Market Insider

Valeant falls after NYT reports broken drug promise

Getty Images

Shares of Valeant fell more than 5 percent Thursday after the New York Times reported the company has not kept the discount promises it made to Congress.

The pharmaceutical company told the House Committee on Oversight and Government Reform in February that it would cut as much as 30 percent off the drug prices. But according to the Times, many U.S. clinics are still waiting.

"I think we definitely would be among the top users," Scott Knoer, the chief pharmacy officer at the Cleveland Clinic told the Times, referring to the drugs Nitropress and Isuprel. "I would assume we would be on that list."

Warren Buffett and Bill Ackman
Ackman responds to Buffett: You don't indict Valeant on actions of a few people
Most want drug ads off TV, oppose faster approvals

Source: FactSet

The two drugs' prices went up significantly after Valeant acquired them last year. According to the Times, Cleveland Clinic spent more than $5.3 million on the drugs last year. The report cites similar situations at Johns Hopkins, Mayo Clinic and New York Presbyterian, where administrators told the Times that nothing had changed since Valeant's CEO vowed to look into claims that not a single hospital had received discounts.

Valeant was supposed to offer discounts through two companies that negotiate prices on behalf of hospitals, the Times reported. Yet, one of the companies, Premier, told the Times discounts were "minimal to nonexistent," and only two out of 2,500 affiliated hospitals had received these discounts.

The company's stock is down more than 75 percent this year. Shares of Valeant traded around $25 Thursday, down from their 52-week high of $263.81.