Valeant, Walgreens reach deal to cut many drug prices in US

Canadian pharmaceutical company Valeant announced a drug distribution deal with pharmacy giant Walgreens Tuesday that will lower prices of many medications by 10 percent in the US. The deal applies to Valeant's branded dermatology and opthalmology prescription drugs, including the high-selling Jublia treatment for toe fungus. The two companies also announced a separate agreement to make available more than 30 drugs at generic prices when one is available. Prices on affected drugs are expected to fall from five to 95 percent, the companies said. Valeant said the ventures, when fully implemented, could save the health care system up to $600 million annually. It comes on the heels of criticism of Valeant and other drug-makers in the US media and Congress over runaway drug prices. "We have listened to what the marketplace is saying and we've taken positive steps to respond," said Valeant chief executive J. Michael Pearson. Pearson, appearing in an interview with CNBC, said the pact would allow Valeant to sell directly to a major pharmacy chain, bypassing costly middlemen. Analysts said the deal also fills a gap in Valeant's distribution chain after it cut ties with mail-order pharmacy Philidor RX in October following criticism of Philidor's business practices and of Valeant's accounting of revenues associated with Philidor. Valeant shares have fallen more than 60 percent since early August. RBC Capital Markets said the deal should be viewed favorably and that the drop in revenues is not as severe as expected. Bestseller Jublia will "only see a 10 percent price reduction," RBC said. Shares of Valeant surged 14.4 percent to $107.68 in late-morning trade, while Walgreens parent Walgreens Boots Alliance were flat at $82.58.