Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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PhRMA Embarrassed by Marathon is Forced to “Review” Membership Criteria – Is a Purge in the Cards?

PhRMA Embarrassed by Marathon is Forced to “Review” Membership Criteria – Is a Purge in the Cards? | Pharmaguy's Insights Into Drug Industry News |

After maintaining a steadfast silence for the past 5 days, PhRMA is cutting Jeff Aronin loose.


The Marathon CEO and PhRMA board member triggered a tempest over his announcement last Thursday evening that he would price his newly approved steroid — a cheap, generic offering sold in many countries around the world as deflazacort — for $89,000 a year after landing an approval to market it for Duchenne muscular dystrophy. According to a number of patient advocates, they’ve been buying the drug from overseas for about $1,000 a year.


On Monday Senator Bernie Sanders and Congressman Elijah Cummings accused Aronin and Marathon of ripping off the system in the latest example of a drug executive looking to cash in after gaming the FDA’s approval process (read “Senators Launch Probe into Marathon's $89K Price Tag for ‘Cheap Steroid’ - Company Retreats”; Now PhRMA says Marathon is guilty of conduct unbecoming to the industry, launching a review on membership criteria that would likely leave Aronin in the cold.


Their statement tonight:


We are pleased Marathon decided to pause the launch of their medicine to solicit additional input from patients and other stakeholders. Their recent actions are not consistent with the mission of our organization. In addition, the 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.


This is just the latest in a series of embarrassing controversies centered on charges of price gouging. Turing CEO Martin Shkreli got it started. Valeant was quickly swept up. And then Mylan took a turn in the public stocks. Now it’s Marathon’s time to stand in the spotlight.


By Wednesday night Aronin was more of a liability to PhRMA than a benefit. Just weeks ago the trade group began an ambitious marketing campaign aimed at highlighting the contributions of medical research. It was time, said PhRMA CEO Stephen Ubl in a thinly veiled jab at Shkreli, for more lab coats and fewer hoodies (“PhRMA's Dark Inspirational Video Starts a 6-Month Offensive: ‘Less Hoodies, More White Coats’";


At the time, Shkreli fired back that he had learned everything about raising prices from Marathon (read “’I Literally Learned from This Guy,’ Says Martin Shkreli of Marathon CEO Jeff Aronin”;


For now, Aronin remains on the board at PhRMA. But his odds of making it much longer aren’t good.

Pharma Guy's insight:

Meanwhile, some in the industry are urging Big Pharma to Secede from PhRMA: 

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“I Literally Learned from This Guy,” Says Martin Shkreli of Marathon CEO Jeff Aronin Who Set Price of Duchenne Drug at $89,000

“I Literally Learned from This Guy,” Says Martin Shkreli of Marathon CEO Jeff Aronin Who Set Price of Duchenne Drug at $89,000 | Pharmaguy's Insights Into Drug Industry News |

In a controversial move, Marathon Pharmaceuticals is charging $89,000 a year for a decades-old drug that was approved by US regulators on Thursday, but has sold for a fraction of the price in other countries. Known as deflazacort, the steroid will be used to treat Duchenne muscular dystrophy, a rare disease that mostly affects young boys, causing muscles to deteriorate and leading to an early death.


The pricing, however, has upset some patient groups, who say that online pharmacies in the UK and Canada sell the medicine for about $1,000 annually, and the approval will preclude imports. They also note the drug received orphan designation, since it treats a rare disease for a small patient population, which means Marathon has seven years of exclusive marketing before rival medicines become available.


“It shows they have no appreciation for the cost to the health care system,” said Christine McSherry, who runs The Jett Foundation, a nonprofit group that advocates on behalf of children with DMD. “They’re taking a drug that costs less than $2 and jacking up the price. This affects entire landscape and this is sort of move that causes premiums to rise.” She pays $1,600 a year from a UK pharmacy.


This is not the first time that Marathon chief executive Jeff Aronin has generated controversy over his pricing strategies. In years past, the Federal Trade Commission and Senator Bernie Sanders (I-Vt.), a harsh critic of high drug prices, have attacked his moves, although more recently, a company that he once ran was praised by Martin Shkreli for its pricing maneuvers.


In 2008, the FTC filed a lawsuit against Ovation Pharmaceuticals, which Aronin ran at the time, accusing the company of price gouging and illegally maintaining a monopoly. Ovation bought the only two medicines that were approved to treat premature babies born with a potentially life-threatening congenital heart defect — and then increased prices nearly 1,300 percent.


The FTC eventually lost the lawsuit, but the episode did not go unnoticed by Shkreli. The infamous pharma bro, who gained notoriety after buying an older drug and raising the price by 5,000 percent — and then taunting critics on social media — recently praised Ovation on his web site. “These guys invented price increases,” he wrote. “I, literally, learned it from them.” And he noted Ovation was later sold for $900 million.

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