Valeant CEO says drug pricing may drop

The CEO of Valeant Pharmaceuticals, which is being investigated by the government for raising drug prices, predicted more modest price increases ahead for the pharmaceutical industry.

The prices on certain drugs – including those for hepatitis C, cancer and rare diseases – have come under fire in recent months. In addition, Democratic presidential candidate Hillary Clinton set forth a plan to combat rising drug costs.

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Canada-based Valeant was targeted by US Congressional representatives after it increased the prices of heart medications Nitropress and Isuprel by 525% and 212% respectively, soon after it acquired the 2 drugs.

Then, last week, the company received subpoenas from US federal prosecutors seeking information about the pricing and distribution of its drugs.

Now, Valeant may be changing its pricing tune. The company’s 2016 outlook is based on expectations for a new pricing environment in which its drugs will not have an actual price increase of more than 10%, Valeant CEO J. Michael Pearson told investors, Reutersreported.

"The pharmaceutical industry is being aggressively sort of attacked for past pricing actions," Pearson said. "I do think, given that environment, the pricing that pharmaceutical companies will take in the future will be more modest."

Instead of increasing prices, Valeant is also considering selling, spinning off or taking private its neurological and other pharmaceutical business, according to Reuters. This may get the company out of hot water with regulators, since its neurological business accounts for most of its price increases.

In addition, Valeant plans to focus more on research and development, hiking its budget from $100 million last year to between $400 million and $500 million in 2016.