UPDATE 5-Valeant subpoenaed by U.S. prosecutors; shares drop
(Adds background on Clinton opposing industry "profiteering")
By Ransdell Pierson and Bill Berkrot
Oct 15 (Reuters) - Valeant Pharmaceuticals International Inc , already under fire over steep price hikes for two heart drugs, said it had been subpoenaed by U.S. prosecutors seeking details on its patient assistance programs, drug pricing and distribution practices.
U.S.-listed shares of Valeant, which said it would cooperate with the investigations, closed down 4.7 percent at $168.87.
The Canadian company, which was rapped by Democratic lawmakers in late September over those price increases, said late Wednesday it was reviewing subpoenas from the U.S. Attorneys' Offices for the District of Massachusetts and the Southern District of New York.
Valeant tripled the price of its drug Isuprel and raised the price six-fold for another heart drug, Nitropress, after buying them in February. While the magnitude of the price hikes has put Valeant in the political crosshairs, raising drug prices is not illegal in the United States.
The company said it had hired a consultant to review the drugs' pricing and reimbursement. The consultant found "considerable room to increase the price of both drugs," Chief Executive Michael Pearson said in a letter on Wednesday in response to concerns expressed by U.S. Senator Claire McCaskill. He added that Valeant has made substantial investments in manufacturing in the United States.
McCaskill, the top-ranking Democrat on the Senate's Permanent Subcommittee on Investigations, said on Thursday that Pearson's letter failed to answer her questions and that she would press on with her investigation of drug pricing.
Pearson has built Valeant into one of the world's largest drugmakers through numerous acquisitions. His business model has featured price hikes on medicines, while slashing research spending of acquired companies. Continued...