A failed Valeant battlecry: ‘We’re not like Turing in any way, shape or form’

Prior to purchasing a pair of important heart drugs used by hospitals, Valeant Pharmaceuticals closely studied the possibilities for large price hikes and the ability of the marketplace to sustain them, according to more than 800 pages of documents released during the weekend by a Senate committee.

And to further justify its decision to jack up the prices after acquiring these medicines, Valeant relied on market research data showing most large hospital systems did not seem to react to large price hikes taken by the company that previously owned the medicines.

Valeant purchased the drugs, Nitropress and Isuprel, in February 2015 from Marathon Pharmaceuticals, and on the same day raised the prices by 525 percent and 212 percent, respectively. Some hospitals soon complained, though, triggering a wave of negative publicity over Valeant pricing tactics.

Prior to the acquisition, Valeant analyzed the pricing possibilities — along with concerns about future generic competition. One consulting report listed historical pricing for both drugs and noted that “inpatient (hospital) products are subject to significant price scrutiny.” But the same report highlighted that “clinical value … significantly contributes to flexibility in the price of the product.”

The documents — which contain presentations from consultants, internal emails and financial projections, among other things — include various attempts at damage control that Valeant took prior to congressional hearings last year.

For instance, a draft list of talking points about pricing policies claimed that “on the vast majority of products, we take no annual price increases.” But this was later stricken from the talking points along with other statements that appeared to discuss what was good for Valeant, rather than “what is good for society,” as one consultant noted.

Interestingly, the talking points include a few pages in which Valeant hoped to make the case that the company was “not remotely like Turing in any way shape or form.” The memo referred to Turing Pharmaceuticals, which was run at the time by Martin Shkreli.

Just as Valeant ran into trouble with investors over its accounting practices and its relationship with a mail-order pharmacy, Shkreli raised the price of a life-saving drug by roughly 5,000 percent, to $750  a tablet. His move further inflamed outrage over drug pricing.

A spokesman for Valeant declined to comment.