As Valeant Pharmaceuticals (VRX) strives to reinvent its corporate image as a patient-first drugmaker, its new CEO, Joseph Papa, announced Monday that the company will expand discounts on certain products.
Shareholders of the Canadian drugmaker have fled in droves this year -- pulling shares down 75% after the company found itself embroiled in both SEC and Congressional investigations into its bookkeeping and drug-pricing practices.
On Monday, Papa said in a statement that all hospitals are now eligible for 10% rebates -- and in some cases, 40% rebates -- on two of its flagship products, Nitropress and Isuprel.
The news comes after controversy surrounding Valeant price hikes on some of its drugs was rekindled last week, after a New York Times report criticized the company for failing to follow through on discount promises to the Cleveland Clinic, one of the country's foremost hospitals for cardiac care.
"Under this new program, the discounts we previously implemented for Nitropress and Isuprel will be simplified and more accessible," Papa said in a Monday statement. "I understand the concerns our partners in the health care community have had about the pricing of these drugs, and we want to ensure hospitals and patients can get the drugs they need."
Valeant has been working hard to undo the damage done to its reputation and share price on the back of predatory pricing allegations. Most recently, Valeant's departing CEO, Michael Pearson, appeared at the Senate Special Committee on Aging last month to, among other things, apologize for having said he prized shareholder interests above patient and hospital concerns.
"I also want to thank the Senate Committee on Aging and the House Committee on Oversight and Government Reform for the attention they have brought to this issue, and specifically to gaps they identified in the previous program," Papa added Monday. "We are committed to getting this right."
Valeant's management reshuffle has also included new faces on the board, such as billionaire activist Bill Ackman. Ackman's Pershing Square hedge fund maintains a 9% equity stake in Valeant, and its vice chairman Stephen Fraidin was also recently named to Valeant's board.
"It will take time for Valeant to regain its stakeholders' trust," Ackman said in a letter to Pershing shareholders last week. "We believe that this will occur over time, as the company delivers several new quarters of results and continues to fulfill its commitments to shareholders, patients, doctors, and the community at large."
Valeant has also been leveled by probes into accounting practices in relation to its former partnership with mail-order pharmacy Philidor, to which the company has admitted to at least $58 million of improperly booked sales. This led to a delay of its 10-K filing with the SEC, resulting in a temporary standoff with creditors before Valeant ultimately filed its annual statement last month.
