Valeant Pharma (VRX) Receives Federal Subpoenas Related to Drug Pricing

October 14, 2015 10:54 PM EDT

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) responded to a letter from Senator Claire McCaskill (D-MO) concerning the company's products Nitropress and Isuprel. In his response to Senator McCaskill, J. Michael Pearson, the chairman of the board and chief executive officer of Valeant, addressed the history of Nitropress and Isuprel, the reimbursement process for hospital procedures involving Nitropress and Isuprel, the analysis and reasons underlying Valeant's pricing decisions, and Valeant's programs designed to improve patient access, among other topics. The company also disclosed that it is beginning outreach to hospitals where the impact of a price change was significantly greater than the average.

In addition, Valeant recently received a subpoena from the U.S. Attorney's Office for the District of Massachusetts and a subpoena from the U.S. Attorney's Office for the Southern District of New York. Most of the materials requested by the subpoenas relate to documents with respect to our patient assistance programs, and also include requests relating to financial support provided by the company for patients, distribution of the company's products, information provided to the Centers for Medicare and Medicaid Services, and pricing decisions. The company is reviewing the subpoenas and intends to cooperate with the investigations.

"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," stated Pearson. "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."

Shares of Valeant have been under heavy pressure since late-September when Presidential hopeful Hillary Clinton put drug pricing front and center. She called it "price gouging", pointing to a New York Times article highlighted drugs made by Valaent and others.

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