Pershing Square's Bill Ackman and Valeant Pharmaceuticals International's Michael Pearson Interview
J. Michael Pearson, former CEO of Valeant Pharmaceuticals.  Photograph by Scott Eells—Bloomberg via Getty Images

Valeant’s CEO Will Have to Testify at a U.S. Congressional Hearing

Mar 28, 2016

The CEO of Valeant Pharmaceuticals (vrx), which is under scrutiny for dramatically hiking the price of older drugs, has been summoned to testify at a U.S. congressional hearing on April 27, the panel said on Monday.

The Senate Special Committee on Aging hearing comes as the Canadian-based company is coping with a variety of federal investigations into its accounting practices that led to a restatement and delays in the filing of its annual report.

Valeant said last week CEO Michael Pearson would step down, after a board committee probing the company's ties to specialty pharmacy Philidor Rx Services had found accounting problems dating back to December 2014. Billionaire William Ackman, whose Pershing Square Capital Management owns a 9% stake in Valeant, has joined the company's board.

A spokesperson for Valeant did not immediately respond to an email seeking comment.

U.S. prosecutors in Massachusetts and Manhattan are probing Valeant's pricing and distribution channels, while the Securities and Exchange Commission is investigating its accounting and disclosure issues.

The Senate committee is one of two congressional bodies that are looking into aggressive prescription drug pricing.

Both committees are particularly focused on Valeant and Turing Pharmaceuticals, a private company founded by Martin Shkreli, a 32-year-old entrepreneur who has come under fire for raising the price of the drug Daraprim by more than 5,000% to $750 a pill.

In February, the U.S. House Committee on Oversight and Government Reform held a long and contentious hearing on drug pricing.

At that hearing, Shkreli, who is facing unrelated securities fraud charges, asserted his Fifth Amendment right against self-incrimination.

Pearson did not testify at the hearing in the U.S. House of Representatives because he was on medical leave. Howard Schiller, Valeant's then-interim CEO and former chief financial officer, testified in Pearson's place.

Since then, however, Valeant has publicly accused Schiller and the company's corporate controller with "improper conduct" which helped contribute to a misstatement of its financial results.

Schiller, through his attorneys, has denied any wrongdoing.

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