Valeant subpoenaed over drug pricing

The U.S authorities are scrutinizing the growing drug prices and the subpoenas might be a result of that issue.

Federal prosecutors could not be reached for comment. The consultant found that “there was considerable room to increase the price of both drugs”, CEO Michael Pearson said in a letter on Wednesday in response to Democratic Senator Claire McCaskill’s concerns. The drugs are administered in hospitals as part of a larger treatment protocol.

“The focus on patient access programs could be the most troublesome as price increases are allowed but providing financial assistance to patients in government programs is not allowed”, he wrote in a report.

The subpoenas by the U.S. Attorney’s offices in Massachusetts and New York’s Southern District also seek information the pharmaceutical giant submitted to the Centers for Medicare and Medicaid Services, Valeant said in a statement.

That’s due to higher prices, many people switching to high-deductible insurance plans and those in traditional plans being saddled with a higher percentage of costs.

Last month, Valeant came under fire from Democratic lawmakers after it jacked up the prices of two older heart drugs, Isuprel and Nitropress, by more than 500 percent and 200 percent. To help patients afford their drugs and get reimbursed by payers, Valeant and other companies give funding to private foundations that independently help Medicare patients.

Valeant said Wednesday that it recently received subpoenas from the U.S. Attorney’s Offices in Massachusetts and the Southern District of New York. Those are among several U.S. Attorney offices known for prosecuting drugmakers for crimes such as overcharging government health programs and marketing medicines for unapproved uses. The stock has dropped over 11% in pre-market trading following this news.

Valeant chairman and chief executive Mike Pearson said that the company believed it had operated the business in a “fully compliant manner”.

Glancy Prongay & Murray LLP (“GPM”) announces that it is investigating potential claims on behalf of investors of Valeant Pharmaceuticals global Inc.

Valeant Pharmaceuticals disclosed late Wednesday that it was subpoenaed by US prosecutors seeking information on its pricing programs.

In a July hearing, Sen. As BMO Capital Markets pointed out recently, the price of Nitropress and Isuprel will soon face generic competitors and prices will likely fall off a cliff. Unsatisfied with Schiller’s explanation that the drugs had been underpriced, McCaskill sent Valeant 22 questions about its pricing for and revenue from the drugs, costs of production, other drugs for which it has hiked prices and additional details.