Valeant ($VRX) hasn't historically had much of a lobbying presence in Washington--at least, not compared with its pharma peers. But with pressure and scrutiny mounting on the Canadian drugmaker, that may be about to change.
The company has hired boutique crisis public affairs firm Vianovo, which counts former political campaign and government aides among its managers, Reuters reports. In addition to providing "high-stakes brand, policy and crisis issues," the firm has lobbied on the part of companies including Apache Corp. and healthcare networks such as Adventist Healthcare.
Valeant hasn't socked nearly as much into lobbying in years past, the news service notes; it shelled out less than $250,000 in the first half of this year (Pfizer ($PFE), for reference, coughed up $4.9 million over the same span).
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| Valeant CEO J. Michael Pearson |
But the company may need some more help going forward. It's found itself in the doghouse with some lawmakers lately over its price-hike strategy, potential antitrust violations for its contact lens business, and controversial relationships with specialty pharmacies. The latter would include Philidor, whose business practices came into question after short seller Citron Research published allegations that Valeant was using the pharmacy to inflate its top line.
Last week, the U.S. Senate's Special Committee on Aging got the ball rolling with the first in a series of hearings to investigate climbing costs on off-patent drugs, zeroing in on two heart drugs Valeant acquired from Marathon Pharmaceuticals--and raised the prices on--earlier this year. The House Oversight Committee is also looking into the matter and planning a hearing for next year. On the antitrust front, Valeant in October disclosed a subpoena from the U.S. Department of Justice regarding its Bausch + Lomb eyecare division.
And through it all, Valeant's shares have taken a beating: They've lost nearly 75% of their value since the controversy began brewing, Reuters notes.
Signing on Vianovo is not only move Valeant has made in Washington. The company recently hired D.C.-based attorney Robert Kelner, a partner at Covington & Burling--a firm that has represented pharma giants including Johnson & Johnson ($JNJ) and Pfizer with a roster that features former Attorney General Eric Holder. Kelner is coming on to help Valeant respond to congressional inquiries, company spokeswoman Laurie Little told the news service in a statement.
But Valeant still has plenty of work to do. In the wake of its cancelled relationship with Philidor, it's in the process of inking other specialty pharmacy agreements to support sales of its dermatology products, but the business will take a hit as a result of the process, CEO J. Michael Pearson said last month.
Last week, it also saw the departure of high-level exec Cindy Whitehead--CEO of Valeant's Sprout Pharmaceuticals--which could indicate that the company's stock price decline is precipitating personnel exits, BMO Capital Markets analyst Alex Arfaei told Bloomberg.
And while the drugmaker has its hands full with its slate of current problems, it's also been taken to task over last year's hostile pursuit of Allergan ($AGN). Last month, a U.S. judge ordered Valeant and former deal partner Bill Ackman to face a lawsuit accusing the pair of insider trading.
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