Apparently Congressional hearings don’t mean anything to Valeant Pharmaceuticals.
The beleaguered company, which has been under intense scrutiny for its drug price hikes since 2015, again raised prices for over 50 products last week, according to data compiled by Wells Fargo.
From Wells Fargo analyst David Maris:
“On Friday, January 6th, Valeant implemented 95 different price increases across more than 50 products. In our opinion, this is an example of Valeant’s continued reliance on price as a means of growth and may also signal that Valeant’s prescription volumes continue to remain challenged.
“Recall that these price increases come on top of significant price increases — some of them more than 100% — taken on products in previous years and several taken in late 2016. According to data from Medi-Span PriceRx, Valeant had 76 price increases of 9% and its average price increase was approximately 8.4%. The price increases appear to span Valeant’s dermatology, ophthalmology, and gastroenterology portfolios.”
Back in October 2015, accusations of accounting malfeasance from a short seller combined with a lashing from politicians on both sides of the aisle brought Valeant, then a hedge fund favourite, to the brink of collapse.
Since then, its stock has fallen over 90%.
It was a terrible time for the company, and it has yet to recover fully. The drama included the launch of multiple investigations on the federal and state levels, a couple Congressional hearings, and a new CEO. During all of that, the company promised that its business model would no longer rely on price hikes. Instead, it said, growth would be driven by sales volume.
That is why Maris is so sceptical here. Why would a company so closely watched by the government risk aggravating Washington with more of the same behaviour?