Valeant fights back against drug pricing criticism as stock tumbles
- The House Oversight and Government Reform Committee has asked committee chair Rep. Jason Chaffetz (R-UT) to subpoena Valeant to turn over all documents related to the February price increases of Isuprel and Nitropress. Valeant increased the prics of these drugs 525% and 212%, respectively, after purchasing them.
- Since September 21, when presidential candidate Hillary Clinton accused some biotech companies of price gouging in the wake of the much-publicized Martin Shkreli/Turing Pharma price hike debacle, Valeant's stock has fallen roughly 25%.
- Citron Research, Veritas Investment Research, and AZ Value Investing are all bearish on Valeant. But the company is pushing back against the narrative and insisting that re-pricing drugs is a "small part of Valeant's business," Bloomberg reports.
Valeant has been in the practice of buying companies and increasing prices of its newly acquired drugs for some time, but the astronomical increases in the prices of Nitropress and Isuprel caught the attention of many important players, including members of Congress. Since then, Valeant has been in the crosshairs of an intense debate about drug pricing and the sustainability of the healthcare system given how strikingly some drug prices have risen.
In response to the criticism and the bearish position that some analysts have taken on Valeant, the company made the case that there is a difference between wholesale acquisition cost (WAC) pricing and the real prices paid by various payers, including the government, private insurance companies, and group purchasing organizations. Their point was that actual costs are generally much lower than WAC costs.
Depsite this argument, Valeant has not disclosed net prices for most of the its drugs that have recently increased in price. Valeant has also pushed back against the analysts' bearish position.