- The Washington Times - Wednesday, April 27, 2016

The departing CEO of Valeant Pharmaceuticals told Congress Wednesday his company was too “aggressive” in pursuing drastic price hikes for products it acquired from other drug makers, though his mea culpa did little to assuage lawmakers who said he put Wall Street’s expectations over seriously ill patients.

J. Michael Pearson said the company is not increasing its prices this year and hopes to make up for it through its discount program for hospitals.

“In hindsight I regret pursuing transactions where the central premise was based on an increase in price,” Mr. Pearson, who is leaving the Canadian company soon, testified to the Senate Special Committee on Aging.

William A. Ackman, a key company investor, said he will ask Valeant’s board of directors to consider a 30 percent cut in the price of Isuprel and Nitropress, a pair of heart drugs the company acquired in February 2015. It swiftly increased their list prices by 525 percent and 212 percent, respectively.

Senators hauled the executives and Howard Schiller, Valeant’s former chief financial officer, before their panel as part of an investigation into drug makers who’ve padded their profits by bypassing the costly research-and-development process and then asking patients and federal insurance programs to pay more.

They’ve characterized it as a price-gouging scheme that caters to investors, while burdening the patients who rely on their drugs to survive.

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“Valeant’s monopoly model operates at the expense of real people,” Committee Chairman Susan Collins, Maine Republican, said.

The committee heard from Berna Heyman, who suffers from a rare disorder called Wilson’s disease and said her co-pays skyrocketed after Valeant hiked the price of Syprine, a drug she needed.

She testified she was deemed ineligible for the company’s patient-assistance program, though Valeant reached out after she spoke to the press to make sure she got it for free.

Lawmakers also said they couldn’t find any hospitals that were benefitting from Valeant’s discount program, and they chastised the company for jacking up the price of nearly all of the drugs it acquired.

“This is the business model,” Sen. Claire McCaskill, Missouri Democrat, said.

Mr. Ackman said Valeant made a lot of good drugs at fair prices, but that drastic price hikes on a small share of its products have damaged its reputation.

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“It’s not a big segment of our business, but it’s still our business,” echoed Mr. Pearson.

Sen. Elizabeth Warren, Massachusetts Democrat, said insurers are passing along the new costs in the form of higher premiums.

She also tried, and failed, to get an estimate of how much profit the company makes after it subtracts the cost of its patient-assistance program, saying they must have crunched the numbers.

“You’re not in this business to lose money,” she said.

Americans will spend more than $328 billion on prescription drugs in this year alone, with $50 billion of it coming out of their pockets, while $110 billion will be borne by federal taxpayers through programs such as Medicare, Medicaid and veterans’ insurance, according to the committee.

Lawmakers say “pharma bro” Martin Shkreli exacerbated the problem during his time in charge of Turing Pharmaceuticals and Retrophin. Both companies have replaced Mr. Shkreli with new leaders.

House investigators chastised Mr. Shkreli for refusing to testify at an oversight hearing in February.

Mr. Shrkeli, who’s been indicted on unrelated securities fraud charges, invoked his Fifth Amendment right to silence in a hearing that veered from drug company memos to pricey hip-hop records.

The issue has reverberated on the presidential campaign trail, especially on the Democratic side.

Sen. Bernie Sanders, Vermont independent chasing front-runner Hillary Clinton in the Democratic presidential primaries, says Medicare should be required to negotiate with drug companies for better prices. He also says individuals, pharmacists and wholesalers should be allowed to import prescription drugs from licensed pharmacies in Canada.

Mrs. Clinton’s campaign has pledged to “crack down on rising prescription drug prices and hold drug companies accountable so they get ahead by investing in research, not jacking up costs.”

• Tom Howell Jr. can be reached at thowell@washingtontimes.com.

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