- Valeant and Walgreens have entered a drug-distribution deal in which Valeant will buy back the rights to its own treatments from Walgreens (without actually taking back the product) and then have the pharmacy sell the drugs on consignment, the Wall Street Journal reports. This is known as a title swap and is a big departure from usual arrangements wherein distributors purchase drugs wholesale.
- As part of the deal, Valeant will take a $150 million revenue hit.
- The goal of this deal is to replace the controversial mail-order pharmacy program that was run by Philidor Rx on behalf of Valeant.
The fact that Valeant has partnered with Walgreens is largely viewed as a turn in luck after several relentless months of scrutiny and tumbling shre prices. Under the deal, Valeant is partnering with the drug store giant to fill prescriptions for its skin and eye drugs, as well as several other categories of treatments, in order to help patients offset out-of-pocket costs.
Although skipping the wholesaler is an unconventional move, nothing about Valeant's situation over the past few months has been "normal," strictly speaking.
After falling more than 65% since the Philidor story first broke, Valeant's stock has risen more than 32% over the past month thanks to a barrage of investor-mollification on the pharma giant's part (including slashing earnings forecast for this year and 2016 in order to focus on debt reduction).