Valeant faces U.S. Senate probe of three drugs that saw prices skyrocket

Valeant faces U.S. Senate probe of three drugs that saw prices skyrocket

Main pic: The head office and logo of Valeant Pharmaceutical are pictured in Montreal on Monday May 27, 2013. THE CANADIAN PRESS/Ryan Remiorz.

MONTREAL — The political scrutiny of Valeant Pharmaceuticals is heating up as the U.S. Senate formally launched a probe Wednesday into skyrocketing prices for three of the company’s prescription drugs.

The Senate’s special committee on aging said it had requested documents and information from Valeant (TSX:VRX) and three other drug companies.

Also requested were documents from Turing Pharmaceuticals, Retrophin Inc., and Rodelis Therapeutics amid a public outcry over the hikes, most notably Turing’s move to raise the price of Daraprim by 5,000 per cent after obtaining rights to the drug. The medicine is the only U.S.-approved treatment for a deadly parasitic infection called toxoplasmosis.

Past political focus on Valeant in the U.S. has been on the heart drugs Isuprel and Nitropress. But in a letter to Valeant CEO Michael Pearson, the Senate committee is also seeking information on Cuprimine, used to treat Wilson’s Disease, an inherited disorder that can cause severe liver and nerve damage.

Cuprimine’s price soared nearly 3,000 per cent to US$26,189 for 100 capsules from US$888 after Valeant purchased the rights to it. Nitropress increased 625 per cent and Isuprel by 820 per cent, the Senate letter said.

Republican Senator Susan Collins and ranking Democrat Senator Claire McCaskill asked for Valeant’s co-operation by turning over analysis, documents and historical financial data.

They also wanted a list of countries where the drugs are sold or are expected to be sold in the next two years and the corresponding prices.

A hearing on the issue is tentatively scheduled for Dec. 9.

“We need to get to the bottom of why we’re seeing huge spikes in drug prices that seemingly have no relationship to research and development costs,” said McCaskill.

Some of the increases resemble “little more than price gouging,” she added.

Valeant said it would co-operate with the committee’s inquiry.

“Valeant manages a large portfolio of medicines and the prices of individual drugs fluctuate due to a number of factors, including the cost of development and acquisition and complexities in the health-care cost reimbursement system,” said spokeswoman Laurie Little.

She said the list price of any drug doesn’t typically reflect the actual amount paid since the company provides financial assistance to make them more affordable.

Valeant is already under investigation by members of the House of Representatives for its general business strategy, which involves buying smaller drug developers and then jacking up prices on their medicines.

House Democrats called Wednesday for the Republican chairman of the committee on oversight and government reform to hold a vote Nov. 17 on its request that a subpoena be issued to Pearson and Turing CEO Martin Shkreli. The Democrats want to compel Pearson to produce documents they say he has been withholding for months.

“When corporate executives like Mr. Pearson and Mr. Shkreli engage in abusive business practices to enrich themselves and their shareholders at the expense of patients, hospitals and other health-care providers, they should be held accountable for their decisions,” the Democrats added in a separate letter.

Valeant said it has also received multiple subpoenas from federal prosecutors.

The Quebec-based company’s shares have dropped more than 60 per cent since August over the pricing issue and ties to specialty pharmaceutical company Philidor Rx Services. Philidor is winding down operations after Valeant and other customers severed ties with it.

Valeant shares were down more than three per cent at $123.50 Wednesday afternoon on the Toronto Stock Exchange.

— With files from The Associated Press

Follow @RossMarowits on Twitter.

Ross Marowits, The Canadian Press

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