Last February, a Canadian drug company bought the rights to two life-saving heart medications. That very day, Feb. 10, the price of those drugs, Isuprel and Nitropress, increased by 525 per cent and 212 per cent, respectively.
Meet Valeant Pharmaceuticals, the Laval, Que.-based owner of Isuprel and Nitropress and “poster boy” behind a rapid acceleration in costs for several prescription drugs in North America and elsewhere, according to experts.
“Our duty is to our shareholders and to maximize the value” of the products that Valeant sells, Laurie Little, a company spokeswoman told wsj.com last spring. “Sometimes pricing comes into it, sometimes volume comes into it.”
Valeant didn’t respond to requests for comment from Global News.
In recent years, research suggests pricing has frequently come into the equation at Valeant.
Since 2011, the Quebec company has raised the cost of drugs paid by insurance companies, government drug plans and patients who must pay out-of-pocket by at least 20 per cent 122 times on the fast-growing list of products it owns or has acquired, according to Needham & Co., a researcher.
Over that time, Valeant’s stock price has climbed 678 per cent, to $220 a share, making it one of the most valuable companies in Canada.
But now, what’s been an impressive run has been at least temporarily disrupted as Valeant’s business practices fall under new scrutiny.
Valeant’s aggressive pricing practices have come under fresh focus in the United States following revelations last week that Turing Pharmaceuticals, an upstart firm that acquired a drug to treat life-threatening infections, took practices refined at Valeant several steps further — raising the price of that drug, Daraprim, by 5,000 per cent.
The move triggered outrage among health professionals, and renewed criticism from U.S. politicians. On Monday, Democrats moved to force Valeant, through a subpoena request, to disclose documents about its pricing decisions. Democrats also requested Valeant CEO Michael Pearson testify before a Congressional house committee.
“Valeant again plays poster boy for big bad pharma,” stock experts at Canaccord Genuity said in a research note Tuesday. “While there has been discussion regarding pricing controls in the U.S. before, we do not believe there is anything imminent.”
Sharp increases on the price of certain drugs in recent years haven’t been exclusive to the United States, said Amir Attaran, a law professor and expert of human rights law and public health at the University of Ottawa.
Provinces set price caps on prescription drugs but in some cases, companies are able to price drugs at whatever they want, experts say. “Governments, including Canada’s, have not been very attuned to this problem,” Attaran said.
Though the price spikes have affected ‘specialty’ drugs that aren’t widely prescribed, according to experts, there’s growing concern among Canadian health professionals that affordable access to these and other potentially life-saving medications is increasingly at risk.
Pharmaceutical firms facing criticism have argued the price hikes allow them to reinvest profits into research and development. But that assertion, which was put forth by Turing last week, has been blasted by critics. “Turing Pharmaceuticals doesn’t have a lab that anybody knows about,” Prof. Attaran said.
Valeant has it’s own research and development programs, but in a Sept. 25 research note, RBC stock analysts said Valeant efforts in the area of developing or improving drugs are “lean.” Instead, Valeant’s primary focus is on acquiring companies and their medications to grow.
“When you get the pharmaceutical industry to do what it’s supposed to do, it has transformed our lives and made our lives so much better, extending life spans by decades,” Prof. Attaran said.
“But then you have the Turing Pharmaceuticals—enabled by others— that are turning this on its head. They’re attacking a system that has served everyone you know, your family, your friends.”
WATCH: Price of drug Daraprim surges.