Pharmaceutical heavy-hitter Valeant is being forced to answer to US lawmakers about its past drug price-gouging tactics. What’s more, the Congressional grilling may be the least of its worries.
Valeant, the maker of prescription drugs Retin-A, Wellbutrin XL, and Zovirax was subpoenaed by Congress over a recent drug pricing report by Wells Fargo. The report found that Valeant’s 30 top drugs are 78% more expensive today than they were a year ago. Bloomberg called the drugmaker “a poster company for aggressive price hikes.”
Valeant’s Drugs Cost More Than a Liver Transplant
In one example of Valeant’s typical drug price-gouging strategy, after acquiring the drug Cuprimine, it subsequently jacked up its price by 5,787%. The drug now costs over $26,000. A doctor testifying at the same Senate hearings said that a liver transplant is now cheaper than a lifetime of Valeant drugs.
When one lawmaker asked if the company had ever acquired a drug without raising its price, Valeant’s top level executives had no answer.
Tip of the Iceberg Looming In Front of Valeant
The Congressional hearings add to the ongoing trouble for the big pharma company, including:
- US Securities and Exchange Commission (SEC) is investigating Valeant’s accounting and disclosures.
- North Carolina’s Department of Justice is investigating Valeant’s potential drug price-gouging for Nitropress, Imprel, and Cupermine .
- New Jersey’s securities regulator is investigating Valeant’s past relationship with pharma distributor, Philidor.
- Valeant faces a class action lawsuit over Cold-fX’s product claims.
- Drug regulators in Canada, where Valeant is headquartered, are also scrutinizing the company.
As if the hearings and legal probes weren’t enough trouble, Valeant is also dealing with $31 billion in debt and a stock price in freefall. The news is so bad that Valeant announced that it is replacing five board members, replacing some top executives, and even considering a name change to escape the shadow of its spotty past.
Hindsight Is 20/20
Michael Pearson, Valeant’s outgoing CEO, reluctantly agreed that the company’s price hikes may have been uncalled for. “In hindsight, I regret pursuing transactions where a central premise was a planned increase in the prices of the medicines,” he said.
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