Dive Brief:
- At Senate hearing on Valeant's drug pricing on April 27, the company claimed that it has offered hospitals volume-based discounts for Nitropress and Isuprel, but hospitals say those have yet to materialize.
- As of April 25, only three companies---MedAssets Performance Management Solutions, Premier Healthcare Alliance, and Kaiser Foundation Hospitals/Kaiser Foundation Health Plan--had entered into contracts with Valeant. However, hospitals nationwide, including some of the largest and most well-known, have not received the discounts because of Valeant's failure to follow up after original contact, or because they do not qualify because of the high-volume purchases needed to qualify.
- Because Nitropress and Isuprel are used to treat atrial fibrillation, congestive heart failure and hypertension, all high-prevalence conditions, the financial impact has been dramatic.
Dive Insight:
Although Valeant entered into contracts with MedAssets, Premiere and Kaiser, it did not extend discounts to each of the individual hospitals in each hospital system. For example, only two hospitals within Premiere's 2,500-hospital system have received the 30% discounts that Valeant mentioned at the Senate committee meeting, according to The New York Times.
Given the demand for cardiovascular (CVD)-related interventions in hospital settings, the 300% increase in the cost of Nitropress and the 718% increase in Isuprel's price have had a significant impact on hospital bottom lines since Valeant bought these drugs from Marathon Pharmaceuticals in Februrary 2015.
Cleveland Clinic said it spent $5.3 million on the two medications last year, while Johns Hopkins spent roughly $1 million. Hospitals count on a mainstay of old-line, value-priced drugs to balance the budget and serves the needs of patients, so these steep price increases are deleterious for providers, patients and payers.
In order to qualify for the discounts, high-volume purchases are required---something that most hospitals aren't willing or able to do. Even large hospitals like Cleveland Clinic, Mayo Clinic and New York-Presbyterian are left out in the cold, not to mention smaller healthcare systems.
Under the leadership of the new CEO Joseph Papa, along with a board with many new members, Valeant seems to be moving toward some type of corporate reform. Nonetheless, its approach to this issue, as well as its failure to simply drop the prices of Nitropress and Isuprel downward toward January 2015 prices, shows evidence of a fallback in behavior, cloaked in the guise of reform.