Why a major drug company could be in huge trouble

Why a major drug company could be in huge trouble

Valeant's CEO just got hospitalized with severe pneumonia, and that may be the least of the company's troubles.

As we recently reported, drugmaker Valeant Pharmaceuticals International Inc.’s CEO, J. Michael Pearson, has been hospitalized with severe pneumonia. His own personal emergency could be almost symbolic of what his company is going through.

Valeant has been absolutely hammered lately by accusations of artificially pumping up sales, causing its stock to plunge 57 percent since August — but what exactly do people say the drugmaker has been doing, and what could be the future consequences?

Pearson, who had to be taken to the hospital with pneumonia on Christmas, has been trying to get investors back on board after everyone started jumping ship when the recent scandals broke. Basically, the concerns amount to how Valeant — a company that pulls in nearly $3 billion in revenue each year — is making its sales.

Its critics say that Valeant has been using a mail-order pharmacy to artificially boost its sales.  In October, Valeant’s stock took a beating when a report from Citron Research claimed that Valeant was using pharmacies to store drugs in its inventory and record them as sales.

And that’s not all the company has been accused of.

In September 2015, Valeant was criticized for a heavy inflation in its drug prices. When politicians lined up to criticize the pricing strategies, the stock plummeted 19 percent. Valeant raised prices by 66 percent this year, far beyond any other peer in the market and attracting the attention of Congress.

And with Valeant looking to buy more pharmaceutical companies, the concern was that the price of many other drugs currently available would go up dramatically as well. For example, after buying Salix Pharmaceuticals in 2015, it raised the price of a diabetes pill by 800 percent.


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  1. joe hall says

    There will be no accountability there never has been and there never will be with our rotten drug industry who remains above all laws.

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