Business

Valeant CEO Michael Pearson to be deposed in U.S. Senate drug probe

The chief executive officer of Valeant Pharmaceutical is now slated to be deposed Monday by U.S. politicians looking into big hikes in drug prices.
J. Michael Pearson, Chairman of the board and Chief Executive Officer of Valeant Pharmaceuticals International Inc., gestures during their annual general meeting in Laval, Quebec May 20, 2014. Canada's Valeant Pharmaceuticals International Inc said it will not make an all-cash bid for drugmaker Allergan Inc as many had expected last week when the company said it would improve its cash and stock offer for the Botox maker. REUTERS/Christinne Muschi (CANADA - Tags: BUSINESS HEALTH) - RTR3Q0X9 (Christinne Muschi/Reuters)

The chief executive officer of Valeant Pharmaceuticals is now slated to be deposed Monday by U.S. politicians looking into big hikes in drug prices.

Michael Pearson didn't comply with a subpoena to give a deposition on AS, prompting Valeant to issue a statement earlier this week saying it had asked him to co-operate with members of the U.S. Senate's special committee on aging.

"We look forward to hearing Mr. Pearson's testimony," the committee's chair, Senator Susan Collins, and ranking member Senator Claire McCaskill said in a statement. "This deposition and investigation are about better understanding the dramatic price increases we're seeing for decades-old prescription drugs and how those prices are affecting consumers."

After Pearson missed last week's deposition, Collins and McCaskill said they intended to begin contempt proceedings against him.

Collins and McCaskill's statement Wednesday said Pearson is also under subpoena to appear before the committee at a hearing scheduled for April 27.

The announcement came a day after Valeant said it had received a default notice from a debt holder, which was identified by the Wall Street Journal as Centerbridge Partners LP. The bondholder filed the default notice because Valeant is late filing its annual report.

Under the terms of the debt, the company has until June 11 to file the report. The Laval, Que., company said it is on schedule to file it by April 29 with Canadian and U.S. securities regulators.

Citi Research analysts said bondholders could force accelerated repayments if Valeant doesn't file the report by June 11, and  Moody's Investors Service cut its rating on the company's speculative grade liquidity rating by one notch and put its other ratings under review for a downgrade.

Once a stock market high flyer, Valeant is now grappling with about $30 billion in debt, and faces three federal probes into its accounting and business practices.

With files from The Associated Press

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