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Cotton Speaks on the Senate Floor About Skyrocketing Drug Prices

February 16, 2017

I recently read a story in the Wall Street Journal that I thought was so alarming it demanded action. Here's the headline: "Marathon Pharmaceuticals to Charge $89,000 for Muscular Dystrophy Drug After 70-Fold Increase." Yes, that's $89,000 a year, and yes, that is a 70-fold increase-"70-fold" as in 7,000 percent. Now, for those of you who haven't read the article, here's the story.

There's a rare disease called Duchenne muscular dystrophy. It affects about 12,000 young men in the United States-most of them, unfortunately, end up dying in their 20s and 30s because of it. We don't have a cure yet for Duchenne. And until recently, there was not even a treatment with FDA approval. So for many years now, patients and parents have been importing a drug called deflazacort, a steroid, from other countries. Even though it's not a cure, it at least helps treat the symptoms, and it's been a welcome relief to many families.

Well, technically it's illegal to import a drug that doesn't have FDA approval. But there's a catch. The FDA doesn't quite enforce the ban against all unapproved drugs; in fact, it's issued regulatory guidance saying you can get an exemption and buy an unapproved drug from overseas, if you meet five conditions. First, you have to have a serious illness for which there's no other treatment available. Second, you can't sell the drug. Third, you can't pose an unreasonable risk to your health. Fourth, it's got to be for you and you alone. And fifth, you can't buy more than a three-month supply.

All that sounds fair enough. But if somebody comes along and gets FDA approval for their version of the exact same drug-the exact same chemical composition of the drug that's being imported-then you cannot buy it overseas anymore. That's exactly what happened here. This was not a new drug. This was not a medical breakthrough. This was not a scientific advance. This was, plain and simple, an arbitrage opportunity. Other people had already gone through the trouble of making a drug that worked. But if you paid the expenses of getting FDA approval, you'd essentially buy for yourself monopoly pricing power. That's what other companies missed. And now, to cover the costs of going through that approval process, Marathon is increasing the price-from roughly $1,500 a year to $89,000 a year.

I don't think it's an overstatement to say this turn of events is nothing short of outrageous. It defeats the very purpose of our FDA laws. The reason we offer people the chance to create a monopoly is to encourage innovation-medical breakthroughs-to generate new drugs that are going to solve diseases or illnesses. What we're saying is, "If you go through the pain and the expense of developing a new treatment, we'll give you the sole rights to sell it for a number of years so you can recover your costs and therefore we will encourage more medical breakthroughs-to alleviate pain and suffering of the American people." In other words, monopoly rights are not merit badges. They're not a reward for business smarts. They're supposed to serve the interests of patients. They're supposed to expand access to treatment. But in this case, what we see in our system is it is, in fact, restricting access and driving up the price for that coverage.

Now, I understand that many people with Duchenne are happy that Marathon has done this-because now that the drug has FDA approval, insurance companies will likely cover it; unlike before when people had to pay for it out of pocket-meaning that poor kids didn't get access to deflazacort, whereas upper-middle-class and rich kids typically did. I also know that Marathon has promised to increase spending into research on a new drug and to help people of limited means afford that treatment. That too is all to the good. I'm not casting aspersions on anyone's motives here. But let's be real: Someone has got to pay the full price of this drug at $89,000 a year. We have a drug here that used to be available for $1,500 a year and now it is $89,000 a year. Whatever happened, that is a system-wide failure, and we as a Congress have to address it.

There's simply no getting around the fact that this story should never have been written in the first place because it should've never happened in the first place. We should be channeling people's ambition and entrepreneurial spirit into finding cures, not finding new and clever ways to make a profit. That's what our food and drug laws are designed to do, and that's what they have clearly failed to do in this instance. So I just want to say: I'm not going to let this story disappear. I'm going to work with my colleagues to find a legislative solution to this mess and promote affordable, high-quality health care for all-for all families whose young children suffer from Duchenne and for every other orphan disease that has drugs, that can be treated, and right now are being blocked from the market or for which we're paying way too much money as a society.