December 16, 2015 / 3:21 PM / in 2 years

UPDATE 1-U.S. House Democrats to seek testimony from Valeant in coming weeks

(Updates with information from Valeant's call with investors on Wednesday, comment from Turing in paragraphs 12, 22)

By Sarah N. Lynch

WASHINGTON, Dec 16 (Reuters) - Democrats on a U.S. House of Representatives panel are planning to call Valeant Pharmaceuticals Chief Executive Michael Pearson to testify in early 2016 about steep price hikes for some of the company's drugs, a Democratic aide said.

The hearing before the House Oversight Committee could be held as early as late January as part of an ongoing probe into skyrocketing drug prices, a Republican committee aide said.

The Republican majority in the House sets the agenda for the committee and gets to decide which witnesses to call, but the Democratic minority is typically allowed to select at least one witness.

On Tuesday, Republican Chairman Jason Chaffetz and other lawmakers sent the FDA a letter inquiring about the process for reviewing generic drugs as part of the ongoing investigation.

The letter specifically refers to the biotechnology firm KaloBios, which was recently acquired by Turing CEO Martin Shkreli.

A Republican committee aide told Reuters the panel has been talking to a number of pharmaceutical companies as part of the probe, but Republicans have not yet decided which executives they will summon to testify.

Valeant and Turing Pharmaceuticals have been under mounting U.S. government scrutiny over their practice of acquiring off-patent drugs and drastically hiking the prices.

Last week, the U.S. Senate Special Committee on Aging kicked off a series of hearings designed to investigate the causes behind drastic drug price increases.

The panel's chairwoman, Republican Senator Susan Collins, expects to call both Pearson and Shkreli to testify at a hearing in 2016.

Valeant is under the microscope not only for its drug prices but also for its previously close ties to Philidor, a specialty pharmacy with aggressive billing tactics.

The company's shares have lost nearly 75 percent of their value after it disclosed it had received subpoenas from federal prosecutors.

Valeant told investors on Wednesday that it expects strong profit growth in the coming years, but that it would be based on increasing the volume of products sold rather than steep price hikes.

Valeant recently hired Covington & Burling attorney Robert Kelner to manage the congressional inquiries, as well as a crisis public relations firm.

Turing is under investigation for possible antitrust violations by the New York Attorney General.

In addition, federal prosecutors and securities regulators are probing Shkreli's relationship with pharmaceutical company Retrophin, which he used to head, and hedge funds he managed, according to Retrophin's corporate filings.

Maryland Congressman Elijiah Cummings, the ranking Democrat on the House Oversight panel, has been among the most vocal critics of Valeant and Turing's pricing practices.

He has repeatedly asked Valeant to turn over documents to the committee and to make some of the company's employees available for interviews to discuss Valeant's business relationship with Philidor.

In a Dec. 15 letter from Cummings to Pearson seen by Reuters, Cummings complained that the company has failed to turn over all of the information requested.

"Your refusal to provide any documents or witnesses is obstructing this congressional investigation and preventing a full understanding of your company's suspect actions," Cummings wrote.

Cummings said he wants the company to produce records and interviews by Jan. 8.

A Valeant spokeswoman said the company disagrees with many of his statements, and that it has provided information to the committee and will cooperate.

Dr. Eliseo Salinas, the president of research and development at Turing, said the company has been "fully engaged with legislators" and their staff in dozens of meetings on Capitol Hill in recent months. (Reporting by Sarah N. Lynch; Editing by Cynthia Osterman and Frances Kerry)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below