Valeant Pharmaceuticals International Inc. announced today that it is selling its products at a discount to the largest drug retail chain in the U.S.
“We have listened to what the marketplace is saying and we’ve taken positive steps to respond. We are pleased to announce both a strategic fulfillment agreement with Walgreens, as well as a new agreement to offer innovator products at generic prices, which is good for consumers, good for physicians and good for the healthcare system,” said J. Michael Pearson, chairman and chief executive officer of Valeant. “Our goal is to create a system that allows prescription medications to be dispensed and insurance claims adjudicated in an efficient manner while allowing physicians to focus their efforts on what matters most: patient care.”
By entering a 20-year agreement with Walgreens Boots Alliance Inc., to reduce wholesale prices by 10 per cent for all dermatological and ophthalmological products and sell certain branded drugs at generic prices with an average discount of more than 50 per cent, Valeant has regained some of its street credibility back.
The agreement with Walgreens is designed to create a more efficient model to help lower costs while ensuring patients have convenient access to the products their doctors prescribe in direct response to challenges to Valeant’s pricing model. Valeant expects the price decreases, when fully implemented, will provide up to $600 million in annual savings to the U.S. healthcare system.
Valeant rallied today, closing up 15.87% as short sellers were caught off guard by this announcements.