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Sanders, Cummings to PTC: Price Duchenne Steroid at Import Cost

Xconomy New York — 

[Updated, 5:30 pm E.T., see below] PTC Therapeutics inherited a drug pricing controversy last week when it paid $140 million for deflazacort (Emflaza), a steroid used to treat Duchenne muscular dystrophy. So it’s no surprise that just six days after the deal, congressional drug price hawks Bernie Sanders and Elijah Cummings have come calling.

Sen. Sanders (I-VT) and Rep. Cummings (D-MD) sent a letter to Stuart Peltz, the CEO of South Plainfield, NJ-based PTC (NASDAQ: PTCT), requesting information about the price the company intends to charge for deflazacort. PTC hasn’t yet disclosed a price. But Sanders and Cummings have zeroed in on the drug because its previous owner, Marathon Pharmaceuticals, priced deflazacort at $89,000 upon FDA approval in February—despite the fact that it’s been available in other countries for years at a fraction of the cost. The drug has no patent protection or market exclusivity in the U.S. and can be imported from the U.K., according to the letter, for anywhere from $1,000 to $1,200 per year.

[Updated with comment from PTC] “PTC is aware of the letter sent by Senator Sanders and Representative Cummings and we plan to respond within the designated timeframe,” said Peltz, in an e-mailed statement to Xconomy. “As previously stated, PTC continues to engage with key stakeholders to understand how to make [deflazacort] available to patients who need it.”

Deflazacort isn’t a cure for Duchenne, a progressive and deadly disease that causes patients to lose their ability to walk at an early age. It’s a steroid that reduces inflammation and helps boost muscle strength. Marathon didn’t conduct the initial work on deflazacort. It acquired rights to clinical trial work done in the 1990s, ran some additional analyses, and then won FDA approval. What’s more, the approval also brought the reward of an FDA priority review voucher. These vouchers, which speed up the review of a drug, have been sold for as much as $350 million.

Once Marathon announced the price for deflazacort, the drug immediately became the latest lightning rod in the ongoing U.S. drug pricing debate. Marathon was publicly chastised, and even scolded by industry lobbying group PhRMA. Sanders and Cummings immediately went after Marathon, calling the price “unconscionable” and an abuse of the Orphan Drug Act, which gives drugmakers developing therapies for rare conditions longer market exclusivity and tax breaks. Such drugs typically command very high prices because of the small patient groups they treat. (Kaiser Health News just reported that the Government Accountability Office will soon begin an investigation into potential abuses of the program).

Sanders and Cummings followed up with a letter to the FDA just last week expressing concerns about deflazacort’s price and questioning the process that led to the drug’s approval. Rather than deal with the headache, Marathon sold the drug to PTC for $75 million in cash and $65 million in PTC shares. Biotech analysts were skeptical of the decision. In a research note the day of the deal, RBC Capital Markets’ Simos Simeonidis predicted PTC would have a “very difficult” time turning deflazacort into a profitable product given the controversy and current pricing environment.

“It is clear to us that the company has no choice other than dramatically lowering the price,” Simeonidis wrote.

Now, Sanders and Cummings are calling on PTC to do just that. They want PTC to keep the drug “at its importation cost,” according to the letter.

“Doing so will allow patients to use deflazacort without going into bankruptcy,” they wrote, requesting a response by April 3. The two added that they want to know if the company intends to pursue FDA approval of the drug in juvenile arthritis—another orphan disease.

Here’s more on deflazacort, Duchenne, and orphan drug prices.

Photo of Bernie Sanders Rally in Raleigh, N.C. (March 11th 2016) by flickr user Scott Pelkey via a Creative Commons license.