- CEO Pearson's lawyer had called deposition subpoena unfair
- Senate committee will meet Wednesday on contempt proceedings
Valeant Pharmaceuticals International Inc. asked outgoing Chief Executive Officer Michael Pearson to cooperate with a subpoena to appear before a U.S. Senate committee that’s investigating drug pricing.
The Senate Special Committee on Aging plans to meet Wednesday to initiate contempt proceedings, Annie Clark, a spokeswoman for Senator Susan Collins, said in an e-mail, after Pearson failed to appear at a deposition last week. The committee, led by senators Collins and Claire McCaskill, was seeking to talk with Pearson ahead of an April 27 hearing.
“Mr. Pearson and his counsel are currently in contact with the Senate Aging Committee,” Clark said. “Discussions are ongoing.”
The directors’ public request for their CEO’s cooperation adds another twist to the controversies the drugmaker has faced in the past months regarding its accounting and pricing practices. The company, whose board now includes billionaire investor Bill Ackman, started a search for Pearson’s successor last month.
Valeant shares decreased 2.1 percent to $32.95 at 10:43 a.m. The company’s stock has fallen 84 percent in the 12 months ending Friday.
A lawyer representing Pearson said last week that the executive will appear at the hearing but that the deposition subpoena was unfair in both timing and scope. Pearson shouldn’t be expected to give sworn testimony if the committee hasn’t been clear about what topics and documents he’ll be questioned about, attorney Bruce E. Yannett of Debevoise & Plimpton LLP said in an April 7 letter to Collins, a Maine Republican, and McCaskill, a Democrat from Missouri.
“The committee’s demand would expose him to an inherently unfair process for which we cannot adequately prepare him under the circumstances,” according to the letter.
As for Pearson’s replacement, Ackman said this month he was “cautiously optimistic” that the search would take “a matter of weeks.”