Sprout investors say Valeant prices 'female Viagra' too high - Bloomberg

March 25 (Reuters) - Investors in Sprout Pharmaceuticals,
which makes the first drug to treat low sexual desire in women
and was bought by Valeant Pharmaceuticals International Inc (NYSE:VRX)
VRX.TO last year, say the drug has been priced too high,
Bloomberg reported on Friday.
By overcharging for the drug and neglecting to market it,
Valeant has undercut the commercial success of the drug, called
Addyi, Bloomberg reported, citing a letter from Sprout
shareholders.(http://bloom.bg/1obsjv5)
Valeant priced Addyi at $800 a month even though Sprout had
established a price point of about $400 a month based on market
research, the investor group wrote in the letter sent to Valeant
on March 14, according to Bloomberg.
The group represented all of Sprout shareholders at the time
of its sale to the Canadian drug company for $1 billion in
August.
Addyi, whose chemical name is flibanserin, is designed for
premenopausal women whose lack of sexual desire causes distress.
The condition is formally known as hypoactive sexual desire
disorder, or HSDD. The drug needs to be taken daily.
Addyi has been nicknamed the "female Viagra" even though it
does not work like Pfizer Inc (NYSE:PFE)'s blockbuster Viagra pill for men
that in 1998 became the first approved drug for erectile
dysfunction.
Due to the higher price point, insurance companies refused
to cover the drug, helping to make it unaffordable for millions
of women, the investors group said.
The investors requested materials showing that Valeant can
fulfill its obligations under the merger agreement going
forward, Bloomberg reported. They are seeking evidence that
Valeant plans to spend $200 million for marketing and research
and development for 2016 and half of 2017, as part of the
agreement, it added, citing the letter.
The group also seeks assurance that Valeant will keep a
sales force of 150 to distribute Addyi.
In response, Valeant said it was continuing to work closely
with pharmacists, healthcare providers, and patients to educate
them about the drug.
"Valeant intends to comply with all of its obligations under
our agreement with the former shareholders of Sprout, including,
as they relate to marketing spend, number of sales reps, and
post-marketing studies," said Laurie Little, a Valeant
spokeswoman.