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Valeant’s CEO Just Avoided Contempt Charges From the U.S. Senate

Pershing Square's Bill Ackman and Valeant Pharmaceuticals International's Michael Pearson InterviewPershing Square's Bill Ackman and Valeant Pharmaceuticals International's Michael Pearson Interview
Valeant CEO Michael PearsonPhotograph by Bloomberg via Getty Images

Valeant Pharmaceuticals International’s outgoing CEO, Michael Pearson, consented to be deposed by a U.S. Senate committee later this month, after the panel threatened to hold him in contempt for failing to comply with a subpoena.

The Senate Special Committee on Aging said on Wednesday that Pearson will be deposed on April 18 ahead of an April 27 hearing that is part of its ongoing investigation into the rising prices of off-patent drugs, including two of Valeant’s (VRX) heart medications.

The deposition and hearing are coming at a critical time for the company, which is facing an onslaught of federal investigations into a wide variety of issues, from drug pricing and antitrust matters to its accounting and disclosures.

The panel had been slated later on Wednesday to vote on whether to initiate contempt proceedings against Pearson, after he failed to show up last week for a deposition.

The committee said it postponed the meeting after Pearson agreed to be interviewed under oath.

“We look forward to hearing Mr. Pearson’s testimony,” said the panel’s chairman, Susan Collins, and its ranking Democrat, Claire McCaskill, in a joint 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—and we’re committed to being thorough in that pursuit.”

Pearson’s attorney, Bruce Yannett of Debevoise & Plimpton, had previously asked the committee not to require Pearson to be deposed before the hearing, saying he was tied up handling the company’s financial problems and did not have adequate time to prepare.


“Following discussions between the committee’s staff and his lawyers, Mr. Pearson looks forward to testifying at the hearing,” said Tom Orewyler, a spokesman for Debevoise & Plimpton.

The company had to delay the filing of its annual report, and it has also been on the verge of defaulting on its $30 billion of debt.

Last month, the company said Pearson would be departing as CEO and that billionaire investor William Ackman would join the board as it tries to clean up its accounting problems, which the company says were caused by “improper conduct” by certain top executives.