Walgreens CEO hops on the pricing critic train, says consumer Rx should be cheaper
- Walgreens Boots Alliance CEO Stefano Pessina on Thursday told Bloomberg during an interview at the World Economic Forum in Davos that consumer drug prices should be lower.
- "It should be lower prices to the end user," said Pessina.
- Drug pricing has been one of the most prominent issues facing the biopharma industry in the past year and has remained an area of focus during the 2016 presidential election cycle. The House Oversight and Government Reform Committee will be holding a hearing centered on drug price hikes in which Valeant interim chief Howard Schiller is expected to testify and former Turing CEO Martin Shkreli has been subpoenaed to attend.
What's interesting to note here is that Pessina's company has itself struck a major, 20-year distribution deal with one of the companies at the heart of the current drug pricing furor: Valeant.
Under the terms of that arrangement, Walgreens pharmacies will sell Valeant's dermatology and ophthalmology products, as well as the female libido product Addyi, at discount rates. Rather than purchase the therapies wholesale (as is the usual arrangement), Valeant will retain the rights to the drugs on Walgreens' shelves while the latter firm will collect fees and sell the products on consignment.
This deal has attracted a bit of scrutiny. But Pessina has defended it enthusiastically, arguing that cost controls are at the heart of the arrangement and that similar distribution pacts are utilized in Europe.
"Our agreement with Valeant demonstrates how we can use our pharmacy network to improve access and service level while reducing costs in the healthcare system," Pessina told the Wall Street Journal in an interview earlier this month.
Pessina, an Italian billionaire, was made the permanent CEO of Walgreens Boots Alliance after the firm bested quarterly expectations last summer.