- Embattled drugmaker Valeant Pharmaceuticals claimed over 90% of hospital groups would soon be covered by the company's discount and rebate program for two heart drugs, after a report from Bloomberg last week said many hospitals had yet to receive any relief from the sharply increased prices on the medicines.
- In May, Valeant had pledged to offer a 10% rebate on the drugs to all hospitals, with potential for those rebates to rise as high as 40% depending on volume purchased.
- But Bloomberg found 11 hospitals or purchasing groups, including high-profile centers like the Cleveland Clinic and Johns Hopkins Hospital, that hadn't yet seen any rebate from the drugmaker. Valeant said on Friday it had already contracted with 13 of 14 hospital group purchasing organizations, and was working to finalize the remaining contract.
Simply put, Valeant can't afford to be seen as reneging on its promise to extend the promised rebates to all hospitals.
Sharp price increases on the two drugs, Isuprel and Nitropress, drew the wrath of legislators on the Senate Aging Committee earlier this year and were a central focus of the widespread criticism Valeant faced for its pricing tactics.
When current CEO Joseph Papa took over from outgoing Michael Pearson in May, one of his first actions was to form a new executive committee responsible for pricing Valeant's drugs. And reviewing the prices of Nitropress and Isuprel, along with two other medications, was at the top of the new committee's agenda.
Valeant had acquired the drugs from Marathon Pharmaceuticals in February of 2015 and immediately hiked the price of both several times over. By the time the Senate Aging Committee focused its investigation on the drugs, Valeant had increased the prices of Isuprel and Nitropress by 720% and 310%, respectively, as these charts from the committee show.
After Bloomberg ran its story Friday, Valeant quickly issued a statement indicating the rebates would be realized first by group purchasing organizations representing hospitals.
"Under the program, GPOs may provide hospital members with upfront discounts and/or volume based rebates after the end of the quarter in which the purchases were made, " Valeant said. "Hospital representatives who were quoted in press reports that they are "paying the same high price" are likely not taking end of quarter rebates into account."
Valeant has said it made mistakes in decisions on pricing drugs and has promised to transform its business model. Given the company's past reliance on acquisitions and price hikes however, it remains to be seen if Papa can put the 'old Valeant' behind him. The rebate program for Nitropress and Isuprel could be a good gauge of how Valeant's commitment.