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Valeant Comes Under Fresh Scrutiny With New Subpoenas on Prices

Valeant Pharmaceuticals International Inc. is under fresh scrutiny -- this time with subpoenas from U.S. prosecutors seeking information on drug-pricing decisions -- just as beleaguered biotechnology investors saw signs that the costs debate may fade away.

The drugmaker recently received a subpoena from the U.S. Attorney’s Office in Massachusetts and another from the Manhattan U.S. Attorney’s Office seeking information on its patient assistance programs, drug distribution and pricing decisions, Laval, Quebec-based Valeant said in a statement on Wednesday night.

The subpoenas are likely to refocus attention on high medicine prices, cutting short any relief from Tuesday’s Democratic presidential debate, when candidates largely bypassed the issue. Biotechnology stocks, which had been in a rout since Hillary Clinton said Sept. 21 that she would seek reforms in the drug industry, had briefly rallied on Wednesday. Much of the criticism in recent weeks has focused on a few companies like Valeant and Turing Pharmaceuticals AG.

Election Year

“We will continue to see headlines around drug pricing reform, especially as this is an election year,” said Mirjam Heeb, a healthcare fund manager at GAM Investment Management in Zurich. “It’s a headwind that will keep popping up.”

Shares of Valeant yesterday rallied 6.5 percent, the biggest increase...