Valeant receives subpoenas from Feds over pricing practices

Bernie Sanders' plan for prescription drug prices
Bernie Sanders' plan for prescription drug prices

Federal investigators are probing the way that Valeant Pharmaceuticals prices and distributes its drugs.

Valeant said Wednesday that it recently received subpoenas from the U.S. Attorney's Offices in Massachusetts and the Southern District of New York.

Prosecutors requested information on financial support the company provided patients, distribution of the company's products and pricing information given to the Centers for Medicare and Medicaid Services, the company said.

Valeant (VRX) has come under scrutiny in recent months following questions over its pricing of drugs called Nitropress and Isuprel.

J. Michael Pearson, Valeant's CEO, said he believes Valeant has complied with all laws.

"We remain committed to assisting eligible patients who need our products, and we will be working with the appropriate groups to submit the requested documents and plan to cooperate with the inquiries," Pearson said in a statement.

The news spooked investors, sending Valeant shares tumbling 9% Wednesday morning.

Related: 'Hated' CEO lowering price of $750 AIDS drug Daraprim

Valeant's website indicates it has several patient assistance programs that would help people qualify for cost-free products. A spokesperson for the company said Valeant spent $554,000,000 on patient assistance programs in 2014, and expects to pay $630,000,000 in 2015.

The pharmaceutical industry has been in the spotlight recently after drugmaker Turing increased the price of a medicine called Daraprim from $13.50 to $750 a pill. The company's CEO, Martin Shkreli, quickly became the focus of public anger.

Hillary Clinton even tweeted about it, saying "price gouging like this in the specialty drug market is outrageous."

Federal prosecutors could not be reached for comment.

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