Valeant Pharmaceuticals and Turing Pharmaceuticals both introduced similar business tactics last year – they bought the rights to drugs that had already been developed and then increased the prices. EPM looks at how it all started and what Valeant is now doing to put things right
Both companies faced harsh reviews in the press following price increases in drugs which stretched from a 550% (Valeant) increase for a heartburn pill to a 5000% increase (Turing) for a drug to treat malaria and HIV.
Commenting on the increase Valeant’s then CEO J. Michael Pearson said to CNBC: “My primary responsibility is to Valeant shareholders. We can do anything we want to do.”
Since then Turing’s Martin Shkreli has been arrested and replaced as CEO and Valeant’s Person has likewise been replaced by interim CEO Howard Schiller.
The Valeant business plan has also been altered and involves a new relationship with Walgreens according to a report by Fortune.
Schiller was keen to highlight Valeant’s new business collaboration at the 2016 JPMorgan Healthcare conference in San Francisco where he said: “We will be relentlessly focused on providing easy and affordable access for physicians and patients.”
The team-up will enable Walgreens to distribute Valeant’s drugs through its network of specialty pharmacies as part of a 20-year contract. The first of two programs with Walgreens focuses on distribution of Valeant’s branded dermatology and opthalmology drugs according to Fortune.
Walgreens will distribute these drugs at a 10% discount to Valeant’s original price and according to Schiller will won’t add to the company’s top-line result but will help them to instead break-even financially.
Schiller told analysts that they, “shouldn’t expect excessive price increases” in certain portfolios for the time being, but Valeant VRX -1.19% will instead focus on expanding its new drugs via research and development and increasing access to its medicines Fortune reported.