Valeant ($VRX) promised it would offer discounts to hospitals of up to 30% on Isuprel and Nitropress, two heart drugs whose prices it raised dramatically after picking them up last summer. But so far, some of the nation’s top users of the meds are still wondering where those discounts are.
The Cleveland Clinic--which doled out more than $5.3 million on the pair of treatments last year--hasn’t heard a word about discounts from the Canadian drugmaker, chief pharmacy officer Scott Knoer told The New York Times. A pharmacist who negotiates drug prices on behalf of the University of Utah Health Care System, which shells out more than $640,000 per year on the duo, reported “crickets.”
Valeant’s silence comes despite a rebate program then-interim CEO Howard Schiller detailed back in February before the U.S. House of Representatives’ Committee on Oversight and Government Reform--a committee that’s been dogging the Quebec-based pharma since it hiked the wholesale prices of Isuprel and Nitropress by 536.7% and 236.6%, respectively. Since Schiller’s appearance, the company’s now-departed longtime CEO, J. Michael Pearson, has also testified before a committee of the U.S. Senate that Valeant “made mistakes” with its “too aggressive” pricing strategy.
Yet the Cleveland Clinic and University of Utah Health Care System aren’t alone, the Times reports. Premier, one of two group purchasing organizations through which Valeant has vowed to offer the discounts, told the newspaper that the drugmaker set such strict requirements for the price breaks that only a few hospitals received any.
Of its 2,500 members, only one is receiving a full 30% discount on Nitropress, and one is receiving it on Isuprel. “The percentage of hospitals getting the discount was so low because it only applies to very-high-volume purchases,” Premier spokeswoman Amanda Forster told the NYT in a statement.
As for most of the others? They qualified for discounts of just one cent off the wholesale price--“essentially no discount” at all, Premier said.
It’s not a good look for Valeant, which is in heavy repair mode with its tattered image. Aside from the pricing controversy, it’s been plagued over the past several months by channel-stuffing allegations, debt-default worries and sluggish sales, all of which have seriously damaged investor confidence and sent shareholders running for the exits.
But the company hopes new personnel can help put it on the right track. It recently instated a new skipper in Joseph Papa--poached from OTC specialist Perrigo ($PRGO)--and overhauled its board, which now features activist investor Bill Ackman.
If it wants to get back on the good side of hospitals, though, it may have to put more than just its 30% discounts in order. Even if the Cleveland Clinic was offered the discount, it still wouldn’t be enough, “compared to the egregious price increases they have done,” Knoer said.
- read the NYT story (sub. req.)
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