Pharmaceuticals Executives Face Harsh Words During Senate Hearing on Drug Prices

— -- The CEO of a pharmaceutical company testified today that officials there were "too aggressive" in raising the price of medications as company officials faced harsh words during a senate hearing today.

J. Michael Pearson of Valeant Pharmaceuticals testified today in front of the U.S. Senate Special Committee on Aging in Washington, D.C. on the significant price increase in multiple drugs at the company.

The company has come under fire for significantly raising prices on at least four drugs for cardiac arrest and a rare genetic disease that they recently acquired. Health care officials and one patient also spoke at the hearing about the burdens these price increases have had on patients and hospitals.

The senators leading the committee had harsh words for Pearson along with Valeant board member William Ackman and former Chief Financial Officer Howard Schiller.

Senator Susan Collins, the chairman of the committee, called the price hikes “unwarranted.”

“They have made life saving medications inaccessible for some patients who desperately need them,” she said in her opening statements.

Senator Claire McCaskill, the ranking member for the committee, said she remained “skeptical” that the company would “turn over a new leaf” regarding drug pricing.

“It’s using patients as hostages, it’s immoral, it makes Americans very, very angry,” said McCaskill. The committee announced in the fall that it is was investigating Valeant after the company raised prices significantly on three drugs they had recently purchased from another company.

Valeant raised the prices of two drugs to treat cardiac arrest and one to treat a rare genetic condition by hundreds or even thousands of a percent. The drugs for cardiac arrest -- Isuprel and Nitropress -- went up by 312 percent and 820 percent, respectively.

A third drug used to treat a rare genetic disorder called Wilson's disease rose in price by 2,849 percent from $888 for 100 capsules to $26,189, according to a letter sent to Valeant Pharmaceuticals by the Senate committee chairman and ranking member.

Pearson described the price increases as "mistakes.”

"The company was too aggressive – and I, as its leader, was too aggressive – in pursuing price increases on certain drugs," Pearson noted in written testimony today. "Let me state plainly that it was a mistake to pursue, and in hindsight I regret pursuing, transactions where a central premise was a planned increase in the prices of the medicines, such as our acquisition of Nitropress and Isuprel from Marathon Pharmaceuticals.”

Pearson remains the CEO for only a few more days before a new CEO will start at the company on Monday.McCaskill said the influence from Wall Street investors helped influence the company to hike prices up for these drugs.

“The investors are playing an outside role in these companies,” McCaskill said in her opening remarks.

McCaskill asked Pearson, Schiller and Ackermann if they would consider lowering the price going forward.

Ackermann,also a CEO for Pershing Square Capital Management that invested in Valeant, said he would recommend a 30 percent discount on Nitropress for hospitals and bring up pricing issues at a board meeting on Monday.

Although Pearson brought up programs aimed at getting patients access to the drugs, including a patient assistance program and rebate program for Nitropress, witnesses at a previous panel including a patient with Wilson’s disease and other hospital officials disputed their effectiveness.