Valeant heart drug discounts haven’t materialized, hospitals say

(Bloomberg) — Months after Valeant Pharmaceuticals International 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.

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Bloomberg contacted 23 hospital systems and purchasing groups selected from lists of the U.S.’s biggest or top-rated hospitals — ranging from regional chains to famed centers like 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.

Range of problems

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 acronym for a purchasing group. “The more they use, the more they’d be eligible for additional volume rebates.”

Discount struggle

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 he’s looked at alternatives to Nitropress.

Contract concerns

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 of 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 Chief Executive Officer 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.”