Washington, D.C. -Today, Rep. Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform, led all 18 Democratic Committee Members in sending a detailed letter requesting that Chairman Jason Chaffetz schedule a vote on November 17 on subpoenas to compel J. Michael Pearson, CEO of Valeant Pharmaceuticals, and Martin Shkreli, CEO of Turing Pharmaceuticals, to produce documents they have been withholding from Congress about the skyrocketing prices of their prescription drugs.
On Sept. 28, the 18 Democrats wrote a letter requesting that Chaffetz hold a hearing with Pearson and Shkreli and issue a subpoena for documents in his capacity as Chairman, but Chaffetz did not reply. Cummings first asked Chaffetz to investigate Pearson’s business practices in a letter on May 12, 2015, but Chaffetz has joined no letters to date and has held no hearings on this issue since that time.
“Your silence on this issue is troubling for several reasons," the Democrats wrote. “It creates the appearance that you do not take seriously a request from nearly half of the Members of this Committee. It also contradicts the Committee’s oversight plan, which was adopted unanimously earlier this year. But worst of all, it suggests that you believe this issue is not worth the Committee’s time."
“Of course, it is your prerogative as Chairman to set the Committee’s agenda, but even if you have no interest in investigating these abuses on behalf of your own constituents, we ask that you not block us from investigating them on behalf of ours," the Democrats wrote.
“When corporate executives like Mr. Pearson and Mr. Shkreli engage in abusive business practices to enrich themselves and their shareholders at the expense of patients, hospitals, and other healthcare providers, they should be held accountable for their actions," the Democrats wrote. “We have made clear for the past year that we want to work with you in a bipartisan manner to combat these outrageous price increases that affect all of our constituents and prevent other drug companies from following suit. That is why we do not understand how you can stand by and allow these abusive business practices to continue without conducting any investigation whatsoever."
In their letter today, the Democrats cited a proliferation of new reports over the past month about the abusive business practices of both companies.
For example, Valeant recently disclosed that it has received subpoenas from two U.S. Attorneys’ offices regarding the company’s drug pricing and distribution practices, among other issues. Following that disclosure, two directors on the board of its top investor reportedly resigned and the nation’s three largest drug benefit managers ceased doing business with a “shadow pharmacy" connected to Valeant. The manager of a pharmacy in California has now filed suit against this shadow pharmacy, alleging “massive fraud, " and Goldman has downgraded the company’s stock. In light of these developments, multiple press reports have publicly questioned whether Valeant is the “next Enron."
Similarly, Shkreli came under fire after he increased the price of Daraprim from $13.50 per tablet to $750 per tablet “overnight." Despite pledges to lower his price, it remains the same more than two months later. Shkreli has come to Pearson’s defense in the face of mounting criticism of Valeant’s business practices. On Oct. 21, he tweeted that Valeant “is not overreporting revenue" and that he took a “long " position on Valeant stock, only to reverse himself a week later. Shkreli’s company is also under investigation by the New York attorney general for possible antitrust violations as a result of its restrictive distribution practices.
Both companies have refused to provide any documents in response to requests from Democrats. On Sept. 3, Pearson’s company sent a letter arguing that “the specific documents and information referenced in your letter are highly proprietary and confidential." On Oct. 30, Shkreli’s company sent a letter arguing that “under the advice of counsel we are unable to provide certain numbers and data related to proprietary information."
