Valeant's ($VRX) greedy price-hiking image just went from bad to worse. The beleaguered company has already come under fire for jacking up prices on a number of meds, including cardio drugs Isuprel and Nitropress. Now, Valeant is facing pushback for raising the price on a drug commonly used for terminally ill patients who want to end their lives.
Last year, the Canadian drugmaker doubled the price for Seconal, also known under its generic name secobarbital, one month after California lawmakers proposed to legalize physician-assisted suicide. Valeant had bought the drug last February, when it was priced at $1,500. And in 2009, Seconal was priced at less than $200 for 100 capsules, which constitutes a lethal dose, according to National Public Radio.
Over the next 6 years, the drug's price increased to $1,500, according to Medi-Span and First Databank data cited by NPR. When Valeant got its hands on the med, it doubled the price to $3,000. "It's just pharmaceutical company greed," David Grube, a family doctor in Oregon where doctor-assisted death is legal, told NPR.
Valeant is defending the price hike for Seconal. The company "sets prices for drugs based on a number of factors," it told NPR in a statement, including costs associated with R&D, available generics and the benefits of the drug compared with more costly treatments. And "(w)hen possible, we offer patient assistance programs to mitigate the effects of price adjustments and keep out-of-pocket costs affordable for patients," Valeant said.
But the company can't use R&D costs as an excuse for raising Seconal's price, Grube pointed out. Seconal has been on the market for 80 years. "It's not a complicated thing to make, there's no research being done on it, there's no development. That to me is unconscionable," Grube said.
Still, some drug pricing experts are citing reasons behind Valeant's price hike on Seconal. The drug went off patent in the early 1990s and faced little generic competition thereafter, Mick Kolassa, founding partner of pharma consulting firm Medical Marketing Economics told NPR. And demand for the brand-name drug could be so low that it's difficult to recover the costs of making and selling it.
"Here's a company that said, well, we can raise the price, keep it on the market and make some money with it. Or we can walk away and the product goes away," Kolassa said, as quoted by NPR.
Still, Valeant's move does little to detract from its current slate of woes. The company last year came under fire for its price hikes, especially those for Isupress and Nitropress. Valeant raised the drugs' prices by 525% and 212%, respectively, after acquiring the meds from Marathon Pharmaceuticals, setting off a firestorm of criticism from lawmakers.
The company is also the target of two federal probes over its price hikes. Last year, the U.S. Attorney's Office for the District of Massachusetts and the U.S. Attorney's Office for the Southern District of New York demanded that Valeant turn over information about its price increases for certain drugs.
Meanwhile, the debt-laden company is trying to recover from its latest mess. Valeant CEO J. Michael Pearson--who will exit the company, it announced this week--told investors that accounting issues related to its former specialty pharmacy Philidor would prompt a delay on the company's regulatory filings and potentially put it at risk for defaulting on its debt. Pearson also pointed to grossly underperforming businesses within the company.
Valeant's shares tumbled by more than 50% as a result, spurring Pearson's hasty departure. Now, activist investor and new board member Bill Ackman is trying to turn things around. Earlier this week, Ackman said that Valeant could consider spinning off a stake in its eyecare division Bausch & Lomb to pay down some of its debt.
- read the NPR story