House Democrats Want to Know if Valeant Is Withholding Documents
Democrats on a powerful U.S. congressional panel are questioning whether Canada-based Valeant Pharmaceuticals (VRX) may be wrongfully withholding documents in connection with its ongoing probe into sky-rocketing drug prices, according to an internal memo seen by Reuters on Tuesday.
The memo, which was sent to Democratic members of the House of Representatives Committee on Oversight and Government Reform from the staff of its top Democrat Elijah Cummings, reveals that Valeant previously withheld readily available analyst reports prepared by banks such as Goldman Sachs (GS), saying they were protected by attorney-client privilege.
The memo says it also raises questions about other documents that are still being withheld, saying some of these “were not drafted by attorneys and do not include communications with attorneys.”
A spokeswoman for Valeant denied that the company has done anything wrong, saying it has already provided more than 78,000 pages of documents and will continue cooperating.
“We continue to discuss with the committee the issue of privileged documents, but any suggestion that we have withheld documents inappropriately is incorrect,” Laurie Little said in a statement.
The April 26 memo comes just one day before three of Valeant’s top executives are slated to appear before a different U.S. Senate panel that is also investigating high drug prices.
The company’s outgoing CEO Michael Pearson will be testifying before the Senate Special Committee on Aging late Wednesday afternoon, along with activist investor William Ackman, a majority shareholder and board member, and Howard Schiller, a director and former chief financial officer.
Their appearance before Congress comes at an awkward and difficult time for the company, which is under fire from its shareholders and facing a number of ongoing government investigations into drug pricing and distribution, accounting and disclosures, and antitrust matters.
Last month, the company announced that Pearson would be stepping down and that Ackman would be joining its board, after a board committee probe into the company’s dealings with specialty pharmacy Philidor RX Services uncovered accounting problems dating back to December 2014.
The company said it would restate its earnings and delay filing its annual report, opening the door to a possible default on its $30 billion debt.
The company has blamed some of the accounting problems on Schiller, and asked him to step down from his board seat. Schiller has refused to do so, and has denied any wrongdoing through his attorney.
Valeant plans to file its annual report on April 29, two days after the hearing.
Wednesday’s hearing will be primarily focused on Valeant’s drastic price increases for two of its heart drugs.
The committee previously planned to vote to hold Pearson in contempt for failing to be deposed, but backed down after he agreed to be interviewed April 18.