Valeant
hires attorney, crisis management firm as U.S. scrutiny
mounts
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[December 14, 2015]
By Sarah N. Lynch and David Ingram
WASHINGTON/NEW YORK (Reuters) - U.S.
pharmaceuticals firm Valeant, under mounting pressure from Congress and
prosecutors over its drug pricing, has hired an attorney in Washington,
DC and crisis public relations experts with political connections,
according to sources familiar with the matter.
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The move, confirmed by sources and through documents viewed by
Reuters, signals a shift for Valeant Pharmaceuticals, which does not
maintain a large presence on Capitol Hill.
In recent months the company has attracted scrutiny over steep price
hikes on some of its drugs, potentially anti-competitive behavior in
its contact lens business and close ties to a specialty pharmacy
with aggressive billing practices.
Valeant shares have lost nearly 75 percent of their value following
the disclosures. Billionaire Bill Ackman, one of Valeant’s largest
shareholders, has said the company made a "meaningful mistake" of
underinvesting in public relations as it dealt with questions about
its business practices.
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Valeant recently retained attorney Robert Kelner, a partner at the
law firm Covington & Burling, to help respond to congressional
inquiries, including an investigation led by an oversight committee
in the U.S. House of Representatives, according to a November 20
letter seen by Reuters that was sent to Democratic Congressman
Elijah Cummings of Maryland. Covington’s attorney roster includes
former Attorney General Eric Holder, and it has represented major
drugmakers such as Johnson & Johnson and Pfizer.
Valeant has separately tapped Vianovo, a boutique crisis public
affairs firm run by former political campaign and government aides
that specializes in "high-stakes brand, policy and crisis issues"
and counts Wal-Mart and IBM among its clientele, according to a
person familiar with the matter.
Vianovo has also lobbied on behalf of companies including Apache
Corp, as well as health care networks such as Adventist Healthcare,
according to government records.
Valeant’s lobbying efforts are far more modest than that of industry
peers, and the company has spent less than $250,000 for the first
half of 2015, according to reports filed by its lobbyists.
Pharmaceutical giant Pfizer, by contrast, spent $4.9 million during
the first half of 2015.
The Senate Special Committee on Aging last week kicked off the first
of a series of hearings to investigate rising costs in off-patent
drugs, with a focus on two heart drugs manufactured by Valeant.
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Valeant was asked to provide documentation to the panel by December
2.
The panel's Republican Chairwoman, Susan Collins of Maine, told
reporters on Wednesday she plans to ask Valeant Chief Executive
Michael Pearson to testify at a future hearing. The House Oversight
Committee is also investigating drug pricing and plans to hold a
hearing sometime in the new year.
"Valeant uses a variety of firms for legal and public relations
work. Covington recently was retained to assist the company in
responding to congressional inquiries," Laurie Little, the senior
vice president of investor relations, said in a statement.
According to a July 2015 survey sponsored by the Public Affairs
Council, 64 percent of Americans say a company's honesty and
responsiveness in dealing with a crisis is the most important factor
when deciding whether to buy from that company in the future.
The survey also found that the pharmaceutical industry was deemed
the least trustworthy sector.
(Reporting by Sarah N. Lynch in Washington and David Ingram in New
York; additional reporting by Greg Roumeliotis; editing by Clelia
Oziel)
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