Valeant ($VRX) has repeatedly frustrated lawmakers with its limited responses to their price-hike probes. Now, a Senate committee has slapped CEO J. Michael Pearson with a subpoena, in an effort to get more answers.
|J. Michael Pearson|
On Monday, the Senate's Special Committee on Aging revealed that it expected Pearson--who now plans to bow out when Valeant finds a replacement--to testify as a witness at an upcoming hearing. Its third public airing of "sudden, aggressive price spikes of decades-old" prescription drugs, the hearing is scheduled for late next month.
The Canadian pharma--along with ex-Turing Pharma CEO Martin Shkreli--have come into the spotlight in recent months for jacking up prices on recently acquired meds. Valeant first drew the attention of Congress last summer, when Rep. Elijah Cummings (D-MD) and Sen. Bernie Sanders (D-VT) sent a letter to Pearson demanding documents and details on prices for Isuprel and Nitropress. The company had acquired the two heart meds in its Marathon Pharmaceuticals buyout and hiked their prices afterward.
Since then, lawmakers say they haven't obtained the answers they're seeking. In October, Sen. Claire McCaskill (D-MO)--co-leader of the Senate committee--blasted the company for offering "limited information" on the revenue generated by its price increases. Valeant also left out requested background, such as its expenses associated with the drugs, McCaskill said. And just a couple of weeks ago, Cummings and Rep. Jason Chaffetz (R-UT) once again prodded the company to hand over information demanded last year--and explain why Valeant has withheld certain documents.
Pearson isn't the only one feeling the heat in the wake of Valeant's reticence. Last week, the committee reached out to Bill Ackman--longtime Valeant ally, head of the company's No. 2 shareholder, and a recent addition to the drugmaker's board--for answers, a request Ackman said he would cooperate with.
Meanwhile, Valeant is still fielding a host of other problems. It recently admitted that delays to its regulatory filings put it at risk of defaulting on its debt, an announcement that triggered a 51% share drop, a search for Pearson's CEO replacement, and Ackman's appointment to the Valeant board.
- read the release
Special Reports: The most influential people in biopharma today - 2016 - J. Michael Pearson - Valeant - Hillary Clinton, et al.| The 25 most influential people in biopharma in 2015 - Bill Ackman - Pershing Square Capital Management