The CEO of Valeant, a Canadian pharmaceutical company at the center of an ongoing inquiry into price gouging in the drug industry, has agreed to testify to Congress about the company's pricing strategy.
The agreement by Michael Pearson to explain some of the company's controversial business practices comes after months of bad news for the company. In addition to being lambasted for jacking up the prices of many drugs that it bought the rights to, Valeant has been accused of prematurely reporting sales to Philidor, the mail-order pharmacy.
The Senate Committee on Aging, which has been investigating drug price increases, issued a subpoena for Pearson to show up at a hearing last week. He did not, and the committee said it would begin legal proceedings against him. By agreeing to show up now, Pearson will likely avoid any charges of contempt of Congress.
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The bad PR from politicians and regulators has taken a heavy toll on the company. The prices of its stock has plummeted and its creditors are warning that it is at risk of defaulting on its roughly $30 billion in debt in the coming months.
In a joint statement, Sens. Susan Collins, R-ME, and Claire McCaskill, D-MO, the chair and ranking member, respectively, of the committee, which has been leading a probe into drug price increases, welcomed the news.
"We look forward to hearing Mr. Pearson's testimony," said the statement. "This deposition and investigation are about better understanding the dramatic price increases we're seeing for decades-old prescription drugs and how those prices are affecting consumers."
Valeant's response to scrutiny from Congress has been notably more conciliatory than that of Turing CEO Martin Shkreli, who has ridiculed politicians who have demanded answers for some of the dramatic price increases he approved. Shkreli gained notoriety last year after his company raised the price of a pill of Daraprim, a medication commonly used to treat HIV/AIDS, from $13.50 to $750.
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