- Special Committee on Aging to hold drug price hearing April 27
- Hearing will be committee's third on medication price hikes
Valeant Pharmaceuticals International Inc.’s outgoing chief executive officer, Michael Pearson, was subpoenaed to testify at a hearing next month by a Senate committee investigating drug price hikes.
The April 27 hearing will be the third in a series the Senate Special Committee on Aging has held on pharmaceutical companies that the committee says operate more like hedge funds and have increased the price of decades-old drugs, according to a statement Monday.
The subpoena adds to recent troubles at Valeant, which is facing numerous challenges including probes of its accounting and business practices, a ballooning debt and a slumping stock. Last week, the drugmaker said it would search for a new CEO to replace Pearson.
Since December, 15 executives and experts have appeared at three hearings held by Congress on drug prices. Only one person was subpoenaed: former pharmaceuticals executive Martin Shkreli, who has been charged with securities fraud, invoked his Fifth Amendment right and refused to testify at a House hearing in February. The Senate’s aging committee didn’t respond to requests for comment on why it was necessary to subpoena Pearson. Valeant didn’t respond to a request for comment on whether he would appear.
Prices Under Scrutiny
Valeant and Turing Pharmaceuticals AG, the company formerly run by Shkreli, have become the poster companies for an industry in the spotlight in Washington for raising some prices for critical drugs so high they’re out of reach for many patients and straining state and federal budgets.
At the February hearing before the House Committee on Oversight and Government Reform, Howard Schiller, a former Valeant finance chief who was then interim CEO while Pearson was on medical leave, testified willingly -- meaning a subpoena wasn’t needed. Shkreli did appear too, but invoked his right to stay silent.
The last hearing by the Senate’s aging committee, in March, featured Howard Dorfman, ex-general counsel at Turing.
Bill Ackman, one of Valeant’s largest shareholder, said last week his public company, Pershing Square Holdings Ltd., which mirrors the activist’s hedge fund holdings, had received a request from the Senate’s aging committee. Ackman, whose Pershing fund has taken a hit from the slump in Valeant’s shares, also joined Pershing Square Vice Chairman Steve Fraidin on the board of the drugmaker last week.
Valeant’s shares dropped 7.3 percent to $28.82 at 2:37 p.m. New York time. Through Friday, they had declined 88 percent since their August 2015 peak.