Reuters has published a compelling analysis of ongoing challenges facing pharmaceutical “rogue” Valeant with a focus on its price-inflated drug Syprine and its relationship with also-beleagured pharma company Kadmon. Among other issues, Valeant has been singled out as a prime offender in the realm of hyper-inflated pharmaceutical drugs, with, Syprine, its life-saving Wilson’s disease liver ailment treatment costing some patients nearly $300,000 for a year’s use (in 2011, Valeant priced the drug at less than $1,000 for 100 capsules, a rate that rose by 2015 to over $21,000 for the same dose).
In December of 2016, Wilson’s disease patients thought they might finally be getting some good news, as pharmaceutical manufacturer Kadmon announced its intention to make a generic version of Syprine. However, further investigation revealed that Kadmon had previously had an ongoing relationship with Valeant to co-promote Syprine in a deal whose profits would also pay down early Kadmon debts to Valeant (ties between the two companies turned out to originate with Kadmon’s predessor company ImClone, whose financial woes and insider trading scandals led to its infamous demise in the early 2000s).
It’s now not clear whether relationships between Valeant and Kadmon amount to an effort by the companies to keep a lower-priced generic version of Syprine off the market, action that would be a violation of U.S. antitrust laws. Experts point to the complicated facts of the case, making such determinations difficult. Lieff Cabraser partner Dean M. Harvey spoke with Reuters about the matter. “There’s both a somewhat benign view of this, and a not so benign view.” As Reuters describes it, the benign view is that Kadmon “brought some value and expertise to Valeant’s Syprine sales efforts,” and payments thereunder might be a reasonable explanation for Kadmon’s agreement to avoid competing with Valeant via a generic version.
As Harvey further observes, “If Kadmon’s competitive threat didn’t materialize until after the deal, then that certainly would weigh heavily in favor of the benign view.” Both Kadmon and Valeant deny any anticompetitive wrongdoing; the case will remain closely-watched.