Valeant CEO J. Michael Pearson is on his way out of the embattled company, but probing lawmakers aren't finished with him just yet. A Senate panel plans to slap Pearson for stonewalling in an ongoing investigation into drug pricing.
The beleaguered helmsman was supposed to give a deposition last week for the Senate Special Committee on Aging's drug pricing investigation. But Pearson "did not comply," so the panel is planning to launch contempt proceedings against him, committee chair Sen. Susan Collins (R-ME) and ranking member Claire McCaskill (D-MO) said in a statement.
Valeant's board says Pearson is "in dialogue" with the committee about his deposition, and that the company has "requested" that he cooperate.
The Senate Committee subpoenaed Pearson last month to attend an April 27 hearing on drug pricing. The deposition was scheduled ahead of that hearing. Now, Pearson's lawyer, Bruce Yannett of Debevoise & Plimpton, says that the CEO will show up at the hearing. But, in a letter to Collins and McCaskill last week, Yannett contended that the committee is burdening Pearson with too many requests ahead of time.
The Senate panel hasn't been up front about which topics and documents Pearson will be questioned about, Yannett said in his letter. Without that information, "the committee's demand would expose him to an inherently unfair process for which we cannot adequately prepare him under the circumstances."
Plus, Pearson has a lot on his plate right now, Yannett said. Valeant execs are trying to submit overdue regulatory filings. And the company's top brass, including Pearson, are scrambling to secure lender approval for a debt proposal that would hold off a default.
"Mr. Pearson is not simply 'maintaining a busy schedule'--he is leading a public company through a series of critical steps that are clearly in the best interests of its shareholders and thousands of employees," Yannett said.
Even so, the company wants Pearson to cooperate. "The Board has requested Mr. Pearson's cooperation in connection with a subpoena for deposition from the Senate Committee on Aging prior to the Committee's scheduled April 27 hearing," the company said in a statement Monday. "The Board understands that Mr. Pearson is in dialogue" with the committee about his deposition "and that those discussions are ongoing," it added.
Pearson, who is slated to depart the company once it finds a successor, isn't the only one coming under fire for Valeant's sparse responses on pricing. The Senate Committee said last month that it would probe Bill Ackman's Pershing Square, the company's second-largest investor, over Valeant's alleged price hikes.
Meanwhile, lawmakers in the House, from both sides of the aisle, are also taking the company to task over price increases. The House Committee on Oversight and Government Reform held a hearing earlier this year and grilled interim Valeant CEO Howard Schiller on Valeant's price-setting ways. Committee leaders Rep. Jason Chaffetz (R-UT) and Elijah Cummings (D-MD) kept the heat on Valeant last month with a letter to Pearson requesting that he submit withheld documents on pricing.
- read the statement
- here's Valeant's release
- get the letter (PDF)