Congressional Democrats Seek Subpoena of Valeant Over Drug Prices
September 28 2015 - 03:56PM
Dow Jones News
By Jonathan D. Rockoff
Democrats on the House oversight committee are asking the
committee chairman to force Valeant Pharmaceuticals International
Inc. to provide documents explaining hefty price increases for two
heart drugs.
Valeant refused early this month to provide documents sought by
Rep. Elijah Cummings (D., Md.) and Sen. Bernie Sanders (I., Vt.)
explaining the 525% and 212% price increases the company took on
the two drugs the day it acquired their rights, saying the
requested information was "highly proprietary and
confidential."
On Monday, Rep. Cummings, ranking member of the House Committee
on Oversight and Government Reform, and its 17 other Democratic
members sent a letter to the committee's Republican chairman asking
him to issue a subpoena compelling Valeant to furnish the
documents.
The Democrats also asked the chairman, Rep. Jason Chaffetz (R.,
Utah), to ask Valeant CEO Michael Pearson to testify before the
committee.
Valeant shares fell more than 15% on Monday amid news of the
Democrats' request for a subpoena, after falling more than 12% over
the previous several days amid increasing criticism from
politicians about drug price increases.
"We believe it is critical to hold drug companies to account
when they engage in 'a business strategy of buying old neglected
drugs and turning them into high-price 'specialty drugs,' " the
Democrats wrote in their letter, quoting from an article in The
Wall Street Journal in April about the industry practice, which
used Valeant's drug-price increases as an example.
The Democrats wrote they are also seeking the testimony of
Martin Shkreli, CEO of Turing Pharmaceuticals AG, which raised the
price of anti-parasite drug Daraprim more than 50-fold after buying
the U.S. rights in August. After an onslaught of criticism, Mr.
Shkreli later said Turing will cut the drug's price from its
current $750 a tablet.
Valeant and Turing declined to comment on the Democrats'
letter.
It is up to Mr. Chaffetz to decide whether the committee will
issue a subpoena or hold a hearing, but it is far from certain he
will. The Democrats wrote in their letter that Mr. Chaffetz had
declined to sign the initial request to Valeant seeking documents
and other information about the price increases for the two heart
drugs, Nitropress and Isuprel.
Mr. Chaffetz didn't immediately respond to a request for
comment.
Earlier on Monday, Mr. Pearson, in a letter Valeant employees,
dismissed Wall Street's concerns regarding the company's growth
prospects. He said just 15% of Valeant revenues come from U.S.
government reimbursements, and that the company generally relies on
selling more drugs to up its sales, not price increases.
"Valeant is well-positioned for strong organic growth, even
assuming little to no price increases," Mr. Pearson wrote.
Hospitals use Isuprel during procedures to treat heart-rhythm
problems, and give Nitropress to emergency patients whose blood
pressures have increased to life-threatening levels. Rep. Cummings
and Sen. Sanders sought documents such as sales contracts for the
ingredients used to make the two drugs and information such as the
total gross revenues from sales of the drugs.
Valeant didn't provide any documents, but said in a letter dated
Sept. 3 that it raised the prices because the drugs were
"significantly underpriced" and the company has patient-assistance
programs to help patients get the drugs if they face financial
obstacles.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 28, 2015 15:41 ET (19:41 GMT)
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