UPDATE 3-Ackman, Valeant pledge reforms after spiking drug prices

(Updates with additional comments from Ackman about Valeant's
10K and steps to avert bankruptcy, details on recent drop in
share price)
By Sarah N. Lynch and Bill Berkrot
WASHINGTON/NEW YORK, April 27 (Reuters) - Activist investor
William Ackman promised U.S. lawmakers on Wednesday that he will
urge the board of Valeant Pharmaceuticals (NYSE:VRX) VRX.TO to reduce the
high prices of four life-saving drugs that are now at the heart
of two congressional probes.
Speaking before the Senate Special Committee on Aging,
Ackman revealed that Valeant's board will hold a conference call
on Thursday to discuss the costs of heart medications Isuprel
and Nitropress, as well as Cuprimine and Syprine, two drugs that
are used to treat a genetic disorder that causes copper to build
up in the body's organs.
Valeant raised the price of Isuprel by about 720 percent and
Nitropress by 310 percent, after acquiring them in 2015. The
other two were raised by 5,878 percent and 3,162 percent,
respectively.
"My recommendation is going to be to reduce the prices,"
Ackman testified.
The Senate Special Committee on Aging is one of two U.S.
congressional panels investigating sky-rocketing price increases
of certain decades-old drugs acquired by companies including
Valeant and Turing Pharmaceuticals, a company founded by Martin
Shkreli.
Ackman, a major Valeant shareholder, appeared Wednesday
alongside the company's outgoing Chief Executive Michael Pearson (LON:PSON)
and Howard Schiller, a board member and former chief financial
officer.
Ackman joined the board last month as Valeant faced mounting
scrutiny by members of Congress, prosecutors and regulators over
its drug pricing, business practices and accounting - issues
that have caused its share price to plummet almost 90 percent
since August.
Valeant has about $30 billion of debt and has been
negotiating with creditors, some of whom issued notices of
default after it missed a deadline for the filing of its
financial results.
Ackman said Wednesday that one of his top priorities is to
protect the company from bankruptcy. Later, in response to a
question from Reuters, he expressed confidence that the company
will recover.
"There is not going to be any bankruptcy of Valeant," he
said. "We were in a death spiral, and we have taken steps to
deal with the banks. We are going to file our 10K on time. We
brought in a new CEO."
Pearson, Ackman and Schiller all told lawmakers on Wednesday
they regretted Valeant's pricing decisions.
"The company was too aggressive and I, as its leader, was
too aggressive in pursuing price increases on certain drugs," he
said.
But many lawmakers on the panel appeared skeptical. They
questioned Valeant's business model of investing little in
research and development, and the company's practice of
acquiring decades-old drugs and raising the prices.
Senator Claire McCaskill, the panel's top Democrat, angrily
asked each of the panelists at one point if they could recall
one drug that Valeant didn't raise the price on.
"Not in the United States," Pearson responded, while
Schiller was only able to come up with the name of one drug
Valeant acquired after its purchase of Salix.
"That is not social good, that is social bad," McCaskill
said.
Lawmakers also questioned whether Valeant's patient
assistance and rebate programs are truly helping patients and
hospitals afford the medications.
Senator Susan Collins, the panel's chairman, said her
committee's investigation has thus far been unable to find a
single hospital that has received a discount.
"I can assure you that many of the large hospital systems
are getting discounts on the heart drugs," Pearson said.
Pearson is expected to step down in the coming weeks to make
way for the incoming CEO, Joseph Papa, previously of Perrigo
Company PRGO.N .
Wednesday's hearing also featured testimony from doctors and
a patient with Wilson's Disease who was forced to stop using
Syprine because of the price spike.
Dr. Frederick Askari of the University of Michigan told the
panel that the cost of Syprine is now so high that it has become
less expensive to get a liver transplant and a life-time supply
of anti-rejection medications.
The patient, Berna Heyman, testified that Valeant refused to
help her when she called to complain about the prices. Later,
after speaking with the media, the company changed its tune,
offered to help, and even sent flowers.
"I refused the flowers," she said.