Stung by criticism that it jacked up the price of lifesaving medicines, Valeant Pharmaceuticals said Tuesday that it would lower some prices through an agreement with Walgreens, the nation's largest pharmacy retailer.
Valeant said its "fulfillment agreement" would cut prices by 10 percent on all skin and eye medicines, and by more than 50 percent on some other branded drugs that have generics available. The lower prices will be phased in over six to nine months, said Valeant, based in Laval, Quebec.
"We have listened to what the marketplace is saying, and we've taken positive steps to respond," said J. Michael Pearson, chief executive of Valeant.
The company has been under pressure over how it prices drugs and its relationships with mail-order pharmacies such as Hatboro-based Philidor Rx Services, which specialized in helping doctors and patients get access to Valeant drugs even when insurers declined to cover them.
In late October, Valeant said it cut ties with Philidor, which subsequently moved to shut down its business.
Valeant also caused a furor by sharply increasing prices for heart drugs shortly after buying them from Marathon Pharmaceuticals of Chicago. Valeant raised the price of Nitropress by more than 200 percent and the price of Isupril by more than 500 percent.
Those kinds of sharp increases by Valeant and other drugmakers have come under intense scrutiny in Congress. Last week, the Senate Special Committee on Aging held a hearing on drug prices.
That kind of attention is pressuring the pharmaceutical industry to defend its prices or denounce drugmakers that have pushed through extraordinarily high price increases.
Valeant is known for spending little on its own drug development. Last year, the company spent 3 percent of revenue on research and development, far below the industry average of 18 percent. The company said in October that it would double its research spending next year.
Valeant said its 20-year agreement would allow customers to buy certain products at lower out-of-pocket costs from more than 8,000 Walgreens stores, as well as an unspecified number of participating independent retailers. The arrangement will take effect early next year and will initially cover Valeant's dermatology products, including Jublia, Luzu, and Solodyn, and eye products, including Besivance and Lotemax.
"Valeant and Walgreens hope to expand the relationship to include other therapeutic areas over time," the two companies said in a statement.
The companies also entered into a separate agreement under which Valeant will sell more than 30 branded products, where generics are available from other companies, through Walgreens at generic prices. Those products include medicines for dermatology, ophthalmology, gastrointestinal, and neurology treatments.
Valeant said it expected the price decreases to provide up to $600 million in annual savings to the health care system.