People, Pricing

PhRMA disses Marathon CEO—and PhRMA board member—Jeff Aronin after latest price gouging controversy

After maintaining a steadfast silence for the past five 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. 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.

Aronin protested to Duchenne parents last Friday that the company did “heavy lifting” in its R&D program that justified the price. The research made valuable contributions to understanding the drug, he added, leaving the company in a hole that would take years to extricate itself from. But trial experts told me that the kind of R&D program that Marathon did could be easily covered by a year’s worth of revenue from just a slice of the potential market that he hoped to sell to.

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.

At the time, Shkreli fired back that he had learned everything about raising prices from Marathon.

For now, Aronin remains on the board at PhRMA. But his odds of making it much longer aren’t good. Marathon did not immediately respond to a query. And Aronin has consistently refused to take a call from me.

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