Valeant Cuts Ties With Pharmacy That Distributed Antidepressantby
Drugmaker says it began cutting ties earlier this year
Pharmacy helped up Wellbutrin XL sales, Bloomberg has reported
Valeant Pharmaceuticals International Inc. is ending its relationship with a mail-order pharmacy helped sell one of several older drugs it has acquired and raised prices on.
The pharmacy, Direct Success Inc., was used by Valeant to distribute the antidepressant Wellbutrin XL. Valeant, in a statement, confirmed the end of the relationship, although it said the pharmacy only handled about 5 percent of the sales of the product last year. The change was first noted by David Maris, an analyst with Wells Fargo & Co.
“Valeant ceased the marketing relationship with this distributor and stopped seeking to enroll new patients in the program in mid-2016 as we began directing new and existing patients into our larger, consolidated partnerships,” the company said in an e-mailed statement Monday.
Wellbutrin XL is Valeant’s second-biggest selling product, the company said in an August presentation, even though cheaper generic copies became available about a decade ago, according to Maris. Direct Success didn’t return calls seeking comment. Valeant is based in Laval, Quebec, but operates out of New Jersey.
Valeant increased the list price of the pill 11 times in two years to $17,000 annually by the beginning of 2016, according to data compiled Bloomberg. Dollar sales kept climbing even as the number of prescriptions filled declined, in part thanks to an arrangement with Farmingdale, New Jersey-based Direct Success. The deal made Wellbutrin XL available through lower co-pays, or even free, while doctors were promised that prescriptions would be honored without any problems, Bloomberg News reported in January.
Maris said he decided to look into the Direct Success arrangement after Valeant Chief Executive Officer Joe Papa said at an investor conference hosted by Wells Fargo last month that he wasn’t familiar with the pharmacy when asked about the relationship.
“I’m going to be 100% clear, in my four months that name, Direct Success, has not come to me, so I don’t know the answer to that question,” Papa said, according to the transcript.
Maris called the company’s strategy around Wellbutrin “unsustainable” in a note to investors Monday. The analyst, who rates the shares the equivalent of sell, lowered his sales forecast for the treatment. Valeant, which declined to comment on Maris’s note, will report third-quarter earnings on Nov. 8.
Specialty and mail-order pharmacies usually handle expensive drugs for complex diseases such as cancer or multiple sclerosis. Last year, Valeant severed its relationship with another pharmacy, now-defunct Philidor Rx Services LLC, after Philidor’s business practices raised criticism. Federal prosecutors are now investigating whether Philidor made false statements to insurers about its ties to Valeant, the Wall Street Journal reported.
Valeant, once the darling of Wall Street, became the symbol of outrage over high drug prices in the U.S., triggering a stock slide of more than 90 percent since its August 2015 peak. Since taking over, Papa has been trying to sell off assets to help pay down debt, a sharp reversal in strategy from his predecessor, who built revenue through acquisitions and price hikes. The company will post third-quarter earnings Nov. 8.