Valeant Pharmaceuticals Intl Inc. (NYSE: VRX) announced on Monday that Michael Pearson, the company’s outgoing chief executive, cooperate with a Senate committee investigating increases in the prices of certain prescription drugs after he fail to appear for a deposition last week.
Valeant Pharmaceuticals said, “The board understands that Mr. Pearson is in dialogue with the Senate Committee on Aging regarding his deposition and that those discussions are ongoing.” The Senate committee is holding an open hearing, scheduled for April 27, which will explain how Valeant Pharmaceuticals dramatically rose the price of certain acquired prescription drugs.
"Michael Pearson was under subpoena to appear for a deposition today related to the Senate Special Committee on Aging's drug pricing investigation, and he did not comply with that subpoena," Senators Susan Collins and Claire McCaskill said late Friday. "It is our intent to initiate contempt proceedings against him."
The part business strategy of Valeant Pharmaceuticals acquiring older drugs and then increase their prices. The Canadian drug maker now faces three federal probes into its accounting and business practices.
Valeant Pharmaceuticals has become a poster child for criticism of high drug prices and a target of congressional inquiries after major medias reported 2015 that the company was acquiring the rights to certain lifesaving drugs and dramatically increasing their prices. The company said it only adjusted some underpriced drugs to reflect market value.
In March 2016, Valeant Pharmaceuticals said it was looking to resign Mr. Pearson, the architect of a Valeant’s strategy. Mr. Pearson will stay on as CEO and director until his successor is appointed. Shares of Valeant Pharmaceuticals decreased 2.85% to $32.71 during Monday morning.