Valeant Strikes Novel Drug Distribution Deal with Walgreens
With this novel distribution agreement, it is unclear how the liability relating to thermal product integrity during storage and distribution will be handled.
Perhaps in an effort to renew its soiled image following a problematic distribution arrangement with Philidor Rx Services and questions from Congress about its drug pricing activities, Valeant announced on Dec. 15, 2015 that it will enter into a direct distribution agreement with Walgreens. The agreement may also allow Valeant to reclaim a portion of the 20% of scripts that the company lost as a result of its separation with Philidor.
The arrangement will authorize Walgreens to “host” Valeant’s products on its pharmacy shelves, without the obligation for the pharmacy to purchase the drug inventory from Valeant. This means that Walgreens will not make its money on pharmacy spread, but will instead receive a flat distribution and dispensing fee from Valeant, according to Pembroke Consulting’s Adam J. Fein on his website, Drug Channels. In essence, Valeant will hold title to products, and Walgreens will provide a storefront in which the drugs can be purchased.