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Old 10-04-2015, 11:35 PM
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The NYT is really pummeling Valeant - yet another story from this weekend

Valeant’s Drug Price Strategy Enriches It, but Infuriates Patients and Lawmakers

Originally Posted by NYT
J. Michael Pearson has become a billionaire from his tough tactics as the head of the fast-growing Valeant Pharmaceuticals International.

And consumers like Bruce Mannes, a 68-year-old retired carpenter from Grandville, Mich., are facing the consequences.

Mr. Mannes has been taking the same drug, Cuprimine, for 55 years to treat Wilson disease, an inherited disorder that can cause severe liver and nerve damage. This summer, Valeant more than quadrupled its price overnight.

Medicare will now have to cover about $35,000 for the 120 capsules he takes each month, and he will have to pay about $1,800 a month out of pocket, compared with about $366 he paid in May.

Cuprimine is just one of many Valeant drugs whose prices have spiked as part of the company’s concerted strategy, which has richly rewarded its investors and made it one of Wall Street’s most popular health stocks.

But Valeant’s habit of buying up existing drugs and raising prices aggressively, rather than trying to develop new drugs, has also drawn the ire of lawmakers and helped stoke public outrage against the growing trend of higher and higher drug prices imposed by big drug companies. This year alone, Valeant raised prices on its brand-name drugs an average of 66 percent, according to a Deutsche Bank analysis, about five times as much as its closest industry peers.

The threat of government action is making the pharmaceutical industry nervous. A big sell-off in biotechnology stocks over the last two weeks helped wipe out the sector’s gains for the entire year. Valeant’s stock has been among the hardest hit, losing about a quarter of its value since Sept. 18. Still, the stock is trading for about six times as much as it was five years ago, a meteoric rise that far outpaced most drug companies.

Valeant defended itself, saying in a statement that it “prices its treatments based on a range of factors, including clinical benefits and the value they bring to patients, physicians, payers and society.” It says patients are largely shielded from price increases by insurance and financial assistance programs the company offers, so that virtually no one is denied a drug they need.

But Mr. Pearson, a former McKinsey & Company consultant, has said he has a duty to shareholders to wring the maximum profit out of each drug. And in some cases old neglected drugs sell for far less than newer drugs for the same diseases.

Valeant is an extreme example of practices that have been around in the pharmaceutical industry for years. The United States, unlike most countries, does not control drug prices, and pharmaceutical manufacturers have relied heavily on steady and sometimes outsize price increases in this country to bolster their revenue and profits.

Valeant is known for buying companies and laying off their employees to achieve savings, while accumulating a debt of about $30 billion. It spends an amount equivalent to only 3 percent of its sales on research and development, which it views as risky and inefficient compared with buying existing drugs. Traditional big drug companies spend 15 to 20 percent of sales on research and development. Valeant also pays extremely low taxes because it is officially based in Canada, although Mr. Pearson operates from New Jersey.

For example, after Valeant acquired Salix Pharmaceuticals this year, it raised the price of one Salix drug, the diabetes pill Glumetza, about 800 percent.

The price of one Valeant drug, Mephyton, which helps blood clot better, has been increased eight times since July 2014, he said, and now costs about $58.76 a tablet, up from $9.37. The price of another, Edecrin, a diuretic, has gone up nine times since May 2014 and is now at $4,600 a vial, up from about $470.

Many drugs undergoing gigantic price increases are old and no longer have patent protection, raising the question of why generic alternatives do not pop up.

The generic equivalent of Cuprimine, the drug taken by Mr. Mannes, is being sold by some foreign pharmacies for $1 a tablet, in contrast to the $260 Valeant is now charging.

For some Valeant drugs there are generic alternatives. For others, the sales have been too small to interest a generic company. That could change now that the prices are higher, but it would probably take several years for a generic-drug maker to win approval from the Food and Drug Administration to start selling such a product.

Jacking up prices of old drugs, “with no R&D risk-taking, is just not right,” Bruce Booth, a prominent life sciences venture capitalist, posted on Twitter Tuesday, adding that the practice “hurts the industry & innovators.”

But in the company’s regulatory filing for the second quarter, Valeant said that its growth in the United States and other developed markets “was driven primarily by price,” not by increased volume. Analysts at Morgan Stanley estimated that “outsized” price increases on eight drugs accounted for about 7 percent of Valeant’s revenue and 13 percent of its earnings before taxes and interest in the second quarter.
Really takes a genius McKinsey consultant to start a business model based solely on acquiring companies and jacking up prices for lifesaving drugs.

