used to treat a rare disease afflicting approximately 15,000 people in the United States.
Although it was not previously approved for use in the U.S., deflazacort, has for many years been used by patients who suffered from the devastating as well as fatal disease Duchenne Muscular Dystrophy. It can be imported for approximately $1,200 annually.
However, now the price will be $89,000 per year. Following rebates and other discounts, the price is $54,000 per year, said Marathon Pharmaceuticals CFO Babar Ghias.
The company asked the FDA for approval of deflazacort as an orphan drug, which is a special pathway to approval that is intended to encourage more development of treatments for rare diseases.
With its orphan designation, the pharmaceutical company is allowed seven years of exclusivity to sell the treatment in the U.S., even though the drug has been available for years in other countries as a less expensive generic.
A voucher known as a priority review was given to the company, which essentially is equal to a ticket that can be used to get a drug in the future reviewed faster by regulators, or can be sold for hundreds of millions of dollars to another pharmaceutical company.
The vouchers, in theory, exist for positive reasons as regulators try to encourage investment by companies in the development of drugs to use against rare diseases that are afflicting children.
However, when there are old drugs that are already in use for a disease that go through the process of approval to earn the valuable voucher, and high price, it raises questions if the incentives are being applied incorrectly.
For the patient, the cost of this drug, which is known as Emflaza, would be zero to a slight out of pocket expense, due to financial assistance programs and insurance, said CFO Ghias.
However, critics of the old drugs receiving high prices, say the programs are just public relations to insulate the business from its biggest potential critics – the families with dying children who regardless of cost want access to the treatment.
Over the past few years, companies that have gained approval for old or an existing drug to treat rare disease have received huge financial awards.