The Canadian drug maker, Valeant Pharmaceuticals International Inc., has increased the prices of two drugs by several hundred percent and Democratic lawmakers in Congress want to know why. The request for information has caused a rout in the stock prices for the company and added to uneasiness over excessive drug prices in general. The drug industry is worrying that there will be a clampdown on drug prices by government agencies such as Medicare and Medicaid and by private insurers.
Eighteen Democratic members of the House Committee on Oversight and Government Reform have asked the committee chairman Jason Chaffetz (R-Utah) to subpoena Valeant. They want to see information relating to price increases two drugs used for heart disease, Isuprel and Nitropress. Isuprel's price went up 212% and Nutrioress's price soared 525% after Valeant bought the drugs in February.
After this news came out, shares of Valeant fell more than 15%. But the stock prices for many pharmaceutical companies have slumped in recent days, especially after Democratic candidate Hillary Clinton blasted the large price increases seen for some drug.
The members of the committee also urged Chaffetz to invite the chief executive officer of Valeant, Michael Pearson, to testify at a hearing, which was scheduled to hear testimony from Martin Shkreli, the chief executive officer of Turing Pharmaceuticals. Shkreli and Turing, which is privately held, were publicly excoriated for a more than 5,000% increase in the price of a drug treatment for a toxoplasmosis, a parasitic infection.
Pearson has built Valeant into one of the world's largest pharmaceutical firms by acquiring older drugs and then raising prices. The company has curtailed costs for research and development.
Hillary Clinton has put forward a healthcare plan that includes a $250 monthly cap on the amount an individual would pay out of pocket for prescription drugs. Her plan would also allow Medicare to negotiate drug prices and permit Americans to buy drugs at lower prices from other countries.