Sunday, March 13, 2016

The LA Times explores Valeant's business model

The LA Times has a savage little article on herpes (or cold sore) topical medication. In Australia you can buy small tubes of Zovirax topical medication for about $15 over the counter.

In America it is somewhat more complicated - and an insurance company winds up paying about $2500.

Go read it.

After the exposure of Philidor (which was a device to deceive insurance payers) it can't be long until Valeant gets total payment kick-back.

The end is nigh.



hugs'nkisses said...

Zovirax 2g is £4.95 in the UK.

The States is so screwed on so many levels.

Anonymous said...

On the other hand, ibuprofen is 20 cents per pill in Australia and under 2 cents per pill in the US.

Anonymous said...

What's dysfunctional is the US system. Valeant takes advantage of it but other pharma companies as well.

longVRX said...

You can buy "small tubes of Zovirax topical medication" over the counter at Walmart(USA)for around $90 according to GoodRx.

Or, if you prefer (or don't know better because the pharmacy finds it inconvenient to inform you of the options), you can get "small tubes of Zovirax topical medication" at a cost of $2500 to your insurance company with a $95 copay, like the person in the LA Times story.

The "small tube" in the first case is Zovirax ointment, in the second case it's Zovirax cream. They are equally effective, although apparently the cream is more aesthetically pleasing.

If you find the Zovirax ointment a bit expensive at $90, you can instead get a packet of Zovirax tablets for around $15. The tablets are in fact the most effective option according to the dermatologist in the LAT article.

In other words, what we have here is more coal presented as diamonds by good ol' JH.
The desperation is giving off a distinct odor, John.

There are a couple of interesting questions this story raises, which the LA Times article didn't take up (can't blame them, they're only journalists) and which JH is certainly aware of and would have brought up if it was convenient for him but didn't because it isn't:

(1) Why did the Kaiser pharmacy find it inconvenient to inform the guy in the story that there were much cheaper options than the one he asked for?

(2) What percentage of the $2500 per tube goes to Valeant? What percentage does the PBM get?

JH prefers us not to consider these questions because if we did it might become clear that Valeant is probably not the primary bad guy in this story...

"The end is nigh" -- isn't that what you said about Fairfax Financial?

longVRX said...

I forgot there's also a third question:

(3) What percentage of the U.S. Zovirax/acyclovir market does Valeant's Zovirax cream have? Is their market share negligible just like it is for their branded D.H.E 45 (the one Hillary was ranting about)?

bbinc said...

In an informed and functional society rent-seeking would be quickly identified, dealt with so that the economy could move on to more productive endeavours.

How long will it take....

Anonymous said...

Just so people are aware, the LA Times article is from March 2015, not March 2016.

That said, facts are facts. Would be interesting to hear what Valeant is charging today for Zovirax. My pharmacist said today here in Canada the 5g tube of Zovirax 5% would cost about $100 CAN. Contrast that with the US price in the story, over $2600 US.

Unknown said...

How sad America has become so utterly corrupt, here is Zovirax 5% in the UK, sells for $8 anywhere on the high street Boots / Walgreens nonetheless...

Unknown said...

Zovirax $7 at Boots/Walgreens London high street

SWW said...

The short story of an evil pharmaceutical companies

Valeant use a "specialty pharmacy" to deliver the drug to patient. This is a loophole of US pharmaceutical companies and their best kept secret, long time ago some pharma-company's medicine need special care in transportation (for ex. temperature control) that can't be deliver via regular outlets and so they create these company to handle them, the doctor prescribe the medicine and instruct those companies to deliver the medicine to the patients directly, and the company will bill the insurance company. Most insurance company will just comply.

Company like Valeant figure that if they do the same thing - even with these 'stupid' cream (nails fungus, acne...) and charge a leg to the insurance and they will just pay it or pretend to negotiate and give the them (the insurance company) 40% discount, they will still make a fortune.

Valeant thought this is a victimless crime. Now the chicken has come home to roost.

The victim is everybody in US

Unknown said...

There are a couple of interesting questions this story raises, which the LA Times article didn't take up (can't blame them, they're only journalists) and which JH is certainly aware of and would have brought up if it was convenient for him but didn't because it isn't:

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