There was little fanfare in the business world earlier this year when Valeant Pharmaceuticals International acquired the rights to two drugs made by Marathon Pharmaceuticals. However what happened after that acquisition is raising serious concern.
With the deal, Valeant gained the rights to a pair of lifesaving heart drugs, Nitropress and Isuprel. The Wall Street Journal reported that on the same day bought the rights to these heart drugs, their list prices rose by 525% and 212% respectively.
The standard explanation from Big Pharma with regards to high drug costs has always been that they are directly related to the extreme costs involved in research, development, and bringing new drugs to market. But in the case of Nitropress and Isuprel, Valeant wasn’t involved in the R&D phase – they simply acquired the rights to two drugs. When the jaw-dropping price increases for the drugs was announced, the only thing that had changed was the name of the company who owned them.
But what I find most disturbing about all this was summed up by Valeant spokeswoman Laurie Little, who responded when asked about the price increases, “Our duty is to our shareholders and to maximize the value” of the products that Valeant sells.
Put simply Ms. Little made it strikingly clear that the first priority of Valeant Pharmaceuticals International is not the patients they serve. She neglected the usual Big Pharma moral gymnastics or any concerns about the patients who depend on these drugs for their lives and simply admitted what I have suspected all along, it is all about profit.
Witness that after Valeant acquired the rights to the two drugs the list price of a one-milliliter vial of Isuprel, a treatment for abnormal heart rhythms, jumped to $1,346.62, up from $215.46. Meantime, a two-milliliter vial of Nitropress, which combats dangerously high blood pressure and acute heart failure, increased from $257.80 to $805.61.
Witness also that as I write this the share price for Valeant has reached a lifetime high.
The real world implications of these price increases are exacting. In the Wall Street Journal report the Cleveland Clinic revealed that price increases for Nitropress and Isuprel is unexpectedly adding $8.6 million, or 7%, to this year’s budget of roughly $122 million for medicines administered at its hospitals.
According to drug-benefits manager Express Scripts Holding Co. Needham & Co., since 2008, branded-drug prices have increased 127%, compared with an 11% rise in the consumer price index. In a June 2014 research letter it was noted there were as many as 50% drug-price increases during the previous 2½ years as there were in the prior decade.
Did those increases represent increases in delivering the drugs to market? Probably not. Did they, as Valeant spokeswoman Laurie Little articulated, maximize profits for shareholders?