Senate lawmakers investigating price increases by embattled drugmaker Valeant Pharmaceuticals International Inc. also will question one of the company’s leading investors, hedge fund manager Bill Ackman.

The Senate Aging Committee is to hold its third meeting on drug prices Wednesday, responding to escalating costs that have squeezed patients and strained healthcare budgets across the country.

The committee previously announced that it would question outgoing Valeant Chief Executive Michael Pearson, who pioneered the company’s business model of buying cheap drugs and raising prices.

The committee said Tuesday it also will question Ackman, a billionaire activist investor who has been one of Valeant’s leading champions on Wall Street. Ackman’s Pershing Square Capital fund holds a 9% stake in Valeant and two chairs on the company’s board of directors. In recent months, Ackman has criticized the company’s handling of multiple issues that have pummeled its shares amid mounting controversy.


Also scheduled to appear is Robert Schiller, Valeant’s former chief financial officer and current board member. Committee staffers said they issued subpoenas to compel Schiller and Pearson to appear.

Valeant’s stock soared for several years under Pearson’s growth-through-acquisition strategy, which focused on buying older, niche drugs and repeatedly raising prices. Pearson’s approach — which shunned the costly research and development investments of traditional drugmakers — made Valeant a favorite of Wall Street investors, including Ackman.

But the company’s tactics eventually attracted scrutiny. In recent months, Valeant has been swamped by a host of problems, including three ongoing federal investigations of its accounting and pricing practices, massive debt and shareholder lawsuits in the U.S. and Canada.

The company, based in Laval, Canada, has repeatedly delayed filing its fourth-quarter and full-year 2015 results because of misstated sales from a now-defunct specialty pharmacy. Those delays put Valeant in danger of defaulting on agreements with its creditors and bondholders.


On Monday, the company further distanced itself from Pearson by announcing that Perrigo Co. CEO Joseph Papa would become its new CEO. He is expected to replace Pearson officially early next month.

The intense scrutiny of Valeant’s business since last summer triggered repeated sell-offs of its shares, which have lost nearly 90% of their value since their peak last August.

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