Responding to criticism, Valeant on Monday unveiled broader discounts for hospitals on its heart drugs Isuprel and Nitropress. Senators at a recent congressional hearing had sharply criticized the company for failing to deliver on prior promises of volume-based discounts.
All hospitals will now receive a rebate of 10%, while hospitals which buy large volumes are eligible for 20%, 30%, or 40% discounts.
Additionally, Valeant's newly formed Patient Access and Pricing committee confirmed the company would not raise the price of either drug further, nor reduce the discount levels. But Valeant has already raised the price of Isuprel and Nitropress by 720% and 310%, respectively, since acquiring them in February 2015, according to the Senate Aging Committee.
At the April 27 hearing in front of the Senate Aging Committee, senators confronted Valeant on its claims it had offered hospitals a 30% discount on Isuprel and Nitropress. Senators Susan Collins (R-ME) and Claire McCaskill (D-MO) said they had surveyed numerous hospitals in their states and found none which had received the promised discounts.
Documents later released by the Aging Committee included letters from administrators at prominent hospital networks describing stonewalled efforts to win the discount.
Valeant now appears to have finally followed through on its promise. The company said the discount would primarily be offered through group purchasing organizations rather than directly to individual hospitals.
"Under this new program, the discounts we previously implemented for Nitropress and Isuprel will be simplified and more accessible," said Joseph Papa, Valeant's new CEO. "We are committed to getting this right."
A drop in the bucket?
Even with the discounts, however, prices for the drugs will remain significantly higher than in previous years. After Valeant acquired the drugs from Marathon Pharmaceuticals in 2015, it immediately raised prices by many times over, as the following charts from the Senate Aging Committee show.
While Valeant has emphasized that price increases have had a limited impact on the average hospital's cost, stories from some of the hospitals contacted by the Senate Aging Committee reveal the dramatic effect seen by some.
The Cleveland Clinic, which has a network of 11 hospitals, spent nearly $5.4 million on the two drugs last year. Johns Hopkins health system, a five-hospital network, spent $1 million.
Scott Knoer, the chief pharmacy officer at the Cleveland Clinic, said in comments to the New York Times, "They [Valeant] raised the price 800 percent, and they are going to give 30 percent? It is still not enough, compared to the egregious price increases they have done."
But the new discounts are the first public action taken since Valeant formed its new pricing committee. Brought in to turn the company around after a damaging year, Joseph Papa has acknowledged past mistakes in pricing drugs and committed to "ensuring those mistakes are not repeated."