Congress just got a bunch of documents Valeant was withholding

It’s been a trying day for Valeant Pharmaceuticals.

First the US Senate released the names of everyone who will be answering for the company at a hearing on Wednesday, including CEO Michael Pearson, former interim CEO, Howard Schiller, and board member and hedge fund billionaire Bill Ackman.

Now the US House of Representatives is getting a word in. The Committee on Oversight and Government Reform, which is also investigating the company, just put out a release about a bunch of documents that it just received from Valeant.

Earlier this month Ranking Member Elijah Cummings (D-MD) accused the company
of a “pattern of obstruction” after it failed to deliver a number of documents he requested regarding its controversial relationship with its defunct in house pharmacy, Philidor.

Valeant was forced to shutter Philidor in January after the revelation of its existence in October, combined with government scrutiny and accusations of malfeasance from a short seller, sent its stock careening down almost 70%.

Now the House has some (though not all) of the documents Valeant left out, and frankly, it’s unclear why the company left them out in the first place. The company had claimed the documents contained attorney client privilege, but as a journalist, I probably have some of them in my inbox.

Wall Street research reports describing Valeant’s business model certainly do not qualify as privileged, but they made up the bulk of what Congress just got.

Here’s a sampling:

  • There’s a report from TD Securities saying that the government foots the bill for 15% of Valeant’s revenue.
  • Reports from BMO Capital Markets and Canaccord Genuity describing Valeant’s practice of buying drugs and jacking up their prices by sometimes triple digit percents, and how common that is in the drug industry.
  • A report from Barclays describing how Valeant’s patient assistance programs actually make drug costs higher.

The House release said that Valeant continues to withhold communications between its executives, including its Legal Counsel. It also said that there continues to be a bipartisan effort to get Valeant to produce those documents.

The company’s executives appear before the US Senate on Wednesday at 3:30 pm.

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