Amid increased scrutiny of recent drug price hikes from lawmakers and regulators, Valeant Pharmaceuticals announced Tuesday plans to lower prices on some of its prescription drugs this year.
By the end of 2016, the company will be making some of its branded drugs available to consumers at generic prices, for an average of 50 percent less than the current price. The agreement will cover more than 8,000 Walgreens and independent pharmacies and could amount to more than $600 million in price cuts in total.
The move comes amid growing public outcry over Valeant’s pricing practices. Online investment research company Citron Research has called Valeant the “pharmaceutical Enron.” The controversy over Valeant’s business model and practices has pushed company share prices down 75 percent.
“We have listened to what the marketplace is saying, and we’ve taken positive steps to respond,” J. Michael Pearson, Valeant Chairman and CEO said in a statement.
The agreement helped quell concerns about how Valent would make up revenue after cutting ties with mail-order pharmacy Philidor Rx Services, amid accusations about the relationship between the two companies.
Valeant’s stock price shot up by 10 percent after Tuesday’s news, as investors cheered the ‘credibility boost’ that came with the news.
Prescription drug pricing has become a hot-button election issue, with Hillary Clinton and Donald Trump both criticizing Turing Pharmaceuticals for raising the price of a long-standing drug used to treat AIDS and cancer patients by 5,000 percent.
In 2013, Americans spent more than $260 billion, or 9 percent of all health care dollars, on prescription drugs.