The CEO of a pharmaceutical company that drew heavy fire from Congress for jacking up drug prices is out.
Valeant Pharmaceuticals announced Monday that it will start searching for a new CEO to replace J. Michael Pearson. Valeant didn’t say whether Pearson resigned or was fired, but the move comes a few days after the company’s stock plunged.
Part of the reason for the drastic tumble was news from Valeant that it will delay filing its annual report and make changes to its 2016 financial outlook. Valeant’s stock is trading at nearly $30 a share, down from $53 last week.
The company was brought before various House and Senate panels to discuss raising the price 500 percent of older generic heart drugs Isupurel and Nitropress. The practice of buying an older generic drug that has no competition and then raising the price has garnered congressional attention from both parties.
However, Congress wasn’t the only problem facing Valeant.
The Securities and Exchange Commission is investigating Valeant’s ties to a specialty pharmacy called Phildor.
Rep. Elijah Cummings, D-Md., asked Valeant last year for documents on the relationship, citing media reports that Valeant helped run some of its operations, including billing practices to get better reimbursement from insurance companies.
Valeant has since cut its ties with the pharmacy.
The reason why the delay of the annual report caused such a stir on the market is because a company has to file such a report or it can trigger a default of certain loans and bonds, Valeant said last week.
“This is a matter we are taking very seriously,” according to a statement from Pearson, who will remain on as CEO until his successor is chosen.
Pearson left the company in January due to health reasons but recently returned.
Interim CEO Howard Schiller went to the House in February to address the pricing practices.
Valeant did not immediately return a request for comment.
