By Sarah N. Lynch
WASHINGTON, April 26 (Reuters) - Democrats on a powerful
U.S. congressional panel are questioning whether Canada-based
Valeant Pharmaceuticals (NYSE:VRX) VRX.TO may be wrongfully withholding
documents in connection with its ongoing probe into
sky-rocketing drug prices, according to an internal memo seen by
Reuters on Tuesday.
The memo, which was sent to Democratic members of the House
of Representatives Committee on Oversight and Government Reform
from the staff of its top Democrat Elijah Cummings, reveals that
Valeant previously withheld readily available analyst reports
prepared by banks such as Goldman Sachs (NYSE:GS) GS.N , saying they were
protected by attorney-client privilege.
The memo says it also raises questions about other documents
that are still being withheld, saying some of these "were not
drafted by attorneys and do not include communications with
attorneys."
A spokesperson for Valeant did not immediately respond to a
request for comment.
The April 26 memo comes just one day before three of
Valeant's top executives are slated to appear before a different
U.S. Senate panel that is also investigating high drug prices.
The company's outgoing CEO Michael Pearson (LON:PSON) will be
testifying before the Senate Special Committee on Aging late
Wednesday afternoon, along with activist investor William
Ackman, a majority shareholder and board member, and Howard
Schiller, a director and former chief financial officer.
Their appearance before Congress comes at an awkward and
difficult time for the company, which is under fire from its
shareholders and facing a number of ongoing government
investigations into drug pricing and distribution, accounting
and disclosures, and antitrust matters.
Last month, the company announced that Pearson would be
stepping down and that Ackman would be joining its board, after
a board committee probe into the company's dealings with
specialty pharmacy Philidor RX Services uncovered accounting
problems dating back to December 2014.
The company said it would restate its earnings and delay
filing its annual report, opening the door to a possible default
on its $30 billion debt.
The company has blamed some of the accounting problems on
Schiller, and asked him to step down from his board seat.
Schiller has refused to do so, and has denied any wrongdoing
through his attorney.
Valeant plans to file its annual report on April 29, two
days after the hearing.
Wednesday's hearing will be primarily focused on Valeant's
drastic price increases for two of its heart drugs.
The committee previously planned to vote to hold Pearson in
contempt for failing to be deposed, but backed down after he
agreed to be interviewed April 18.
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Valeant names Papa CEO after he resigns from Perrigo
Valeant CEO agrees to be deposed by Senate committee
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