Valeant’s stock price is getting hammered after Democrats on the House Oversight and Government Reform Committee sent a letter to the committee’s chairman, Jason Chaffetz (R-UT), asking him to subpoena the pharmaceutical company for documents related to price increases of acquired drugs.
“Valeant is using precisely the same business model as Martin Shkreli, the 32-year-old former hedge fund manager whose company recently purchased the life-saving drug Daraprim and increased the price from $US13.50 to $US750 per pill ‘overnight,'” the letter said.
The letter criticises Valeant for purchasing the rights to two drugs in February and increasing the prices.
“Similarly, in February, Valeant purchased the rights to sell Nitropress, which is used to treat congestive heart failure and hypertensive episodes, and Isuprel, which is ued to treat heart block and abnormal heart rhythm. The same day, Valeant increased the prices of these drugs to $US805.61 and $US1,346.62, respectively (increases of 212% and 525%,” the letter continued.
The Democrats on the committee have also asked chairman Chaffetz to invite Valeant CEO Mike Pearson to a hearing next week with Shkreli.
Valeant finished trading $US166.50, down 16.5%. The stock had fallen as much as 20%. Biotech stocks across the board were lower on Monday.
Here’s the letter:
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