Karma-ceutical Payback Time for Valeant

By Josh Bloom — Dec 15, 2015
Valeant Pharmaceuticals, a generic drug firm with a reputation far from sterling, is hurting from a nasty billion dollar payback. It incinerated that investment by purchasing "female viagra" a drug that should have never been approved, and no one is buying. Execs are probably not amused, but we sure are.

Screenshot 2015-12-15 15.02.37The executives who run Quebec-based Valeant Pharmaceuticals are probably thanking some deity or other that Martin Shkreli, the founder and CEO of the now-infamous Turing Pharmaceuticals, is in the news.

If not for Shkreli, possibly America's most despised man in the medical community for his predatory business practices, Valeant would be in the spotlight even more so than now, which is plenty. In this case, "plenty" means being in the crosshairs of Sen. Claire McCaskill (D-MO), which is not a pleasant place to be. (Perhaps no one understands this better than Dr. Oz, who looked like he had been run over by the bulls of Pamplona after McCaskill relentlessly grilled him about selling useless weight loss supplements on his show.)

Last month, Sen. McCaskill, along with Sen. Susan Collins (R-ME) began hearings on "dramatic increases [in prices] that looked like little more than price gouging." The Senators sent letters to four generic drug companies requesting documentation about recent, steep price hikes of a number of drugs. Turing and Valeant were two of the four companies.

Valeant, which is little more than a parasite whose business plan is, according to New York Times columnist Joe Nocera, to "acquire pharmaceutical companies, fire most of their scientists and jack up the price of their drugs," found itself in the hot seat. So much so that last week it hired a lawyer and crisis management firm to deal with its mess.

However this plays out, the company will be stuck with another problem of their own making it recently threw away a billion dollars when it bought flibanserin (trade name Addyi), the so-called "female Viagra," from Sprout Pharmaceuticals. Sprout had itself been formed solely to push flibanserin through the FDA, which had already rejected it unanimously in 2010, when its inventor, the German pharmaceutical giant Boehringer Ingelheim, tried to get it approved for "hypoactive sexual desire disorder." The problem was that if it worked at all (which is debatable), the side effects, which were not trivial, clearly outweighed the benefits.

Sprout didn't fare much better. In 2013 the FDA rejected the company's application for approval, again unanimously. But, Sprout co-founder Cindy Whitehead had a few tricks up her sleeve. She hired several women's rights groups to lobby the FDA under the premise that it was "unfair" that there were "26 drugs" for sexual (erectile) dysfunction for men (the real number is four), but none for women (!), which was de facto proof that the FDA was sexist an argument that I thoroughly dismantled at the time.

Eventually, the FDA caved anyway, and approved flibanserin in August 2015. One day later, Valeant bought Sprout for $1 billion.

How is that working out for them? Not so well something I could have told them almost two years ago, when the first charges of sexism were made. You can't turn a lousy drug into a good one just by lobbying.

As of mid-November, a grand total of 227 prescriptions for Addyi had been filled. At this rate, it will take Valeant about 2,000 years to recover its investment. I am not the only one who is amused by this. Cindy Whitehead is laughing all the way to the bank.

Karma-ceuticals. In this case, bad karma for this pharmaceutical company, well-deserved.

Josh Bloom

Director of Chemical and Pharmaceutical Science

Dr. Josh Bloom, the Director of Chemical and Pharmaceutical Science, comes from the world of drug discovery, where he did research for more than 20 years. He holds a Ph.D. in chemistry.

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