U.S. Prosecutors Subpoena Valeant Pharmaceuticals Over Massive Price Hikes

Valeant Pharmaceuticals

Valeant Pharmaceuticals International recently increased the prices of two heart medications and that decision has placed the company in the crosshairs of U.S. prosecutors.

The company was subpoenaed by U.S. prosecutors this week because of its pricing, drug distribution and patient assistance programs.

Valeant’s U.S.-listed shares were down 8.7 percent at $161.80 in premarket trading on Thursday.

The company came under fire by Hillary Clinton and other Democratic lawmakers in late September over “massive” price increases.

The subpoena’s were served by attorneys for the District of Massachusetts and the Southern District of New York.

Valeant intends to cooperate with the investigations, the company said late on Wednesday.

The subpoena’s were issued after allĀ 18 Democratic members of the House of Representatives Committee on Oversight and Government Reform urged their chairman to subpoena Valeant.

The price of Isuprel has tripled in recent months and Nitropress has witnessed a six times increase since February.

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Chief Executive Michael Pearson wrote to McCaskill that the company hired a consultant to review the two drugs’ pricing and reimbursement by the Centers for Medicare and Medicaid Services. The consultant told Valeant Pharmaceuticals “there was considerable room to increase the price of both drugs without unduly depleting the funds available to the hospitals from payers.”

Pearson is no stranger to raising prices, he has turned Valeant into one of the largest drugmakers in the world by acquiring companies and then raising the price points on their already in product drugs.

Pricing concerns were raised by Hillary Clinton after Turing Pharmaceuticals acquired the 62-year-old Daraprim and raised the price of the treatment for a dangerous parasitic infection to $750 a tablet from $13.50.

Valeant Pharmaceuticals and U.S. prosecutors are not commenting further at this time.

Written by Peter Mondrose

Peter Mondrose

Peter Mondrose is the Editor-In-Chief at BusinessPundit. He received his degree in Economics in 1998 and a second degree in Journalism in 2004. He has served as a financial adviser, market trader, and freelance journalist for the last 11 years. When he's not investigating market conditions and reporting on workplace news, he can be found traveling with his wife, dog, and laptop. He can be reached at PeterMondrose@BusinessPundit.com or (929) 265-0240.