Valeant CEO Agrees to Senate Deposition
Michael Pearson, the controversial CEO of Valeant Pharmaceuticals has bowed to pressure and agreed to be deposed by the US Senate’s Special Committee on Aging, which is investigating the causes of soaring prescription drug prices. Valeant is one of a number of companies targeted in a drug price probe by the special committee, for which a Senate hearing is scheduled for Apr.27. The list includes Turing Pharmaceuticals, whose former CEO, Martin Shkreli, has also had run-ins with the US Congress.
Earlier, Pearson’s attorney had said he and his client had “serious concerns about the basic fairness of a sworn deposition at this stage.”However, the committee threatened to open contempt charges against the executive if he did not comply. Meanwhile, media reports say the US-managed drug firm headquartered in Canada has received a notice of default from holders of its 5.5% notes due for repayment in 2023, citing its failure to file a financial report due in March.
Valeant blames the delay on a review of its accounting practices, which found that it prematurely reported $58 million in sales in 2014 to its former partner, mail-order pharmacy Philidor, with which the company is accused of conspiring to falsify sales and drive selling prices. In November 2015, the company said it would sever ties with Philidor. It is now engaged in revising earlier financial statements related to the pharmacy.
To resolve the default, Valeant must file its 2015 financial report by June 11. If it fails to do so on time, analysts say it will be in default, and bond holders could demand accelerated repayments. The company reportedly plans to complete the filing by Apr. 29.