Lawmakers grill pharmaceutical executives, saying they gouge patients.
WASHINGTON — Lawmakers accused Valeant Pharmaceuticals of gouging patients to reward Wall Street investors during a hearing Wednesday scrutinizing the embattled drugmaker’s pricing tactics.
The blistering criticisms from Senate Republicans and Democrats came as Valeant’s outgoing CEO expressed regrets for the most egregious price increases and a billionaire hedge fund investor defended the company’s business model.
Throughout the hearing, members of the Senate Committee on Aging laid into the Canadian drugmaker’s strategy of acquiring companies, slashing spending and jacking up prices.
“Valeant’s monopoly model operates at the expense of real people,” said Sen. Susan Collins, R-Maine, in her opening statement.
Berna Heyman, a patient with a rare genetic disorder called Wilson’s Disease, testified that the co-pay on her medication increased from $700 per year to more than $10,000. The 30-year-old drug, Syprine, was acquired by Valeant in 2010 and has seen its price increase more than 3,000 percent. After her story appeared in the press Valeant offered free medication and tried to deliver flowers.
“I refused the flowers,” Heyman said.
Sen. Claire McCaskill, D-Missouri, said executives with ties to Wall Street have driven the adoption of Valeant’s price-hiking tactics, including former hedge fund manager Martin Shkreli, who has become the poster-child for the issue.
“It’s using patients as hostages, it’s immoral,” McCaskill said.
The committee issued subpoenas to compel the appearance of Valeant’s outgoing CEO, J. Michael Pearson, and its former chief financial officer, Howard Schiller.
Lawmakers saved some of their harshest words for hedge fund manager William Ackman, who attempted to explain why Valeant’s “low-cost and disciplined” business model made it a smart investment.
Ackman, whose fund Pershing Square Capital controls $12 billion, said Valeant can do “more for innovation in pharma by acquiring other drug companies” than by developing its own drugs.
With only days remaining in his tenure as CEO, Pearson expressed regrets for the company’s largest price hikes.
“Valeant was too aggressive and I, as its leader, was too aggressive,” Pearson told lawmakers. “I regret pursuing transactions where a central premise was a planned increase