Valeant's Interim CEO to Seek Change to Rules for Prescription Assistance

Howard Schiller, interim chief executive of Valeant Pharmaceuticals International Inc., is expected to urge House lawmakers Thursday to rewrite rules that make it illegal for drug companies to help Medicare patients pay the out-of-pocket costs of their prescriptions.

Such assistance for patients in Medicare and other government-funded health-care programs is considered an illegal kickback under federal law, so drug companies limit offering the help only to patients who are commercially insured.

Mr. Schiller, in remarks prepared for his testimony before the House Committee on Oversight and Government Reform on Thursday, said the rules prevent companies from helping "some of the patients with the most acute need for assistance. We encourage Congress to re-examine this policy and consider whether changes are warranted."

He added that Valeant estimates it spent more than $630 million helping patients afford copays and other patient assistance last year, and forecasts it will spend $1 billion this year.

Valeant provided some of the help through a mail-order pharmacy called Philidor Rx Services LLC, before the drug company cut ties amid controversy over the aggressive tactics the pharmacy used to make sure insurers paid for pricey Valeant drugs. To replace Philidor, Valeant is now joining with Walgreens Boots Alliance Inc.

The Oversight committee hearing is exploring large price increases for drugs and obstacles to the timely approval of lower-priced generic medicines.

The committee subpoenaed Martin Shkreli, the former CEO of Turing Pharmaceuticals AG when it bought the U.S. rights to an anti-parasite drug called Daraprim and increased its price more than 50-fold. Mr. Shkreli resigned as Turing CEO after his arrest on securities fraud charges, which he denies.

Benjamin Brafman, Mr. Shkreli's new lawyer, said Thursday that if the former CEO did attend the hearing, he would invoke his Fifth Amendment privilege against incriminating himself and wouldn't answer questions.

Valeant raised the prices of two cardiac-care drugs, Nitropress and Isuprel, by 212% and 525% after acquiring the rights to sell them last year. Valeant increased the prices to meet sales goals for the drugs, according to a memo briefing the committee's Democrats for the hearing.

Mr. Schiller said in his prepared remarks that the market was already responding to the price increases in ways that would reduce spending. Nitropress and Isuprel sales have fallen by about 30% each as hospitals use other medicines, according to his remarks. And Valeant expects generic alternatives, whose development was sparked earlier price increases, "could be approved within the next year or two," he said in his prepared remarks.

Write to Jonathan D. Rockoff at [e-mail]

(END) Dow Jones Newswires

February 03, 2016 18:15 ET (23:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.