WASHINGTON — The outgoing CEO of Valeant Pharmaceuticals, ensnared in controversy over its business model, will tell a Senate committee Wednesday that the company was “too aggressive” in raising drug prices.
Michael Pearson said in prepared testimony to the Senate Special Committee on Aging that “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.”
“The company was too aggressive — and I, as its leader, was too aggressive — in pursuing price increases on certain drugs,” he said in the statement.
Pearson, who was threatened with contempt by the committee earlier this month for his initial refusal to be deposed in its investigation of Valeant, will be part of the star panel at Wednesday afternoon’s hearing. He will be seated alongside Valeant investor Bill Ackman, the man believed to have helped orchestrate Pearson’s pending departure from the company, and former interim CEO and chief financial officer Howard Schiller, who has been accused by Valeant of “improper conduct.”
With that backdrop, aides on Capitol Hill told STAT that they are expecting some fireworks when lawmakers grill the three on the company’s controversial business plan, which has come under fire from Democratic presidential candidate Hillary Clinton on the campaign trail and prompted multiple federal investigations.
The company’s price increases were motivated by the imminent release of generic competitors, Pearson said in his remarks, but “in retrospect, we relied too heavily on the industry practice of increasing the price of brand name drugs in the months before generic entry.”
Along with his contrition, however, Pearson said that the price increases “in a small segment of our company have overshadowed our activities, and I recognize that we therefore need to work to regain the confidence of Congress, the public, doctors, and patients.”
He listed various patient assistance programs and research and development efforts that Valeant has initiated. But, he said, “we have also made mistakes.”
The public scrutiny of the price increases “has given Congress and the public a misimpression that our strategic focus revolved around acquiring older, off-patent drugs, which in fact was not the case,” he said.
He blamed that in part on the fact that many of his public statements have come when he was addressing the company’s shareholders.
“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. We absolutely did, and we still do,” he said. “In that regard, Valeant is intently focused on rethinking our approach to drug pricing going forward.”