Valeant (VRX) Stock Falls, Hospitals Claim Prices Remain Too High
NEW YORK (TheStreet) -- Valeant Pharmaceuticals (VRX) stock is declining 4.86% to $25.07 in early-afternoon trading on Thursday, as several large hospitals have not received drug discounts that the pharmaceutical company pledged at a Senate hearing two weeks ago, the New York Times reports.
Valeant promised Congress price cuts of up to 30% on two of its expensive heart drugs, Nitropress and Isuprel.
The company has claimed that it was offering discounts through two companies that negotiate prices on behalf of hospitals. But one such company, Premier, said the discounts are "minimal to nonexistent," with just two of its 2,500 member hospitals having received the 30% discounts that Valeant offered at the Senate hearing, the Times adds.
Valeant's new CEO Joseph Papa stated that the pricing committee has met and talked about changes to the drugs' discount program.
"What we're now doing is to resolve some of those difficulties that some of the players have experienced," he told the Times. "I now believe we've got a solution to this question, and I look forward to being able to announce this."
In February of last year, Valeant bought the two drugs and immediately increased the price of Nitropress by more than 300% to $881 per vial from $215 per vial. The company upped the price of Isuprel by 718% to $1,472 per vial from $180.
Separately, TheStreet Ratings team rates the stock as a "sell" with a ratings score of D.
Valeant's weaknesses include its deteriorating net income, generally high debt management risk, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.
You can view the full analysis from the report here: VRX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.
