Old drug gets an absurd price hike to $89,000 per year

The move highlights problems with incentives for medical science.

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Martin Shkreli doesn't have a monopoly on jacking up drug prices. Marathon Pharmaceuticals has received FDA approval for an old drug used to treat Duchenne muscular dystrophy, deflazacort, and in the process has raised the price to ridiculously high levels. You could previously import the generic medicine for about $1,200 per year, but it now costs a staggering $89,000 per year -- "just" $54,000 with discounts and rebates. And since deflazacort (now rebranded as Emflaza) is classified as an orphan drug used to treat a rare disease, Marathon will both have a 7-year exclusive on US sales and a voucher to fast-track a future approval.

The practical cost will be negligible if you have appropriate health insurance, and Marathon contends that this is a low price for a rare disease drug. FDA approval should also increase access to a drug that may be too expensive to buy outright for some, even in its generic form.

However, the price hike underscores a problem with American pharmaceutical companies exploiting the orphan drug label to reap massive profits from medicine. The category was originally meant to encourage companies to develop treatments for rare conditions, but it's hard to make that case for Emflaza when far less expensive alternatives have been available for years. Moreover, Marathon could sell the review voucher for hundreds of millions of dollars. As helpful as the approval is, it suggests that reform is needed to strike a balance between rewarding scientific research and keeping prices down to Earth.

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