Months after Valeant Pharmaceuticals International Inc. said it would make discounts available to U.S. hospitals for two high-priced heart drugs, some medical centers say they have yet to see a cent of savings.
Valeant became the face of high American drug prices when it acquired Isuprel and Nitropress last year and immediately raised their prices by 525 percent and 212 percent. Facing a backlash, representatives from the company stood before Congress in April and said they would work to cut prices for the drugs.
The drugmaker's chief executive officer says the discounts are available to all. Yet according to some hospitals, they haven't gotten them. In some cases, the hospitals said Valeant's contract offers were undesirable. In others, they were unable to get a response from the drugmaker. Others appeared not to know that they might need to negotiate with Valeant for discounts, rather than get them automatically.
"Despite their promises to Congress, we've seen no reduction in cost nor any improvement in communication," said Scott Knoer, chief pharmacy officer at the Cleveland Clinic. Knoer said his organization contacted Valeant repeatedly about a discount and didn't have their calls returned.
Bloomberg contacted 23 hospital systems and purchasing groups selected from lists of the U.S.' biggest or top-rated hospitals -- ranging from regional chains to medical centers such as the Cleveland Clinic.
Eleven of the hospitals or purchasing groups said they weren't yet getting lower prices on one or both drugs. One large hospital system and one purchasing group said they were getting discounts. Ten others either declined to comment or didn't respond.
In an interview Tuesday, Valeant CEO Joe Papa said that all hospitals were eligible and that he would be surprised if they weren't getting them. In a statement the next day, Valeant, which is based in Laval, Quebec, and run from New Jersey, said that all group purchasing organizations and hospitals were eligible for discounts of 10 percent to 40 percent that were announced in May.
"Everybody has access to that 10 percent, either through the GPO or negotiating directly with us," Papa said in the interview in New York, using the industry's initials for a purchasing group. "The more they use, the more they'd be eligible for additional volume rebates."
Some hospital executives interviewed by Bloomberg expressed confusion or frustration over trying to access the program.
University of Utah Health Care spent $540,000 on Nitropress this year, said Erin Fox, director of the health system's drug information service. That's more than 20 times more than in 2013, she said.
"Valeant is being very consistent about not returning calls and providing zero information on accessing potential discounts," Fox said.
At Johns Hopkins Hospital, a day's therapy of Nitropress costs almost $10,000 on average, up from about $440 a day in 2013, said John Lewin, director of the critical care and surgery pharmacy division.
"We are and have been paying the same high price," he said, adding he's looked at alternatives to Nitropress.
Another hospital found Valeant's offer undesirable. Roy Guharoy, chief pharmacy officer at 141-hospital Ascension Health, said he didn't sign a contract from Valeant because it didn't promise to maintain lower prices on the drugs. Before Valeant bought the drugs and raised their prices, Ascension spent $3.49 million on them in the 12 months through January 2015. In the 12 months after, it spent more than three times as much.
Valeant representatives appeared before the Senate on April 27, when departing CEO Mike Pearson spoke alongside board member and investor Bill Ackman at a hearing by the Special Committee on Aging.
"We have made mistakes," Pearson told lawmakers who questioned the company's price increases. "Valeant was too aggressive."
Ackman, whose investment firm Pershing Square Capital Management LP is one of Valeant's biggest shareholders, joined Valeant's board in March.
"My recommendation is going to be that we reduce the prices of those drugs," Ackman said at the hearing.
Through a spokesman, Ackman declined to comment.
The two organizations Bloomberg contacted that were getting discounts included a purchasing group and a hospital chain.
Premier Inc., which negotiates on behalf of 3,750 U.S. hospitals and 130,000 other health care providers, said it's getting percentage discounts in the mid-teens, on average, and more of its members are getting discounts than before the May program was unveiled. Catholic Health Initiatives, a Colorado-based nonprofit health system that operates more than 100 hospitals, said it began receiving discounts July 1, adding that further details were proprietary.
Nitropress is used to treat hypertensive crisis -- when a patient's blood pressure dramatically and dangerously rises. Its rapid action is critical, Lewin said. Isuprel is used to support patients' circulation during surgery or to perform diagnostic tests.
"There's no other injectable drug that works like that," Lewin said of Isuprel, adding that other drugs may have unwanted side effects.
Papa said discounts for the two drugs may rise as the program is expanded, and cheaper competing versions of the drugs will come to market by the end of next year.
In the meantime, Roger Neal of Duncan Regional Hospital in Oklahoma said he isn't holding his breath. The executive says he's "scoured the globe" for a cheaper version of Nitropress, after not being offered the discounts.
"We've communicated with them. We communicated through our suppliers," he said of Valeant. "We try to do everything we can, but we've really not had any success."
Business on 09/17/2016