As new CEO takes over, Valeant forms committee to oversee drug pricing
- Valeant Pharmaceuticals on Thursday announced the formation of a new committee to oversee drug pricing, a little more than a week after senior company executives admitted to mistakes in aggressively raising prices at a congressional hearing.
- The committee will be chaired by Valeant's new CEO Joseph Papa, at least initially, and will specifically review pricing for four drugs: Nitropress, Isuprel, Cuprimine, and Syprine. These drugs have been the focus of a Senate investigation after higher prices led to heavy burdens for hospitals and patients.
- Valeant leadership has undergone dramatic changes over the past several months. In addition to replacing long-time CEO Michael Pearson with Papa, eight new directors have joined Valeant's board of directors.
The new "Patient Access and Pricing" committee will be responsible for pricing Valeant's drugs and will include doctors, scientists, and other executives.
"Valeant has made mistakes in how it priced its drugs in the past, and we are committed to ensuring those mistakes are not repeated," said Papa in a statement. "Valeant's number one priority is ensuring patients can access the medicines they need."
Additionally, the company said it has reached out to hospitals to discuss discounts on the two heart drugs, Isuprel and Nitropress. Valeant had previously promised a 30% volume-based discount to hospitals for the drugs. But at a congressional hearing last week, senators rebuked the company for failing to actually extend the discount to hospitals.
Immediately after acquiring Isuprel and Nitropress from Marathon Pharma in 2015, Valeant jacked up their prices by 720% and 310%, respectively.
Board member Bill Ackman, an influential activist investor who has pushed Valeant to change, promised senators to automatically grant the 30% discount across the board, as well as substantial - but unspecified - price reductions on Cuprimine and Syprine.
Along with the sweeping changes to leadership, Valeant recently filed an overdue annual report, easing the risk of default the company faced from breach of contract. But the company may still receive default notices in the future if it doesn't file its first quarter report on time, although it did win an extension from some creditors.
Papa must also guide the company through several federal investigations and address the roughly $30 billion in debt built up from the string of acquisitions under Pearson.
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