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Old 10-05-2015, 02:12 PM
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Valeant is down another 11% today

Down 33% since the end of September
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Old 10-08-2015, 06:33 PM
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Master troll is at it again

2 weeks after controversial pharma CEO Martin Shkreli announced he would lower the price of Daraprim, it's the exact same price

Originally Posted by Tech Insider Excerpts
It's been two weeks since Turing CEO Martin Shkreli announced he would scale back the price of his drug, and so far nothing has really changed.

In September, he told ABC News, “We’ve agreed to lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit."

That hasn't happened yet. A 30-day, 30-pill supply of Daraprim would cost me $27,006 at my local pharmacy.

That boils down to about $900 a pill, which includes the wholesale cost, along with specific pharmacy fees based on the zip code I gave the pharmacy.

So while the price of the drug hasn't gotten any higher since Shkreli hiked it 5,000%, it hasn't gotten any lower since he promised to reduce it either. Turing did not respond to Business Insider's request for clarification about this price.

In comparison, cycloserine, a tuberculosis drug that The New York Times highlighted early on in the drug outrage, announced its new lowered price within a day of The Times' Sunday article that was tweeted by Democratic presidential candidate Hillary Clinton.

Cycloserine, which was acquired by Rodelis Therapeutics from the Purdue Research Foundation (PRF) in August, jumped in price from $500 for 30 capsules to $10,800. After the article was published, the drug's ownership was transferred back to PRF, and the price decreased to $1,050 for 30 capsules.
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Old 10-15-2015, 12:52 PM
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More focus on Valeant

Valeant Pharmaceuticals Under Investigation by Federal Prosecutors

Originally Posted by WSJ
Valeant Pharmaceuticals International Inc. said late Wednesday it had received subpoenas from federal prosecutors seeking information related to how it prices drugs, distributes them and helps patients afford the medicines.

The subpoenas also seek information and documents from the Canada-based drug company regarding information it provided to the Centers for Medicare and Medicaid Services.

Valeant, which received the subpoenas recently, says they mostly requested information about its programs to help patients pay for the company’s drugs. “The company is reviewing the subpoenas and intends to cooperate with the investigations,” Valeant said in a statement.

Like many other drug companies, Valeant provides help to patients covering the out-of-pocket costs imposed by private health insurers. In 2014, Valeant spent $544 million on patient assistance, and expects to spend $630 million this year, according to a letter Valeant sent to Sen. Claire McCaskill (D., Mo.) on Wednesday.

The company’s drug pricing has drawn scrutiny from doctors, hospitals and Democrats in Congress after The Wall Street Journal reported in April about how it and some other companies buy and then significantly raise the prices of drugs. The article featured two drugs used in cardiac care, Nitropress and Isuprel, whose prices Valeant increased by 525% and 212%, respectively, after acquiring the medicines in February.

Citing the article during a Senate hearing in July, Sen. McCaskill asked Howard Schiller, a Valeant board member who is the company’s former chief financial officer, about the price increase for Isuprel.

Since the hearing, Sen. McCaskill has sent letters asking Valeant to explain how it decided to raise the prices for both Isuprel and Nitropress and what kind of financial impact that had on the company’s performance. Valeant’s letter on Wednesday, which was reviewed by the Journal, was in response to the questions.

In the letter, signed by CEO Michael Pearson, Valeant said that while it was buying the two drugs, it hired a consultant to review their pricing and reimbursement by the Centers for Medicare and Medicaid Services. Valeant said the consultant found that hospitals considered both drugs to be valuable to hospitals and patients after previous price increases.

The consultant found that “there was considerable room to increase the price of both drugs without unduly depleting the funds available to the hospitals from payers” even after price increases taken by previous owners, Valeant said in the letter. [DS: LOL k]

After Valeant acquired the drugs, the list price of a 1 milliliter vial of Isuprel, a treatment for abnormal heart rhythms, jumped to $1,346.62 from $215.46, according to Truven Health Analytics, which publishes average wholesale prices based on information from drug companies. A 2 milliliter vial of Nitropress, which combats dangerously high blood pressure and acute heart failure, increased from $257.80 to $805.61.

The consultant also found that raising the prices “should not reduce patient access,” Valeant said. In addition, the company said the cost of the drugs is covered by payments for the cost of the larger care given to patients, which further reduces the impact of the price increases.

