Lawmakers blast Valeant for price-gouging tactics

Members of the Senate Committee on Aging on Wednesday accused Valeant Pharmaceuticals of gouging patients to reward Wall Street investors. Throughout a committee hearing, lawmakers hammered the drugmaker's strategy of acquiring companies, cutting spending, and increasing prices.

Members of the Senate Committee on Aging on Wednesday accused Valeant Pharmaceuticals of gouging patients to reward Wall Street investors. Throughout a committee hearing, lawmakers hammered the drugmaker's strategy of acquiring companies, cutting spending, and increasing prices. "Valeant's monopoly model operates at the expense of real people," said Sen. Susan Collins (R-ME). The committee issued subpoenas to compel the appearance of Valeant's outgoing CEO, J. Michael Pearson, and its former chief financial officer, Howard Schiller. Members also severely criticized hedge fund manager William Ackman, who attempted to explain why Valeant's "low-cost and disciplined" business model made it a smart investment. Ackman, whose fund Pershing Square Capital controls $12 billion, said Valeant can do "more for innovation in pharma by acquiring other drug companies" than by developing its own drugs, but lawmakers charged that Valeant's business model relies on large price increases.