UPDATE 3-Valeant gets boost from new distribution deal with Walgreens

Tue Dec 15, 2015 2:07pm EST
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* Deal with Walgreens more than replaces Philidor-Valeant CEO

* U.S.-listed shares jump nearly 17 percent

* Deal does not secure easier reimbursement from insurers (Recasts, adds analyst comment)

By Caroline Humer and Vidya L Nathan

Dec 15 (Reuters) - Valeant Pharmaceuticals International Inc on Tuesday said it reached a deal to distribute its drugs through leading pharmacy chain Walgreens Boots Alliance Inc, boosting credibility with wary investors and sending its shares up 17 percent.

Valeant and its Chief Executive Michael Pearson have come under pressure for steep price increases on some of Valeant's drugs and for close ties to a specialty pharmacy that used aggressive methods to overcome insurer barriers to reimbursing its medicines. Valeant's share price had dropped nearly 75 percent in recent months as its actions came under scrutiny from Congress and state and federal prosecutors.

The company said on Tuesday its arrangement with Walgreens would replace and build on sales that it would have booked from specialty pharmacy Philidor Rx Services. Philidor, which is shutting down following accusations of improper billing, accounted for about 7 percent of Valeant sales so far this year.

Wall Street analysts said the deal should help Valeant fill the gap in its revenue as Philidor closes, but acknowledged that insurers may still refuse to cover many of its drugs.

For example, Valeant said it would offer a 10 percent discount off wholesale prices on many of its skin and eye medications, including Jublia and Solodyn. The company did not explain how that would be passed on to consumers.   Continued...