Valeant Pharmaceuticals vowed to consider reducing dramatic price increases for some drugs during a grilling Wednesday by U.S. senators.
Bill Ackman, a major Valeant shareholder who recently joined the drugmaker’s board, said price cuts on four drugs that prompted a congressional investigation will be discussed at a meeting on Thursday.
“My recommendation is going to be that we reduce the prices of those drugs,” he testified in a hearing webcast from Washington, D.C.
“I am committed to ensuring that Valeant implements best practices with respect to drug prices and maintains the company’s social contract with patients and doctors it serves.”
Even with a 30 per cent discount for hospitals, prices on some life-saving drugs would still be thousands of per cent higher than before Valeant (TSX:VRX) acquired them, senators said.
Some senators criticized the Quebec-based company’s business ethics for jacking up prices on drugs soon after acquiring them.
“Valeant’s monopoly model operates at the expense of real people,” said Sen. Susan Collins, chairwoman of the Senate Committee on Aging.
Berna Heyman, a patient with a rare genetic disorder called Wilson’s Disease, testified that the co-pay on her medication increased from $700 per year to more than $10,000. The 30-year-old drug, Syprine, was acquired by Valeant in 2010 and has seen its price increase more than 3,000 per cent.
Collins said documents reviewed by her staff show Valeant already has recouped the purchase costs of four drugs subject to drastic price hikes, including Syprine.
Democratic Sen. Claire McCaskell said executives with ties to Wall Street have driven the adoption of Valeant’s price-hiking business model.
“The notion that we can sit idly by while smart people on Wall Street can do ledger entries to create another layer of profit in the health care sector to benefit multimillionaires on the backs of patients and ultimately taxpayers can’t continue,” McCaskill said.
Skeptical about the company’s statements of regret, she called the company’s price hikes “immoral.”
“It’s using patients as hostages,” she said during the three-hour hearing.
Pearson repeatedly expressed regret for the company’s actions and his own personal failings for leaving the public with the impression that Valeant didn’t consider the impact of its decisions on patients.
“Valeant was too aggressive and I, as its leader, was too aggressive,” he told lawmakers. “I regret pursuing transactions where a central premise was a planned increase in the prices of the medicines.”
Valeant has been under scrutiny amid controversies over soaring drug costs and its relationship with U.S. mail-order pharmacy Philidor, a connection it later severed.
The company announced last month that Pearson was leaving. Joseph Papa, former CEO of Irish drugmaker Perrigo, has been named as his replacement and will begin on Monday.
Pearson also touched on Valeant’s rapid growth during his eight years at the helm, aided by its acquisition of well-known companies that have allowed it to make and market approximately 1,800 products, including more than 200 prescription drugs.
Up until last year, that strategy was considered a resounding success. At one point, Valeant was Canada’s most valuable company as measured by stock market value, with a peak closing stock price of $346.32 on the Toronto Stock Exchange set last August. Its shares have lost nearly 90 per cent of their value since.
— With files from The Associated Press.