|Valeant CEO J. Michael Pearson
Valeant ($VRX) has responded to lawmakers' requests for information on Isuprel and Nitropress, two drugs whose prices the company raised substantially after acquiring them from Marathon Pharmaceuticals. But now, it's got a pair of prosecutors to answer to.
The Canadian pharma Wednesday revealed that it's received a subpoena from the U.S. Attorney's Office for the District of Massachusetts and one from the U.S. Attorney's Office for the Southern District of New York. Most of the requested materials relate to the company's pricing decisions, as well as its patient assistance and financial support programs, it said.
"All of us at Valeant firmly believe in maintaining strong regulatory and financial controls and believe we have operated our business in a fully compliant manner," CEO J. Michael Pearson said in a statement. "We remain committed to assisting eligible patients who need our products, and we will be working with the appropriate groups to submit the requested documents and plan to cooperate with the inquiries."
Valeant has recently found itself amid a flurry of drug-pricing controversy. After Turing Pharmaceuticals last month drew ire from politicians with a 5000% price hike on new acquisition daraprim, the spotlight turned to Valeant, which has bumped up list prices on 56 meds of its own so far this year by an industry-leading average of 65.6%. In late September, all 18 Democratic members of the House Committee on Oversight and Government Reform sent a letter requesting Committee Chairman Jason Chaffetz send Valeant a subpoena over the Isuprel and Nitropress price increases, which tallied 525% and 212%, respectively.
Now, though, Valeant says it has responded to a letter from Senator Claire McCaskill (D-MO) addressing, among other topics, the reasoning behind its pricing decisions for the duo and the reimbursement process for hospital procedures involving the heart meds. It's also starting to reach out to hospitals that especially felt the impacts of its pricing move.
Meanwhile, the Quebec-based drugmaker maintains that price-jacking doesn't provide a significant boost to its top line. Earlier this month, it struck back at investment-community critics, pointing out that the "actual net effect" of a price-hike "is determined after taking into account any rebates/fees to: patients, managed care, government, wholesaler, group purchasing organizations, and customers."
Pearson wrote in a September letter to employees: "Valeant is well-positioned for strong organic growth, even assuming little to no price increases." The company's "core operating principles include a focus on volume growth and a concentration on private and cash pay markets that avoid government reimbursement in the U.S. and across the world."
- read Valeant's release
Special Reports: 10 big brands keep pumping out big bucks, with a little help from price hikes | The top 10 most expensive drugs of 2013