Drug companies can't currently help Medicare patients pay for out-of-pocket drug costs. But Valeant ($VRX), which has come under the lens for its price-hike strategy, wants to change that.Interim Valeant CEO Howard Schiller
In remarks prepared for Thursday's congressional drug price hearing, interim company CEO Howard Schiller urged the House Committee on Oversight and Government Reform to amend those rules, arguing that they prevent companies from helping "some of the patients with the most acute need for assistance," The Wall Street Journal reports.
Congress may not be so keen on the idea of rewriting the rules. Copay coupons for patients in Medicare and other government-funded healthcare programs are considered an illegal kickback under federal law, forcing drugmakers to limit their assistance to those with commercial insurance. And in that realm, it's a practice despised by private payers, as it helps send patients to higher-cost meds over generics and alternative brands.
But if it did, Valeant could see a boost. Patient assistance helps it protect its price hikes; as the strategy goes, some insurers will cover drugs at their raised prices, and Valeant can still profit by helping those that won't. According to Valeant estimates, the company spent more than $630 million helping patients afford copays and other patient assistance in 2015--some of that flowing through Philidor, the specialty pharmacy that shut down last year after claims that Valeant was using it to inflate its top line. And the Canadian pharma predicts that spend will increase to $1 billion this year, he said.
Plus, helping patients cover their out-of-pocket costs is a PR move for the company, whose tactics have landed it in a negative light lately. As one company marketing exec commented on a September 2013 document obtained by the House committee, it's "kind of hard to paint us as greedy if we have removed financial barriers for patients."
Meanwhile, other documents scrutinized by the committee--and summarized in a public memo earlier this week--triggered a statement from the company Wednesday noting that on a conference call last April, CEO J. Michael Pearson may have misspoken when attributing most of Valeant's quarterly revenue growth to volume rather than price.
That characterization "would not have been accurate" if Pearson were referring to total revenue growth, rather than just that of its top 20 sellers, the company said, as quoted by the Journal.
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