Valeant said it is moving to help any hospitals whose budgets have been unduly impacted by the Nitropress and Isuprel price increases, though hospitals on average spend just $325,000 on the two drugs out of $150 million in typical yearly expenses.

Valeant said sales of Nitropress and Isuprel amounted to $247 million of the $4.9 billion in revenue it notched in the first half of this year. Its shares have been battered in recent weeks amid investor concerns whether the company could keep increasing the prices of its drugs.

Since 2007, Valeant’s drug prices have grown by a compounded annual rate of 48%, and the increases have offset declines in the volumes of drugs the company has sold, resulting in a net prescription-drug sales gain of 32%, analysts at Sector & Sovereign Research LLC said in a research note Wednesday.

These price hikes have made Valeant “one of the five largest contributors to” drug market inflation in the U.S. over the past 1 years, Sector & Sovereign analysts wrote.

A Valeant spokeswoman said the Sector & Sovereign numbers “are not accurate.” The spokeswoman said the company on Monday would give price and volume data for all its brand-name prescription drugs for the last four months.

In its letter, Valeant said increasing sales “contributes significantly more than price” to the growth of the company’s U.S. branded pharmaceuticals business. Valeant said its drug prices rose 13% between the third quarter of 2014 and the same period this year, while sales volume of the products increased about 20%.
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Old 10-19-2015, 03:34 PM
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Valeant is putting their tail between their legs and slinking away...for now...

Valeant Pharmaceuticals International Inc to steer away from ‘mispriced’ products amid drug price controversy

Originally Posted by Financial Post
MONTREAL — Valeant Pharmaceuticals International Inc. says it will refocus its model away from purchasing mispriced drugs following a storm of controversy that has culminated in subpoenas by two U.S. prosecutors seeking details on the company’s pricing and distribution practices.

“It is likely we will pursue fewer if any transactions that are focused on mispriced products,” CEO J. Michael Pearson said during a call discussing the Laval, Que.-based company’s third quarter earnings on Monday.

Pearson said that while he does not believe the company has been unfairly raising prices on acquired medications, the controversy is drawing attention away from the strong organic growth in other sectors of the business.

The company’s share price has also taken a beating, falling 26 per cent since Sept. 17.

“The prices that we took when there were mispriced assets were appropriate, but the field is very large and we’ll just be pragmatic. Why focus on areas of the business that will just focus on a lot of media stir?” said Pearson.

“We have always believed that any company’s strategy must be agile and flexible in order to navigate in an ever-changing world.”

It revealed last Wednesday that U.S. Attorney’s offices in Massacheusetts and New York had received court orders forcing Valeant to turn over documents tied to the U.S. price hikes of two heart drugs.

“In terms of our acquisitions… only very few of them were ones where we thought that assets were mispriced, where they actually were not being priced at the value they delivered to the health care system,” said Pearson.

“If people are not able to price products, it’s not good for long term markets because then you will not get competitors in.”

Pearson said Valeant’s counsel is in touch with the U.S. government and intends to co-operate with the investigations, however, the company would not be providing further information or comment to the public.

Valeant has long had to answer to concerns regarding the sustainability of a business model that relies heavily on acquiring other companies with drugs in the pipeline without investing a significant portion of its own capital into research and development.
Political risk, amirite?
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Old 10-19-2015, 03:44 PM
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"mispriced assets" - the corporate speak is always entertaining to read.
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Old 10-20-2015, 11:54 AM
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The Onion's political cartoonist really nails it this week:

Touch 'em all, Kelly!
The opinions of Doctor No do not necessarily represent the opinions of mathematicians or consulting actuaries. Facts cited by Doctor No are not necessarily facts. Find me on Twitter: @NorrisDoug. If you send me a LinkedIn invitation, please let me know who you are (unless it's obvious how I know you).
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Old 10-21-2015, 11:48 AM
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Valeant hitting 52 week low today - got as low as $106 before rebounding a bit.

Still down more than 17% today. Down over 50% from the highs earlier this year.
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Old 10-21-2015, 12:19 PM
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Wow - down more than 27% now. Right at the 52 week low from earlier this morning.

Apparently trading was halted after a shortseller (Citron Research) report called the company the "Pharmaceutical Enron."

Last edited by Guest; 10-21-2015 at 12:27 PM..
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Old 10-21-2015, 01:15 PM
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How does pharma pricing compare with prohibited price optimization by insurers? (Or is that a dumb question?)
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