US House Panel To Hold Drug-Price Hearing In 2016

By Sarah N. Lynch

WASHINGTON (Reuters) -- A U.S. House of Representatives investigative panel said it plans to hold a 2016 hearing on skyrocketing drug costs, a move that comes at a time when Valeant Pharmaceuticals International is facing increased scrutiny into its pricing practices.

A spokeswoman for the U.S. House Committee on Oversight & Government Reform said on Monday the panel is conducting a thorough investigation into drug pricing and has reached out to drug companies to gather information.

Earlier this month, the U.S. Senate Special Committee on Aging launched a new probe into drug pricing at Valeant and Turing, signaling growing bipartisan agreement on the need to review the rising cost of prescription drugs in the United States.

Democratic members have pressed House Oversight Chairman Jason Chaffetz, a Republican, for months to invite Valeant Chief Executive J. Michael Pearson to testify at a hearing over his company's massive price increases of two heart medicines.

The top Democrat on the investigative panel, Elijah Cummings, had previously urged the panel to subpoena Valeant. On Monday, Cummings also sent a letter to Pearson requesting interviews with a handful of Valeant executives who were directly involved in the operations of specialty pharmacy Philidor Rx Services.

According to a letter seen by Reuters, Cummings asked Pearson to make employees Gary Tanner, Bijal Patel and Alison Pritchett available for "transcribed" interviews.

"Troubling new allegations suggest that a group of Valeant employees helped launch Philidor's business in 2013 and have remained involved in its daily operations," Cummings wrote.

"These allegations suggest that Valeant employees may have been personally involved in questionable billing practices that led Valeant to cut ties with Philidor last month."

Valeant is reviewing the letter and will respond, Valeant spokeswoman Laurie Little said in an e-mailed statement.

"As we have said previously, Valeant's board of directors has formed an ad hoc committee to review allegations related to the company’s business relationship with Philidor and related matters."

Cummings' letter came just a few days after Reuters reported about how several top Valeant employees worked closely with the founders of Philidor to set up the business and expand its operations.

Two Valeant employees, for instance, were copied on a November 2014 email which contained an attachment explaining how Philidor employees could bill the highest amount an insurance company was willing to pay by resubmitting rejected claims at different price points.

The email, reviewed by Reuters, was sent to Tanner and Patel, who both used pseudonyms for their communications within Philidor. Reuters also reported that Pritchett was involved in building relationships with specialty pharmacies.

Valeant first disclosed its ties to Philidor late last month, amid concerns over the pharmacy's tactics to get insurers to pay for Valeant medications. It has since severed ties with the pharmacy, saying it has "lost confidence" in Philidor after questions about its business practices.

Committee spokeswoman MJ Henshaw said the panel is still in fact-finding mode and "at this point we don't feel that a subpoena is a necessary step that needs to be taken."

Valeant is also facing investigations by prosecutors in New York and Massachusetts over its drug pricing and programs that provide financial assistance to help patients cover out-of-pocket expenses for their medications.

(Reporting by Sarah N. Lynch, additional reporting by Caroline Humer and Bill Berkrot in New York; editing by Nick Zieminski, Alan Crosby and Richard Chang)