Valeant Pharmaceuticals’ price spikes aren’t isolated to four drugs, but is the company’s business model, a top senator said Wednesday.
The drugmaker was contrite about raising the price of four drugs by in some cases up to 6,000 percent, with the outgoing CEO telling a Senate panel that the company was too aggressive.
But Sen. Claire McCaskill, D-Mo., accused Valeant of muddying the waters.
“I think it is misleading to act as if this is a problem with four drugs. This is the business model,” she said during a hearing of the Senate Special Committee on Aging on Thursday.
Valeant has been criticized for acquiring several older generic drugs and then raising the price. Since the drugs are older and have lower patient populations, there is little to no competition.
McCaskill said Valeant’s model wasn’t just isolated to the four drugs that were the basis of the hearing: Isuprel, Nitropress, Cuprimine and Syprine.
“Can you find me one drug that Valeant didn’t raise the price on?” McCaskill demanded.
J. Michael Pearson, Valeant’s outgoing CEO, said he couldn’t think of any in the U.S. The drugmaker’s chief financial officer, Howard Schiller, said it didn’t raise the price of one of the drugs it got after acquiring the company Salix.
McCaskill said the company has stated its revenue has been driven primarily by price increases and not by selling more drugs.
“Pricing has driven more growth than volume, although that has been changing over time,” Pearson said.
Pearson admitted that it was a mistake to buy companies that manufacture older generic drugs as the main reason for such acquisitions was to raise the price of those products.
He will leave Valeant in a few weeks as a new CEO takes over. The company’s board pushed Pearson out after the company’s stock price dropped, fueled by scrutiny of the high prices and ties to a specialty pharmacy called Phildor.
Activist investor and Valeant board member William Ackman said pricing would be top of mind during a board meeting on Thursday.
Ackman was also under fire from McCaskill for investing billions in the company earlier this year and didn’t know about the high drug prices.
“One of the issues with due diligence is it is very hard to find out the prices for drugs because drug prices are negotiated with payers,” he said.
