Valeant Pharmaceutical’s interim CEO Howard Schiller has been at the helm for a week now, and he’s already responding head on to the government and public’s criticism of the drug maker’s jacking up prices for its drugs.
“We will be relentlessly focused on providing easy and affordable access for physicians and patients,” said Schiller during the company’s presentation at the JPMorgan Healthcare conference in San Francisco Wednesday.
A key part of this strategy is its new relationship with Walgreens (WAG), which will distribute Valeant’s drugs through its network of specialty pharmacies as part of a 20-year contract. The first of two programs with Walgreens focuses on distribution of Valeant’s branded dermatology and opthalmology drugs; it will officially launch on Friday.
Valeant expects the program to be fully operational within about six months, and the goal is for Walgreens to sell the drugs at an average of 10% discount to the Valeant price. The new Walgreens deal is expected to be a breakeven venture for Valeant this year and won’t significantly add to the company’s top line results, according to Schiller.
This plan raised concerns among analysts who worry about how Valeant plans to grow, given its reliance in previous years on acquisitions and price hikes. Schiller told analysts that they “shouldn’t expect excessive price increases” in certain portfolios for the time being, but Valeant (VRX) will instead focus on expanding its new drugs via research and development and increasing access to its medicines.
Valeant has been at the center of the drug price debate since late last year and received a subpoena in October from federal prosecutors concerning its pricing strategy. Investigators asked for more information on how the drug maker prices and distributes its drugs after a string of older treatments sold by Valeant got significantly more expensive in recent years.