Robert Ingram, the interim Chairman and Howard Schiller, the interim CEO of Valeant Pharmaceuticals International wrote an op-ed indicating that the extraordinary challenges and the experience make the company better.
Valeant Pharmaceuticals was accused of using the pharmacies to create fraudulent sales and inflate its growth rate by Citron Research and criticized by its peers in the industry. The company is also confronting intense public scrutiny in connection with the issue on drug price gouging.
It is one of the companies requested to appear in a Congressional inquiry focused on the sudden and significant price increases for certain prescription drugs.
Ingram and Schiller described the challenges confronting Valeant Pharmaceuticals as extraordinary. The problems cause the stock price of the company to plummet 70% over the past several months before partially recovering.
Valeant grew rapidly over the last seven years
Ingram and Schiller noted that the company experienced rapid growth over the past seven years. The company expanded from being a small sleepy business to a company with more than $10 billion in sales in 100 countries.
“Along the way, we’ve often challenged industry convention. Partly because of that, we’ve earned our share of criticism. Some of that have been deserved, but much of it relies on misperceptions about who we are,” according to them.
Valeant Pharmaceuticals made big acquisitions, which prompted some to call the company a “hedge fund.”
The executives wrote, “Nothing could be further from the truth. Valeant today is a multinational pharmaceutical company with strong organic growth, 21,000 employees, and 16 U.S. manufacturing facilities. In the U.S., we are a dermatology, gastrointestinal, ophthalmology and consumer health-care company.”
Ingram and Schiller also stated that Valeant Pharmaceutical is making a huge investment in research and development, employing scientists, doctors, and other researchers in high-paying jobs. According to them, the company has 200 active R&D programs.
Over the past two years, the company 41 new prescription drugs, generic drugs and medical devices in the United States. Valeant Pharmaceuticals will spend 8% of its revenue in the United States on R&D this year.
Ingram and Schiller said the company als0 supports R&D through our acquisitions, creating a flow of capital to small startups and encouraging research, risk-taking and innovation. According to them, such strategy “supercharged the tech industry in recent years.” They also noted that many of their competitors in the pharmaceutical industry are practicing the same model.
Valeant made several changes
Ingram and Schiller said they have the responsibility to correct misconceptions about Valeant Pharmaceuticals, but they must also listen and respond to criticisms when appropriate.
The executives said they were making changes in how they operate in several areas. They cited the company’s new partnership with Walgreens as an example to the changes they are implementing.
Under the partnership, Walgreens will deliver some of Valeant Pharmaceuticals’ most popular prescription drugs to patients at lower prices.
Additionally, the company also decided to start offering many of its branded drugs at generic prices. The move will decrease the prices for those drugs by an average of 50% and in some cases 95%.
Furthermore, Valeant Pharmaceuticals started offering volume-based discounts for its hospital-administered drugs including Nitropress and Isuprel. The company is offering discounts up to 30 percent. It is also increasing its investment in patient co-pay programs to lower the out-of-pocket costs for patients to get the drugs they need.
“We have not gotten everything right. But our model is succeeding in meeting our core mission – speeding up the delivery of innovative products to the doctors who prescribe them and the patients who need them. Our job now is to maintain our commitment to patients, correct our missteps, and move this company forward,” said Ingram and Schiller.