Isuprel and Nitropress. Source NY Times.

According Fierce Pharma the FDA approved a generic version of Valeant’s (VRX) Nitropress last week:

Here’s a solution for the hospitals that say they’re still waiting on the discounts Valeant promised for price-jacked heart med Nitropress: The FDA has approved a generic.

The agency green-lighted the knockoff Friday, according to its website-and the news came ahead of some analysts’ expectations.

“We had modeled this as a mid-2017 event,” Wells Fargo’s David Maris wrote to clients Monday.

VRX fell 5% on Monday on the news.

The Situation

Valeant came under fire in 2015 for its alleged price-gouging. It met with the Senate Special Committee on Aging to discuss the matter. The committee was keenly interested in the company’s pricing for two heart drugs — Nitropress and Isuprel; according to Bloomberg Valeant raised its prices for Nitropress and Isuprel by 212% and 525% shortly after acquiring them. In what seemed to be an effort to preempt the Senate Special Committee, management promised to cut prices for the two drugs. However, as recently as September 2016 certain medical centers said they had not received discounts promised by Valeant.

Valeant Finally Shows Transparency

One of the biggest complaints by investors was that Valeant’s management demonstrated a lack of transparency. In hiring new CEO, Joe Papa, the company promised to deliver important information to investors in real time.

The company’s Q3 revenue was off 2% sequentially and 11% Y/Y. However, management dropped a bombshell — 2017 results were expected to be down versus 2016. The the main reason was that several neurology products were expected to lose exclusivity and generics were expected to face additional competition:

The primary drivers of the decline are both in our Diversified Products group. First, our neurology and other unit; second, in the generics unit.

In neurology, this decline will be driven by the expected loss of exclusivity of Nitropress in late 2016 or early 2017, and the expected loss of exclusivity of several brands in early 2017. Isuprel, Syprine, Mephyton, Virazole as well as the year-over-year impact of the genericization of Edecrin which went generic in Q2 of 2016, and the one I can’t say, Ammonul which went generic in March of 2016.

In generics, the decline reflects increased generic competition for select products.