Bowing under pressure, Pearson agreed to give a deposition prior to the public hearing.
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Apart from Mr. Pearson, two other executives from Valeant will also testify at the meeting.
Valeant’s stock surged under Pearson’s leadership, fueled by a strategy of gobbling up smaller companies and raising prices on niche drugs – bypassing the huge research and development investments typical of the drug industry.
“It was a mistake to pursue, and in hindsight I regret pursuing, transactions where a central premise was a planned increase in the prices of the medicines”, Pearson said in prepared testimony submitted to the committee ahead of the hearing.
Despite the regrets voiced by the three men, however, Valeant has apparently continued hiking drug prices into 2016, according to the Wells Fargo report. Valeant acquired Isuprel and Nitropress in 2015 and quickly raised their prices by 525% and 212%, respectively. The committee is investigating the dramatic price increases pushed by Valeant and several other drugmakers.
In his written testimony, Pearson sought to downplay how important or widespread the price increases were.
That job won’t fall to Mr. Pearson, who is on his way out as CEO. Those price increases, he affirmed, drove a majority of the company’s revenue growth in recent years. Nearly $100 billion has been erased from Valeant’s stock market worth.
Mr. Pearson had built the Valeant empire on two major strategies – slashing expenses and growing through acquisitions. Valeant struck a series of acquisitions through which it got its hands on some promising assets, including Bausch & Lomb.
Last February, he testified before a House of Representatives committee alongside Shkreli, the 33-year old founder of Turing Pharmaceuticals.
The committee said Tuesday it will also question Ackman, a billionaire activist investor who has been one of Valeant’s leading champions on Wall Street. Later in October, a report by a short-selling firm accused Valeant of being an Enron-like fraud due to its accounting practices. “Your failure to provide a complete response to my requests is deeply disappointing”, McCaskill wrote Valeant at the time.
At one point, Valeant was Canada’s most valuable company as measured by stock market value, with a peak closing stock price of $346.32 on the Toronto Stock Exchange set last August. He added that while his public comments have typically come in the context of discussions about shareholders’ interests, “I regret that my public focus on shareholders left the seriously inaccurate impression that Valeant did not consider the impact of our decisions on patients”. “That is absolutely not the case”, he said. The sales, being linked to Philidor, raised even more suspicion. He is expected to officially replace Pearson early next month.
On Monday, Valeant announced Joseph Papa would take over as CEO. The company is rethinking its aggressive approach to pricing, according to his remarks, in which he insists that Valeant was concerned about patients and not just making money.
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Collins said the committee’s investigation had found similar stories, where patients couldn’t access financial assistance to afford expensive drugs from Valeant. He proposed reducing the cost of Nitropress and Isuprel by 30 percent so that all hospitals could have access.
