Clinton hits Valeant price hikes with new adNews added by Benefits Pro on March 8, 2016

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By Erin Moriarty-Siler

Democratic presidential candidate Hillary Clinton hit hard against pharmaceutical companies with “predatory pricing,” setting her sights specifically on Canadian company Valeant.

Valeant is no stranger to disapproval about its price hikes, and just last week, it was announced they are currently the target of a Securities Exchange Commission (SEC) investigation. The company has denied any wrongdoing when it comes to price gouging related to its medication.

Clinton’s criticism comes in the form of a new campaign ad on her YouTube page where she pledges to wholeheartedly attack Valeant. The highlight of the ad is a personal anecdote from one woman who says she has been prescribed a brand name medication which retailed at $180 for 10 shots when she started taking it in the 1980s. Now, the ad claims, the price for the same prescription has skyrocketed to $14,700. The company in question? Valeant.

Valeant replied, saying it had contacted the patient featured in Clinton’s ad. “She informed us that her insurance provider covers the drug, so it is not a significant out-of-pocket expenditure for her,” the company said in a statement. Valeant also claimed it offered payment assistance to the woman in the ad, but she declined.

Valeant quickly named the medication — which wasn’t mentioned in the ad spot — and some digging by Fortune showed the Clinton’s argument may not hold much water. A quick search of the drug, D.H.E 45, shows that it is actually offered at Walmart for less than its 1980s price tag — just $104 for 10 shots. The drug is also available in a generic form through a separate manufacturer, Perrigo, meaning the patient in Clinton’s ad has the choice to opt out of the higher priced name brand medication.

The point of generic versus name brand medication brings us to the discrepancy Clinton’s ad poses. Although it doesn’t always play out like this, most of the medications affected by price increases are off-patent, which means competitors can offer generic drugs that can significantly lower the cost. So price hikes from companies like Valeant and Martin Shkreli’s Turing Pharmaceuticals might actually be counteracted by the generic medication market. That said, investigations continue to hone in on the price increase for drugs without generic alternatives.

With the market shifting toward acceptance of generics over name brands, it’s possible the impact of Big Pharma price gouging could be limited. Fortune says some health plans and employers are looking to pharmacy benefit managers (PBM) to control the medications accepted by insurance plans, often eliminating high-priced drugs. CVS Health, one of those groups, said prescription drug hyperinflation accounted for less than 0.7 percent of overall cost growth for its PBM clients. Part of its success comes from not offering some of Valeant’s higher cost medications that have generic options.

Still, Clinton’s condemnation of Valeant isn’t completely off-base. According to Fortune, the company said that when generic competitors come into play, prices of the Valeant name brand drug surge in order to “keep production of the drug viable.” But, even without the presence of a generic offering, Valeant still ups the price. Last year, the company bought Nitropress, an off-patent heart drug with no generic option, and immediately raised the price by 525 percent. The move resulted in a Congressional subpoena and comparison to Shkreli, according to the Wall Street Journal and Bloomberg.

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