Valeant Announces New Fulfillment Agreements With Walgreen - Quick Facts

(RTTNews) - Valeant Pharmaceuticals International Inc. (VRX, VRX.TO) announced new fulfillment agreements with Walgreens while indicating it intends to extend this distribution model to additional participating independent retail pharmacies.

As per the agreement, Valeant will reduce prices of its branded prescription-based dermatological and ophthalmological products by 10 percent. The reduced pricing will apply to the wholesale list prices of these products and will be phased in over the next six to nine months. This agreement also covers Valeant's over-the-counter product portfolio.

Valeant noted that the agreement will enable consumers to conveniently access Valeant's dermatology and ophthalmology products at a lower out-of-pocket cost from more than 8,000 Walgreens U.S. retail pharmacy locations, as well as participating independent retailers.

The 20-year agreement takes effect the first quarter of 2016 and will initially cover Valeant's dermatology products - including, most notably, Jublia, Luzu, Solodyn, Retin-A Micro Gel 0.08%, Onexton and Acanya Gel - and ophthalmology products - including Besivance, Lotemax, Alrex, Prolensa , Bepreve and Zylet.

Valeant and Walgreens hope to expand the relationship to include other therapeutic areas over time.

Walgreens and Valeant also have entered into a separate agreement under which Valeant will distribute more than 30 branded products, where generics are available, in the dermatology, ophthalmology, gastrointestinal and neurology/other therapeutic areas through Walgreens at generic prices, giving doctors the ability to make the branded product available to patients at generic prices.

The reduced pricing for the branded products, which will be available to all patients beginning the second half of 2016, is expected to range from 5 percent to 95 percent, or a weighted average price decrease of more than 50 percent. The agreement covers such products as Aldara, Tiazac, and Glumetza. This program will be available to all patients, including those with government coverage.

Valeant said it expects the price decreases across both programs, when fully implemented, will provide up to $600 million in annual savings to the healthcare system. This number is derived from calculating the 10 percent reduction in average selling price (ASP) of Valeant's dermatology and ophthalmology brands, multiplied by the actual 2015 volume, plus the estimated 50 percent price reduction in ASP of Valeant's branded products to the current reimbursed generic equivalent at 2015 volumes.