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Shadowed by nearly $30B in debt, Valeant’s $50M guidance raise looks pretty paltry
Faced with a crippling pile of debt, Valeant on Tuesday slightly increased its 2017 earnings guidance, one small positive development as it works to rebound from its noted downfall. The Canadian drugmaker reported first-quarter revenues of $2.11 billion on Tuesday, missing FactSet consensus estimates of $2.19. But the company sees things going well enough to increase its 2017 earnings guidance to between $3.6 and $3.75 billion, slightly increased from a previous range of $3.55 billion to $3.7 billion. The move triggered a 20% run-up in share price by mid-morning Tuesday, but at least one analyst urged caution. Wells Fargo’s David Maris pointed out that “that the $50 million raise is relative to approximately $28.88 billion of total debt.”
Sanofi vows to limit 2017 price hikes to 5.4% as part of new policy
Sanofi may be late to the pricing-pledge party, but it’s come up with some benchmarks that could have other drugmakers defending their own. Rather than limiting price hikes to less than 10%, the French drugmaker promises to keep any price increases at or below an official health inflation measure that’s projected to hit 5.4% in 2017. The company will also report numbers on its aggregate price increases annually, disclosing hikes to gross prices and net prices, which reflect rebates and discounts granted to payers. Sanofi’s policy follows more than a year of intense scrutiny on pharma pricing in the U.S. as high-profile hikes turned a spotlight on the entire industry. Prompted by leaps in the cost of Mylan’s EpiPen, a set of Valeant Pharmaceuticals’ bought-in drugs, and, notoriously, a massive price hike on Daraprim engineered by then-Turing Pharmaceuticals CEO Martin Shkreli.
Top pharma team with Express Scripts to gin up savings for cash-paying patients
As pharmacy benefit managers and drug makers continue to clash over their respective roles in controversial drug-price hikes, eight top pharmas and leading PBM Express Scripts have teamed up to offer cheaper meds to patients forced to pay cash for their prescriptions. Through a collaboration that comprises drug companies, Express Scripts, 40,000 pharmacies and tech partner GoodRx, the program is designed to make drugs affordable for patients with high-deductible insurance plans, or no insurance at all. The effort could help quell public outcry over drug pricing by limiting the hit to patients’ pocketbooks. For instance, Mylan’s EpiPen pricing scandal hit after parents buying back-to-school EpiPens faced big increases in their out-of-pocket costs—and those parents took to social media to air their grievances. So far, the Inside Rx program has attracted a who’s who among drugmakers, mostly weighted toward those headquartered outside the U.S.
PhRMA expels 22 members with new R&D rules as it works to burnish its image
Industry lobbying group PhRMA has cleared its decks of nearly two dozen members as it tries to distance itself from those companies most likely to catch heat over drug pricing practices. While not all of those who were dropped have price-pushing reputations, the practices of some are particularly notorious for their methods. The organization did this with new bylaws that mandate members meet minimum R&D investment requirements, a move that was expected to force out smaller companies whose business model is built more on buying drugs and then jacking up prices significantly. The move comes as the lobbying group works to portray its membership as serious drugmakers that are investing heavily in innovative new medications.